Consultation period: 15 March 2019 to 15 April 2019
Status of consultation: Closed
On 15 March IMPRESS opened a four-week public consultation into its funding arrangements and annual subscription fee charging system which closed on 15 April. By consulting with the wider news publishing industry and the public we sought to meet our obligations under the Royal Charter for self-regulation of the press which requires approved regulators to comply with recognition criterion 6:
Funding for the system should be settled in agreement between the industry and the Board, taking into account the cost of fulfilling the obligations of the regulator and the commercial pressures on the industry. There should be an indicative budget which the Board certifies is adequate for the purpose. Funding settlements should cover a four or five year period and should be negotiated well in advance.
The consultation paper was published on IMPRESS’s website and was distributed to subscribers to our monthly newsletter. The consultation sought responses from potential future members and from others who have an interest in our work and who want to make constructive suggestions. We invited current members to provide further information if they wish, regardless of whether or not they responded to the annual participant consultation that closed on 1st March 2019, which consulted on the same proposals. The consultation encouraged news publishers to respond to this consultation, whether or not they are currently a member of IMPRESS.
Main proposals of the 2019 Fees Consultation
The main proposal concerned a change to the way that regulated publishers are charged for participating in IMPRESS’s ‘approved’ regulatory scheme. We propose to replace the system of calculating fees based on tariff bands with a system based on a fixed percentage (0.1%) of annual turnover in order to ‘smooth out’ increases in fees. A minimum fee of £50 will apply to publishers with a turnover of £50,000 or less. A maximum fee of £250,000 will apply to publishers with a turnover of £250m or greater. This change ensures that fees are directly related to a publisher’s turnover and provides for fees to increase or decrease in line with changes in revenue. This is intended to provide a fairer, more transparent and proportionate charging system.
The second proposal concerned IMPRESS working towards developing a mixed financial model with a blend of income from fees, grants, donations and other services. We confirmed that IMPRESS’s core costs would be funded by a new four-year grant from the Independent Press Regulation Trust (IPRT), which provides us with secure funding until October 2022.
The consultation invited respondents to address four key questions.
- Do you agree with IMPRESS’s strategy to sustain our operations through a mixed funding model of subscription fees and external funding? If not, please explain why?
- Do you agree with the principle of IMPRESS continuing to rely on external funding to sustain itself and on keeping publisher subscription fees affordable to small publishers? If not, please explain why?
- Do you believe that membership of IMPRESS will continue to be accessible and affordable to all publishers if annual subscription fees are based on a fixed 0.1 percentage of a publisher’s turnover? If not, please explain why?
- Do you have any other comments to make about IMPRESS’s financial plans or fee charging model?
IMPRESS received one response to the public consultation. The respondent agreed with all of the proposals. IMPRESS also received five responses from participating publishers to its earlier consultation with members. Four respondents agreed to the proposals. One respondent disagreed with the proposal to require small publishers with a turnover of between £50,000 and £100,000 to pay 0.1% of turnover rather than a fixed fee of £50.00. They offered an alternative proposal which was to require all publishers with a turnover of less than £100,000 to pay a fixed annual fee of £50.00 and to charge a higher fee for larger publishers.
We considered this alternative proposal and decided that a system based on 0.1% of turnover is fairer on publishers of all sizes because it is directly linked to the revenue of publishers. Publishers pay in direct proportion to their annual financial turnover. We also considered the cost impact on small publishers. Under the new system a publisher with a turnover of £98,000 would pay £98 compared to £50 under the old system, which we do not consider to be unreasonable or unaffordable. However, if a publisher’s revenue increased from £98,000 to £100,000, taking them into the next turnover band, then they would pay £100 under the new system compared to £550.
Following a consultation with participating publishers which ran from to 1 February to 1 March 2019 and a consultation held with potential members and the public from 15 March to 15 April 2019, IMPRESS will charge members an annual subscription fee based on 0.1% of turnover which will be measured by the net sales generated by the business in activities of, and related to, news publishing, in the publisher’s most recent 12 month accounting period. The new charging system will apply to all fees that fall due on or after 15 May 2019.