Leveson Report: Media Plurality

Lord Stoneham of Droxford Excerpts

Wednesday 22nd May 2013 Grand Committee

[Lord Stoneham of Droxford]

My business experience in the media sector confirmed to me that free markets and competition do not reach a steady state equilibrium where competition markets ensure fair and free competition. Most owners seek more market share to give them greater dominance and control in their markets, to better control prices, set higher margins and increase profits, particularly if greater market share deters new entrants. These media markets are not in fact that big and the players are very limited.

The growth of online and other media channels is encouraging diversity, which is to be welcomed, but the bigger companies retain great power and may in time sweep up the diversity of the principal new entrants into their control. This is how they normally work. It is also a fact that not simply objective measures of fair competition need to prevail in the media sector.

My noble friend Lord Sharkey described the Ofcom definition of plurality as ensuring there is a diversity of viewpoints available and consumed across and within media enterprises and preventing any one media owner or voice having too much influence over public opinion and the political agenda. Inevitably, in making the second judgment there is bound to be an element of subjectivity, particularly determining what “too much influence” is.

One overriding conclusion from Leveson must be that one media group did have too much influence. But sadly, in my view, Leveson did not address plurality concerns as much as he should have done and there will be much less point in adopting his recommendations on standards and complaints unless we do. There is a danger that prolonged arguments over complaints regulation and standards means that plurality is being pushed into the long grass and ignored when it should be central to everything.

The one publisher who was too influential and too dominant was News International. The Sun dominated the tabloid market, and the Sunday Times and the Times together were pretty dominant in the old broadsheet market, or at least they more than challenged the Telegraph, and undermined other competitors through aggressive pricing campaigns made possible by much larger resources. The growing importance of Sky as a non-domestic satellite broadcaster—now with almost 50% more resources than the BBC—adds to its influence even though its news share is low.

A lot of issues arose from this combined market dominance of News International. It affected the way politicians dealt with the company and the grovelling it indulged in to gain a political competitive advantage. It affected the way its power could be regulated as any attempt to restrain the company could be repulsed by aggressive and effective lobbying, as we saw when issues of control arose relating to Sky and News International. It affected the industry’s plans for investigating complaints. It also affected the police, who always felt that they had to keep the company on side. Fortunately, dominance eventually bred arrogance as executives and editors whose hinterland of judgment was faulty severely damaged the reputation of News International. However, it could fight back and undermine anyone coming for it, whether politician, policeman, journalist or major competitor. It began to think that it was untouchable, and for a time it was. However, that reputation was damaged once the pack of cards was convincingly challenged.

What we need now is a new policy and definition of plurality to build on the work of Leveson: otherwise, it will all be in vain. I find it inconceivable that News International should be able to hold onto its news market share while coming again to gain total control of Sky. As the noble Lord, Lord Lipsey, said, it is incredible how near it got with another faulty proposal for independent directors. The current procedure for mergers must be retained, but it will need to be more open and transparent. We have to ask ourselves why a 25% share of revenues should not be the simple control. We will need a more explicit definition of plurality for the four-yearly Ofcom review of the sector if it is maintained, as I believe it should be.