Funding journalism

Roll of MoneyLast week an argument that won't seem to go away bubbled up again - save Big J journalism and newspapers with government aid, or at the very least some form of indirect relief.

Sort of clues you in on the state of industry. Course, it wouldn't be the first time. The industry still has a dozen or so remnants of an effort to save two newspaper towns, the Newspaper Preservation Act of 1970.

The debate started anew perhaps on Jan. 21 when Ralph Whitehead Jr., a journalism professor at the University of Massachusetts at Amherst wrote a guest column on Boston.com that outlined the economic issues facing newspaper journalism as we've known it, but cautioned against government intervention.

What may be emerging today, however, is a serious case of market failure that can't be - and must not be - fixed by government intervention: the failure of the private sector to provide broadly inclusive journalism that is both comprehensive and reliable enough to meet the needs of a democracy.
Halfway around the globe in Switzerland at the World Economic Forum that idea was picked up on, but Columbia University president Lee Bollinger said government subsidy of journalism should be considered a viable solution.

Then at Forbes.com, Carl Lavin wondered what Nick Lemann, the dean of the prestigious Columbia School of Journalism, would think of that. He got in an email with several thoughtful arguments from Lemann of why government help could be considered. Among them:

One of the three or four finest and most ambitious news organizations in the world is a government agency -- the BBC. In the US, public radio and public television are not government operations per se, but they are partially funded by the government, and over the last generation or two they have clearly been a force for good in journalism. Then there is the indirect government subsidy represented by tax-deductible contributions to nonprofit journalistic enterprises -- everything from Harper's magazine to Frontline.
Lemann went on to say "Right now the mismatch between the social mission of journalism and the market support for that mission seems to be growing, so I think we should explore other means of support for serious journalism."

He got the problem right, but the answer wrong.

Michael Arrington of TechCrunch couldn't disagree more with Bollinger and Lemann.

The idea is both dangerous and absurd. For Bollinger, who is a free speech advocate, to even consider the idea suggests he hasn't thought through the consequences of the government financing the press. Freedom of the press is one of the most important checks on government. If they're paying the bills, the press is no longer independent.

Print media is wonderful, and it would be a shame to ever see it fail. But these are businesses that need to sustain themselves in one way or another. Looking for a government handout to perpetuate a quaint but outdated way of life is the last resort of the desperate. It should be avoided at all costs.
While the stocks of traditional media empires, particularly newspapers companies, have undergone double digit declines in the last 12 months, the companies continue to have high profit margins although declining. The picture changes when you look at just revenue from online operations.

It's clear the revenue model at newspapers that allowed tens to hundreds of reporters at newspapers small and large just doesn't seem to be there when you're looking to an online only world -- or even a mostly online world.

Even the tumultuous marriage of convenience of journalism and advertising seems to lose it reason for being in the online world. In traditional media, journalism brings readers and that brings advertisers and that brings revenue that allows for journalism, executive bonuses and stock dividends among other things.

In the online world, it's not that simple. Did Monster cover the State of the Union address tonight in order to draw job searchers? Does AutoTrader cover the Legislature to find car buyers?

Yes content, including "real journalism," still can create environments that connect consumers and advertisers, but it's very different from the day when you had to buy an entire paper to get Saturday's garage sales. That's why Craigslist become an anathema to publishers.

Would the loss of good journalism negatively impact not only local communities, but democracy as a whole? I'd like to think so.

But government subsidies or aid would only tend to freeze a business model that won't work in the future, and -- much like the Newspaper Preservation Act -- are unlikely to accomplish their societal or economic purpose over the long haul.

Joint Operating Agreements formed under the Newspaper Preservation Act are declining and where dissolved, the result usually isn't two strong newspapers, but rather one. The change just happened years later than it would have under normal market forces.

But what about the digital future?

Dave Morgan, now with AOL, wrote in a Dec. 20, 2007, OnlineSpin column:  

Newspapers are generally pretty good at local news and news editing. The problem is, they can only leverage that capability in their print newspapers and on their Web sites, and the two together are not likely to be able to pay the bills required to run great newsrooms.
He suggested "freeing" newsrooms to market their content to all comers -- or more correctly to give them the opportunity to develop new markets for news beyonds the newspaper's own products and platforms.

Perhaps a possibility.

What I do know will happen is that journalism will survive and thrive. Economically viable models will emerge and those who see the opportunities or are able to adapt to the new models will be successful -- perhaps hugely so.

Paul Bradshaw in a blog post Sunday on "Making money from journalism: new media business models (A model for the 21st century newsroom pt5)" surveys the landscape of known possibilities and offers some sign posts.

It's a good read, but I think most observers would agree the ingredients for the perfect mix of commerce and journalism for online media haven't been found.

They will. News is an essential element of an information economy. Media companies don't need food stamps to survive.

Update: Jason Lee Miller of WebProNews weighs in the same topic and suggest bloggers will save journalism. "... the heart of the evolution. Low overhead, readership, and space to sell are the buds of new life on the tree of journalism."