British newspaper publishers could be shunned by investors because they do not offer decent returns, threatening the future of a pillar of democracy, a government report said on Friday.
Britain's major newspapers, which include The Sun, Daily Mail, Sunday Times and Daily Telegraph, have seen circulations decline sharply in the last couple of decades, although they have countered this to some extent with online products.
"We have found a clear pattern of declining sustainability in the sector since 2010, which is consistent with reduced income and costs, as well as a reduction of investment and relatedly capital employed in the sector," said the report from Economic Insight, commissioned by the Department for Culture, Media and Sport.
The COVID-19 pandemic caused an acceleration in print decline, the report said, with an 18% drop in total average print circulation per issue for national daily titles between March 2020 and March 2021.
Britain's two biggest national publishers in terms of average print circulation and numbers of titles are Daily Mirror owner Reach and Rupert Murdoch's News UK, which publishes The Sun, The Times and The Sunday Times, it said.
The report said that while digital models could be commercially viable in their own right, print-publishing models might largely disappear.
The government said it had commissioned the study to find out how financially sustainable the industry was given its role in society.
"This is particularly important given the rise in dis- and misinformation and the need for transparent and accurate news, especially in the current COVID-19 context," the report said.
It said the regional press was generally less resilient than the national one, especially in relation to pension liabilities.
