This third, and final, post on this theme addresses an issue that has been the subject of intense discussion in the few weeks since I posted the first two parts: a new business model for journalism.
The debate, while not new, was triggered by the bankruptcy filing by Tribune Co., which owns the Los Angeles Times, Chicago Tribune and other newspapers. That event clearly has caused a great deal of anxiety in the highest ranks of American journalism, not to mention widespread paranoia that newspapers really are in a death rattle.
There appears to be growing acceptance, even amongst arch-conservatives stoutly defending the once-proud but now-crumbling ramparts of newspaper journalism, that the traditional business model based on capitalist media corporations is failing — and that new models must be found fast. Much of the teeth-gnashing, it should be pointed out, is going on mainly inside established journalistic precincts (managerial suites at daily newspapers and J-School faculty lounges). The young generation actually out there using Web 2.0 platforms doesn’t care a whit about the professional doom and gloom of their tenured elders. The kids are busy reshaping the world, and more power to them.
What interests me here, in particular, is the debate about the role of the state (in the form of subsidies) in rescuing the ailing journalism business. This is a subject that merits serious attention, not only as a practical matter but, more importantly, because it raises larger philosophical questions about fundamental values in liberal democratic societies.
I confess to being surprised that the issue of state funding for newspapers has even come up in a country like the United States, with its long libertarian tradition of freedom of the press, especially from government control. The idea gained currency about a year ago when things were looking grim for newspapers. One notable advocate of state funding has been Nicholas Lemann, dean of Columbia University’s School of Journalism, who held up Britain’s BBC as an example of excellent government-funded journalism.
In the current crisis, the American journalism establishment doubtless believes the timing is right. Maybe, they must be thinking, their beleaguered industry can sneak into the line, behind the banks and auto giants, with cap in hand for a government bailout.
Government intervention in the media has been institutionalized in other Anglo-American countries such as Britain, Canada, and Australia. In those countries, thousands of journalists are, in effect, on the government payroll as employees of state-owned public broadcasters. The fact that most of these state-owned TV networks actually behave just like their commercial rivals (despite the venerable mythology they perpetuate about their high-minded “public service” mission) makes state ownership all the more contestable.
The hypocrisy goes even deeper in the media establishments of these countries. Whenever governments have floated the idea of restrictions on newspaper ownership, the knee-jerk reaction in the press has invariably been a chorus of indignation about the danger of government controls. In many instances, the same newspaper scribes who have energetically defended the press against the threat of state regulations are married to someone working as a journalist on the state payroll at the BBC or CBC.
The United States has been largely spared these hypocritical convulsions because the American government does not own or directly finance TV networks and newspapers. The PBS model in America is completely different from the state-owned, taxpayer-financed BBC.
And yet, today, we are hearing voices in the corridors of the American journalism establishment in favour of state financing for newspapers.
Geneva Overholser, a veteran newspaper editor and J-prof, wrote a report in 2006, “On Behalf of Journalism: A Manifesto for Change”, which raised the issue of state financing for newspapers. In her report, she recommended public discussion about a “government role in protecting, regulating, and supporting a free and responsible press”.
Overholser was recently appointed director of the Annenberg School of Journalism in California. She therefore joins Nicholas Lemann at Columbia’s J-School amongst the institutional patricians of the American media establishment who are not particularly troubled by the prospect of state intervention in the news business. They frequently evoke high-minded notions about journalism as a “public good” that should not be subject to market forces (an indirect way of advocating state subsidies). Today they can add to these claims the fact that newspaper journalism is now a victim of market failure (though they will almost certainly neglect to mention that Old Media newspaper managers are largely to blame for this).
J-School deans can reliably find support for their views from media critics in the Marxist tradition, many of whom are their academic colleagues. One is Robert McChesney, the author of a significant body of literature which, on the whole, challenges the structural effects of corporate media control. “I don’t think there’s any question, legally or constitutionally or theoretically, that journalism is a necessary public good for our constitutional system to work,” says McChesney, a professor of at the University of Illinois and founder of the media-reform organization called Free Press.
Left-liberal advocates of state intervention are correct to point out that, libertarian free-speech values notwithstanding, governments (including in America) already regulate and finance journalism through a complex arsenal of indirect fiscal and other mechanisms. These include reduced postal rates, sales-tax exemptions, government advertising, to name only a few.
Beyond the Anglo-American world, many Western governments directly subsidize newspapers. In France, where I live, state protection for newspapers and their unions is a vast racket of feather-bedding, gold-plating, and institutionalized cronyism. The French state provides some $400 million in direct subsidies and nearly $1.5 billion in indirect fiscal incentives (including funding for the Communist Party’s house organ, L’Humanité). The French state also controls much of the national television industry. There’s no such thing as a free lunch, however, and anybody who believes that French journalists work without fear or favour obviously have never lived in this country.
That, I believe, is the major flaw in the belief amongst America’s left-liberal journalistic patricians in the virtues of state financing. While undoubtedly sincere, American newspaper managers and J-profs are naive about state financing because they have no hard-nosed experience with its inevitable pressures, effects, and outcomes. It’s a purely theoretical proposition in their thinking and, when you mix that with misguided normative notions about the laudable BBC, it actually starts to sound like a good idea.
It is highly unlikely, in my opinion, that calls for a state rescue of the newspaper industry would gain any legitimate political traction in the United States. Firstly, there is no cultural appetite for it; and secondly, it would be bad public policy.
The real problem, as noted, is that newspaper managers and J-Schools were the ones whose short-sighted, self-interested, and over-complacent behaviour got newspaper journalism in this mess in the first place. In that respect, American newspapers would resemble the Big Three auto makers. They appear to want massive government bailouts to rescue them from a disater of their own making; and what’s more they want the money to help them re-finance a business-as-usual solution.
Indeed, if you follow the debate among newspaper editors and J-School professors, they’re no different. They’re not planning to reinvent the news business; they’re looking for a solution to save the newspaper business as they know it. True, some newspapers, desperate to find a way out of the crisis, are starting (slowly) to adopt Web 2.0 features. But many newspaper managers and J-profs are merely talking a good game about embracing New Media. The uncomfortable truth is that their time has gone. Yet they’re stubbornly hanging on to all the top spots in the industry and J-Schools, preaching the virtues of the old religion, instead of stepping out of the way and letting the new generation re-invent the business. In time, the inexorable process of creative destruction will sort this out. But the forces of resistance are powerful and well-entrenched. And now, it seems, they might want state subsidies so they can stay in the game.
But it won’t happen — not, at least, in America. It would be folly, both philosophically and as a practical matter, to run to the rescue of the newspaper industry with taxpayer funds. When assessing potential business models, you have to first accept that the current model might die and vanish — and doesn’t deserve to be rescued.
As I noted in a previous post, the current model of “professional” newspaper journalism is only a half-century old, dating from the period after the Second World War. Mass-circulation newspapers have only been around for a century or so. There is nothing absolute about these platforms for the distribution of information and opinion. There was news and opinion before newspapers appeared, and there will be news and opinion after newspapers vanish. The only people who are panicking are those with something to lose in the short-term — namely sinecures, position, and prestige.
There is already a lively discussion about potential business models for news, including some interesting reports coming out of research centres like Harvard’s Berkman Center for Internet and Society. The debate about the fate of newspapers and magazines as businesses finds its origins in despair, but many of the prescriptions emerging from this discussion are pointing in the right direction.
One business model is non-profit journalism financed by well-endowed foundations. Another, of course, is networked, Web-driven “citizen” journalism. We already have many inspiring examples of this model championed by advocates like Jeff Jarvis. If local newspapers actually started serving their own readers, via websites, instead of parading like national/international papers to satisfy the ego and career-building strategies of their editors, they may discover that there’s a good business in local news and information.
I predict a major shakeout among Old and New Media companies in the next few years, and from that flurry of M&A activity we will see the emergence of a new business model for news, information and opinion. That doesn’t mean that other business models – like non-profit journalism financed by foundations – won’t emerge. But smart money, in my opinion, would bet on a mega-merger reconfiguration of the media industries, driven by Web-based content, to fill the vacuum left by the death of printed newspapers.
Journalism schools, too, are going to have to get with the programme, because if the status quo is allowed to persevere in those precincts, pretty soon the students are going to know more about media production than their professors. A lot of unpleasant stable-cleaning is needed, but I’m not sure incumbent deans in those institutions have the stomach, or the inclination, to get the job done.
It will be interesting to follow over the coming months the voices in favour of state subsidies for newspapers, and to see whether they organize themselves politically and actually make a formal case for government intervention. The spectacle of their curious contortions will be intriguing to behold, though difficult to applaud.
Epilogue update: On Dec. 23, the Pew Research Center released survey results showing that, in the United States, the Web now surpasses newspapers as a source for news. Meanwhile, for those with a morbid interest in the newspaper industry’s death rattle, there is author Paul Gillin’s “Newspaper Death Watch” site, which tracks the agonizing process of economic necrotization like a running autopsy. And here are some predictions for 2009; and a feature in Atlantic magazine reflecting on the potential death of the New York Times. And here, finally, is an unmistakably polemical article, published in The Nation, that represents the old-guard leftist view that newspapers should be rescued by government subsidies.