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Rigorous Fearless Independent

The letter is free to access by clicking through the title.

Quality news media is a public good, and in the extraordinary circumstances of COVID-19 the sustainability of information and news provision should be ensured at all costs

COVID-19 has given new urgency to protect the supply of local and national news. News media, perhaps particularly local news media, is a critical information service for a vulnerable population, many of whom are confined at home. In the context of the findings of the Cairncross Review, the pandemic is intensifying rather than abating the sector's decade-long commercial crisis due to a clutch of inter-related structural changes.  

Many recent initiatives – including the Cairncross Review itself, the Nesta Future News fund and the Public Interest News Foundation – rightly focused on a framework for developing long-term sustainable models for news media. Government needs to shift the focus to managing an emergency; not just for our country’s health, but our citizen’s provision of quality news and information. Right now, we need to mobilize Government funding to make quality news a public service.

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James said "What has mostly happened so far is an increase in broadband usage during the day. So there are a lot more gigabytes going over the network, but they are doing so when the network wasn't busy, which makes it broadly manageable. I'm fairly confident that providers will be able to deal with this trend."

He added  "Providers have never seen anything like this before. They know how to increase capacity because capacity has been growing 30-40% a year over the past ten years. But growing 30-40% a month will be more challenging."

To fight against the UK’s incipient pandemic, a full lockdown is in place for all but essential workers in healthcare, telecoms, food, utilities and banks 

Households have cut expenditure on all out-of-home categories from transport to entertainment and shopping (apart from food), and a tsunami of insolvencies beckons. Advertising is in disarray as consumers pull spending for the foreseeable future 

The Chancellor’s measures of mitigation aim to preserve businesses until the crisis ends. Wage aid will keep furloughed workers paid, although mass unemployment and recession appear inevitable  

The UK mobile market was steady this quarter at around -2% ahead of out-of-contract notifications hitting from February.

The mobile sector is playing an important role in tackling COVID-19 and is likely to be relatively resilient in the short term with a broadly-neutral financial impact. Longer term it will be exposed to the fortunes of the economy.

Elsewhere, there have been green shoots of positivity in the outlook: some good regulatory news; a degree of price inflation; Carphone Warehouse’s retreat is a positive for the operators, and some financial drags will drop out as the year progresses.

Tom said “The Simpsons is a more Hulu show than it is a Disney+ show, but they needed that because they needed to grow scale. When it first launched, it was an antidote to Disney, in that it was the first real cartoon hit not explicitly for children."

He added “Netflix is different in that they make something for everybody. Netflix doesn't worry that much about its brand outside of providing entertainment, they're not gatekeepers of some sort of morality or anything like that, which, in the case of Disney, has built up a reputation.”

Tom said “The problem with streaming services is that audiences expect every TV show ever made to be available right now, but subscriptions are underpriced. Netflix gets around that by borrowing and Amazon uses it as a loss leader for e-commerce. Disney used to make a lot of money selling shows to other broadcasters, but its businesses with the largest profit margins now are amusement parks, cruises and merchandise. They want to reach massive scale, because if kids watch Frozen 2, they’ll want to go to Disney World and spend hundreds of pounds a day going on the ride or buying the outfits.”

Although increases are moderate so far, it is inevitable that overall video viewing will rise given a reduction in competition for people’s time. So far, unsurprisingly, TV news consumption has ballooned while unmatched viewing—a proxy for SVOD usage—has increased.

However, disruption to production of TV content and cancellation of live events will leave holes to fill in the schedule.

Flexibility is built into some types of programming, however nothing can replace live sport, while disruption in the production of scripted programming—especially high-volume soaps—will have knock-on effects that continue for years.