Should the feds try to 'save' journalism?
By G. Michael Dobbs
Among the press releases I recently found in my inbox was the following:
"Senator John Kerry (D-Mass.), Chairman of the Commerce Subcommittee on Communications, Technology, and the Internet, will hold a hearing on Wednesday entitled, 'The Future of Journalism.' The subcommittee will examine issues threatening the news media, explore how the industry arrived at this point and discuss potential models for news delivery in the future.
"'It's a critical time to examine the future of journalism in the digital Information Age and what it means to our country and our democracy,' said Kerry. 'American history is inextricably linked to the narrative of our free and independent press, and today, America's newspapers, which have been the bedrock of the free press, are struggling just to stay afloat as new means of delivering information are multiplying by the day. Whatever the model for the future, we must do all we can to ensure a diverse and independent news media endures.'"
Yes, that's absolutely true. To help Kerry understand the current situation a whole bunch of big media types, including a vice president of Google, were asked to testify. Interestingly enough, there was no one from Massachusetts and no one from any paper that wasn't from a large market.
I'm sorry, but I have to laugh a bit. When did the VP of Google sell an ad, worry about circulation or make sure a story got covered? If you want to find out what wrong with newspapers these days, you're not going to get the full picture from this group.
Up front, though, I have to say I'm very worried about the federal government trying to "fix" journalism.
Senator, this is an open invitation for you to come by my office and be my guest the next time you're in Western Massachusetts and allow me and my colleagues to speak with you about the challenges newspapers face.
You see, Senator, every time a chain store opens in our area, there is the very good chance they won't be interested in advertising locally not with us, our print competitors or with television and radio.
The economic model for local newspapers was founded on the idea of local businesses supporting the publications and then in turn the local businesses were supported by the readers of the 'paper. Circulation funds coming from the price of the 'paper were also considered icing on the cake.
There has always been competition in most markets for advertising dollars, so that's not new. What is new is the dynamic that has taken place beginning with the Reagan Administration: the erosion of the working class through the moving of manufacturing out of this country and the weakening of the labor movement.
Local retail businesses have suffered and closed because of these changes in their markets. Chain stores that don't play on the same playing field have hurt locally based retail. That has affected the number of ads bought, which in turn has weakened newspapers.
There's more than that, though. The Internet has become the medium of choice for many people and newspapers have followed this audience by establishing Web sites with news content. The difficulty many publications face is establishing enough ad revenue on these sites so they are profitable. These problems have come during a time in which the economy has slowed down until it hit the current depression oh, sorry, deep recession.
It's clear the newspaper industry needs to devise new economic models. The challenge is that Americans expect their news to come to them either "free" you just have to look and respond to the ads or at a slight cost. In these economic conditions, that arrangement has proven to be insufficient.
This has nothing to do with the hard copy versus digital agreement some futurists put forward, as Web-based products are facing the same issue.
The other issue that has affected journalism is the earning expectations media corporations have had. In recent history, profit margins have been higher with media companies than with other businesses and that spoiled some corporate types. When the profits began to fall, content was cut to maintain profits. When content was cut, readers had less reason to buy a paper. Less circulation coupled with diminished ad revenue led to more cuts of content, which in turn you get the idea.
If the middle class hadn't been decimated; if local businesses had been able to remain strong; if corporate greed hadn't taken its toll; and if the present recession hadn't taken place, newspapers in general might be in a different position.
That's a lot of "ifs."
I have no idea what the federal government could do in this situation other than to prohibit the number of newspapers a company could own, so the big media companies could be broken up, although the economy seems to be doing a good job of that.
Still, Senator, I hope that you would take me up on your offer. I'll spring for lunch at a good locally owned restaurant.
By the way, the radio industry is suffering through its own problems, many of which are similar. Would you be interested in hearing about that?
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