Tuesday, December 08, 2009

The Bright Future of Journalism

There has been significant handwringing about declining newspaper readership and the demise of journalism ever since the advent of television. The rise of the Internet has evoked increased fear of these horrors to the point that some are seriously calling for a government takeover — lite version, of course — of newspapers and journalism. After all, kinder, gentler tyranny would never morph into heavy-handed tyranny, would it?

News tycoon Rupert Murdoch says that this is exactly the wrong way to go in this WSJ op-ed. (Please note that the Wall Street Journal is owned by Murdoch’s company.) Murdoch says, “Government assistance is a greater threat to the press than any new technology.” He writes:
“From the beginning, newspapers have prospered for one reason: the trust that comes from representing their readers' interests and giving them the news that's important to them. That means covering the communities where they live, exposing government or business corruption, and standing up to the rich and powerful.

“Technology now allows us to do this on a much greater scale. That means we have the means to reach billions of people who until now have had no honest or independent sources of the information they need to rise in society, hold their governments accountable, and pursue their needs and dreams.”
Murdoch notes that some players in the news market will inevitably fail to step up to the challenges of a new and continuously changing paradigm. Those that don’t, he says, should fail. But he is optimistic in the prospects for the news industry, saying, “The future of journalism belongs to the bold, and the companies that prosper will be those that find new and better ways to meet the needs of their viewers, listeners, and readers.”

Murdoch offers the following three rules for success in the new era of news delivery:
  • “[G]ive people the news they want.”
  • Charge a “fair but modest price” for news content.
  • Update government regulations to address the way news works in the 21st Century.
On point one, Murdoch complains that some are writing more for themselves and their colleagues in the journalism profession than for news customers. Thus, they earn lots of journalism awards but have declining circulation. The news business is, first and foremost, a business. No business that fails to satisfy customer desires should expect to survive.

Companies that provide desirable quality content, says Murdoch on point two, will have no problem finding customers willing to pay for that content. “The old business model based mainly on advertising” writes Murdoch, “is dead. … The reason is that the old model was founded on quasimonopolies such as classified advertising, which has been decimated by new and cheaper competitors such as Craigslist, Monster.com, and so on.”

In a clear jab, Murdoch includes news aggregators such as Google in the customers that will be willing to pay for quality content. Google CEO Eric Schmidt had his own preemptory shot in this direction with his own WSJ op-ed last week. Schmidt essentially said that Google is willing to work with content creators to help them charge for their content. But he also suggested that aggregators provide value to news creators by channeling traffic to their websites that they otherwise wouldn’t see.

On his final point, Murdoch wants government to restructure regulations so as to promote increased competition. It should, he says, scrap anti-competitive rules designed for the ancient past. Above all, government should not get involved in news via direct or indirect subsidization. He writes:
“The most damning problem with government "help" is what we saw with the bailout of the U.S. auto industry: Help props up those who are producing things that customers do not want.

“The prospect of the U.S. government becoming directly involved in commercial journalism ought to be chilling for anyone who cares about freedom of speech. The Founding Fathers knew that the key to independence was to allow enterprises to prosper and serve as a counterweight to government power. It is precisely because newspapers make profits and do not depend on the government for their livelihood that they have the resources and wherewithal to hold the government accountable.

“When the representatives of 13 former British colonies established a new order for the ages, they built it on a sturdy foundation: a free and informed citizenry. They understood that an informed citizenry requires news that is independent from government. That is one reason they put the First Amendment first.”
As a society, we have a very poor track record of predicting new technologies and a worse track record of forecasting how they will be adopted and will impact society. Moreover, we have a deep history of fear of new technologies. One of the earliest cassette tapes I owned was a rock ballad about humankind being conquered by amoral computers that had become sentient. This sentiment stretches into the distant past where blacksmiths were regarded with deep suspicion as workers of black arts and were made to live separately.

Our regulatory structures work similarly to protect established technologies and practices while being slow to adapt to newer paradigms. In doing this, we unwittingly stifle innovation. Fortunately the indomitable human spirit seems to eventually break through barriers to innovate anyway, even in the face of legal disapproval.

I once regarded the future of journalism with the kind of gloom that pervades newsrooms today. I now believe that those grim faced newsies will eventually go the way of the dinosaur as they stand in place and are superseded by more agile and optimistic news entrepreneurs.


Charles D said...

Well, I have been pretty dubious about this idea since I first heard it some months ago. However if Rupert Murdoch is opposed to it, there must be some merit in it. I mean having Rupert talk about our need for "honest, independent sources of information" just robs me of any further attempt at satire.

Murdoch wants more deregulation, particularly in the broadcast and internet media, not to promote competition but in order to further consolidate media ownership - particularly his own. We have deregulated all sorts of industries since Carter started with the airlines, and in every case we have fewer choices than we did before. The purpose of corporate business is not to compete, but to destroy their competition, and they are good at it.

The Founders (nice touch for an Aussie) did not envision huge multinational corporations that are more powerful than the federal government. In fact Jefferson said "I hope we shall... crush in its birth the aristocracy of our moneyed corporations which dare already to challenge our government in a trial of strength, and bid defiance to the laws of our country." (1816 letter to George Logan).

So in summation, it may be justly said that Mr. Murdoch, as usual, is amply possessed of fecal material.

Scott Hinrichs said...

I have no personal quarter for Murdoch. His specific regulatory suggestions may or may nor bear any merit. However, the general suggestion that regulations flex to meet the realities of 21st Century technology ought to be welcomed by all -- except those that stand to profit from antiquated regulations.

Charles D said...

I have a strong feeling that when Murdoch talks about flexibility in regulation, he means getting rid of it.

In fact, there are some things that can be done to insure that we have access to a larger number of sources for news, information and entertainment.

We can make sure that no carrier blocks or slows down or otherwise interferes with internet traffic so that I can get to your site as easily and as rapidly as I can to MSNBC or Fox. We can break up media monopolies and restrict the number of content providers and cable and broadcast networks that can be owned by a single entity so that our media choices are not governed by an ever smaller number of companies. We can increase funding of public radio and television so it will be less dependent on corporate "sponsors" and will provide a wider range of voices.

Contrary to Murdoch's argument, decreasing government regulation will decrease competition - that is easily demonstrated by our recent history.

Should the government bail out the print journalism business? I don't think so. Should the government re-impose restrictions on ownership of multiple media outlets that crosses over from print to broadcast? Yes. That would at least provide more competition and more room for innovation.