Does public service media crowd out private news publishers? New research says it doesn't

Does public service news crowd out private publishers? The fear is intuitively understandable. If a publicly funded institution provides something at no up-front cost that seems similar to what private providers offer surrounded by advertising, or only to subscribers, why would people click, let alone pay?  

The fear is also frequently expressed by private publishers and their lobby groups, who argue that public service media (PSM) undercut independent news media and distort the marketplace by subjecting already challenged news media to unfair competition. 

So the crowding out hypothesis is intuitively understandable, and frequently expressed.  

But is it true? 

A new study from Switzerland, where some have campaigned against the public service corporation SRG SSR in recent years, suggests it is not.  

Using survey data from the Reuters Institute Digital News Report, three scientists from Universität Zürich have looked at the relationship between using public service news and using private publishers, as well as at whether using public service news impact people’s willingness to pay for news – an important issue as advertisers are increasingly moving their budgets away from newspapers and instead spend their money with Google, Facebook, and other digital platforms. 

The Swiss findings are clear. As the researchers write, “the analysis shows no evidence that SRG SSR is crowding out private media in the information sector”. Instead, public service media use tends to be complementary to use of private publishers. In fact, they find that SRG users consume more news from commercial media than non-SRG users, and, controlling for other factors like age, income, and interest, using SRG as a source of online news is not significantly related to willingness to pay for online news. 

Not just the Swiss

Are these findings unique to Switzerland? Previous research suggests they are not.  

Leaving aside various consultancy reports and studies commissioned by public service media themselves, or by private publishers critical of their role, and considering academic research in this area, the findings are consistent. 

In a study from 2017, Dr Richard Fletcher and I analysed survey data from six countries, including Germany, and found no significant negative association between using public service news and paying for online news or expressing a willingness to pay for online news. 

In 2020, Professor Annika Sehl and two colleagues published an even broader study examining national broadcast and online markets in all the 28 countries that were then part of the European Union (including the UK, where the BBC plays an important role in the media), and found no significant negative correlation between online PSM news reach and the reach of commercial news providers, or how many people pay for online news. 

A complement, not a substitute

More broadly, public service news and private publishers seem perfectly capable of co-existing, even thriving, side-by-side. The Nordic countries are home to some of the best funded and most highly and widely used public service media in the world. DR in Denmark, YLE in Finland, NRK in Norway, and SVT in Sweden all reach a much greater part of the public with news on a weekly basis (especially online) than, for example, ARD and ZDF in Germany, or SRG SSR in Switzerland. 

The Nordic countries are also home to some of the world’s most successful private publishers, and have many more people paying for online news than most of the world. 

How can this be? The crowding out hypothesis asserts a zero-sum relationship where public service is assumed to be delivered at the expense of private publishers. But academic research suggests an alternative hypothesis: that public service can serve as a form of “market conditioning”, something that does not simply meet a demand, but cultivates and shapes demand. 

In this line of thinking, public service news provides a simple appetiser that increase interest in other publishers, which often offer more in-depth reporting, more distinct editorial lines, and more clearly-voiced opinions. This, in fact, is what the Swiss study seems to suggest when the researchers there find that SRG audiences use more news from commercial media than non-SRG users. 

A first course is rarely enough to sate the appetite. 

These research findings must be a great relief for private publishers everywhere. With growing competition for both audience attention and advertising, the business of news is more challenging than it was when newspapers occupied the commanding heights of the media environment. It should be welcome news for them that public service media does not seem to represent a further threat. Given the multitude of problems they face, it is important to focus on the ones that are real. 

It may be counterintuitive and rarely stated that public service media and private publishers can thrive side-by-side, but that is what academic research suggests. This might be surprising, and not what you hear from the most vocal voices in debates about public service. But sometimes science is at its best when it challenges what is intuitively understandable and frequently said with an independent look and a willingness to follow the evidence. 

This piece was originally published in German by 'Die Zeit' and can be found in this link.