Asserting that the collapse of mainstream media demands the same urgency as “the threat of terrorism, pandemic, financial collapse or climate change,” two authors of a forthcoming book called Saving Journalism propose massive government intervention in the journalism crisis. Writing in the liberal journal The Nation, John Nichols and Robert McChesney say the recent debates over micro-payments and nonprofit funding is all well-intentioned, but these rescue scenarios don’t address the serious structural problems the US media faces. In essence, the public watchdog function is vanishing with nothing to replace it.

newspaper_revenue_trends

Media Post chart

This trend isn’t new; cost-cutting in the newsroom began in the 1970s when media tycoons began to form quasi-monopolies under the umbrella of government protection. Today, the media is a pathetic shadow of its former self, doing “almost no investigation into where the trillions of public dollars being spent by the Federal Reserve and Treasury are going but spar[ing] not a moment to update us on the ‘Octomom,'” the authors write.

Government already subsidizes media to the tune of tens of billions of dollars annually through mailing discounts, government advertising, monopoly broadcast, cable and satellite licenses and copyright protection. However, private interests have taken advantage of those subsidies to create wealth, and in the process are destroying the services they provide the public, Nichols and McChesney assert.

And they get specific about what needs to be done:

  • Eliminate postage for periodicals that get less than 20% of their revenues from advertising;
  • Give all Americans an annual tax credit for the first $200 they spend on daily newspapers or online sources that meet certain quality criteria;
  • Allocate funds to enable every middle school, high school and college to have a well-funded student newspaper, a low-power FM radio station and accompanying substantial websites.

Face it: The old system is collapsing and won’t be resurrected, they say. We are entering a world in which government abuse and corporate greed will run rampant because no one is watching over the abusers. The business media completely misled the public about what was happening in Iraq and completely missed signs of financial disaster. And that was before 20,000 more journalists lost their jobs.

Although you need to take the left-wing source into account, this article is a pretty compelling argument for government intervention.  It is particularly chilling in its description of the impact that media cutbacks have already had on the public’s ability to understand the financial crisis and its own legislators’ actions.  The authors maintain that the estimated $20 billion cost of their proposal is a drop in the bucket compared to the amount being spent on the financial bailout.  The stretch may be in equating the urgency of the two problems.

Uphill Climb

Stewart: Millennials' Cronkite?

Stewart: Millennials' Cronkite?

The Nation will have a battle convincing a skeptical American public that government support is the answer. Recent data from Rasmussen Reports paints a picture of a public that is largely disengaged from traditional media institutions while increasingly deriving its news from entertainment. A telephone survey of 1,000 Americans early this month found that 30% overall read a daily newspaper, but among respondents under 40, that percentage was only half as large. The survey also showed that newspaper websites have less “stickiness” than a product that arrives at the front door each day. Only 8% of US adults say they read their local paper’s website every day.

Meanwhile, one-third of Americans under 40 say Comedy Central’s Daily Show and Colbert Report are replacing traditional news outlets, which is slightly more than the 24% of Americans overall who think this is true. And there’s a popular opinion that this is a  good thing. “Thirty-nine percent of adults say programs of this nature are making Americans more informed about news events, while 21% believe they make people less informed,” the report says. Interestingly, Democrats are much more inclined to share this positive view than Republicans, by a margin of 48% to 28%.

Miscellany

The New York Times Co. imposed temporary 5% pay cuts for most employees in hopes of avoiding cuts to the newsroom staff.  Nevertheless, the Times also laid off 100 people in its business operations and said it would reduce freelancer spending and possibly consolidate some sections.  The pay cuts are subject to union agreement. Times management threatened to lay off 60 to 70 people out of its 1,300-person news staff if the union doesn’t concur.  The Times Co. cited an overall drop in advertising revenue of 13.1% in 2008 and 17.6% in the fourth quarter.  The pay reductions were described as temporary.  Salaries will revert to their previous level next year unless economic conditions improve fail to improve.  The company has already laid off more than 500 people this year.


The recession has clearly taken hold in the advertising business and the result is likely to be “the closing of more big regional daily newspapers and bankruptcy declarations from even more big publishers,” according to Media Post. Fourth-quarter 2008 results were a disaster, and that’s coming on top of two years of declines that seemed to get worse with each quarter. Newspaper classified advertising fell 39.2% overall in the quarter, with job-recruitment advertising plunging nearly 52%. Perhaps more ominous is that online revenue at newspaper sites was off  8% in the quarter, although online advertising is weak across the board right now.


The Rockingham News of southern New Hampshire has just published its final edition, and the weekly that has served the region for more than 40 years offers quite a lesson in its own history. Aubrey Bracco must have interviewed a couple of dozen local residents to get their recollections of what the paper meant to them, and he pens a loving and informative farewell.


Mike Hughes, president and creative director at the Martin Agency, pens an impassioned plea to his colleagues to support newspapers with their advertising dollars. “Our industry needs newspapers — but just as important, so does humankind,” he writes.  So stop following the latest trend and putting your advertising in the trendiest places.  “How many agencies aren’t selling newspaper advertising to their clients as hard as they should? It’s time for a wake-up call.” It’s an invigorating argument until you read the bio and see that Hughes’ employer is the “agency of record for the Newspaper Association of America.”


Writing on Mashable, Woody Lewis lists five ways newspapers can embrace social media more effectively. He notes that The New York Times now has an application programming interface that third parties can use to access its content from their programs. This is a cool idea. He also says partnerships with strong technology partners are a good idea.


Jay Rosen lists a dozen articles about journalism that he really thinks you should read, although we can’t fathom his top pick: Paul Starr’s laborious New Republic epic. Many of the others are excellent, though, and a few we hadn’t seen before.

And Finally…

We were thrilled to be included among the “Death of Newspapers” bloggers cited by Paul Dailing in Huffington Post. We agree with him that our self-absorbed, righteously indignant, told-you-so attitude is crap and that we have no answers to the problems facing the industry. We encourage you to boycott our book (available in fine bookstores everywhere) in support of his position. We should be ashamed of ourselves.

Comments

comments

This entry was posted on Monday, March 30th, 2009 at 9:20 am and is filed under Advertising, Business News, BusinessModel, Classifieds, Future of Journalism, Journalism, Layoffs, NewMedia, Newspapers, Regulation, Solutions. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

7 Comments

  1. March 30, 2009 @ 10:22 am



    Here’s another nail in the coffin of media: [ http://www.nytimes.com/2009/03/30/technology/internet/30mag.html?ref=technology ] Hewlett-Packard is announcing its latest entry into the “Race For The Bottom”.

    The need for a big intaglio or offset-web press is further eliminated and the democratization of the press is being pursued for profit by the company that brought us nearly affordable ink-jet and laser printing.

    By doing it for extremely limited interest magazines, they insure that people will be able to use the post office for fulfillment and get the magazine to the people (who could register at an on-line site to belong to the “vanity press” readership.)

    I’m proposing that people, get their news the same way through RSS distribution, for money, via the post office.

    Google and other aggregators can get a précis of any “breaking news” that a news organization puts out, until its na ‘olds’ and can be on their general web site for free.

    Posted by msbpodcast
  2. March 30, 2009 @ 10:30 am



    I really DON’T think that direct subsidies of the newspapers or of the press (as in the printing press) is warranted.

    There is no need for government involvement beyond the current post office subsidies on bulk mail.

    This way, we can morph the “Newspaper Death Watch” into a “Changed Business Model: Survivors and Fatalities”

    Posted by msbpodcast
  3. March 30, 2009 @ 12:07 pm



    Dailing’s post did not strike me as funny enough to carry its own weight. Satire can be an elusive art form. However, two posts in the comment section were worth a glance:

    montemalone
    http://www.huffingtonpost.com/paul-dailing/how-to-become-a-death-of_b_178807.html?page=2&show_comment_id=22316548#comment_22316548

    ArgumentativePatti
    http://www.huffingtonpost.com/paul-dailing/how-to-become-a-death-of_b_178807.html?page=2&show_comment_id=22314442#comment_22314442

    Re 50 cents an hour: That’s about right! On the bright side, that’s a five-fold increase from what my father me to pick bagworms off our trees. And of course it’s better than negative income, which is what some writers and musicians are earning these days. 😉

    Posted by Quixotic Chick
  4. March 30, 2009 @ 8:03 pm



    Yo Quixotic Chick,

    unless the were very lucky and managed to survive the culture vultures, the RIAAs limited client list and the sheer mismanagement of their own record labels, most artists earn negative amounts.

    Every one-hit-wonder bands could have turned out better but their record company didn”t have the guts to stick with them. They sabotaged them in order to keep the formulaic “churn machine” going.

    They were expected to bat the hit out of the ballpark first time and every time.

    Even Mozart, the Beatles and Beethoven had some off days.

    “Joe Average” bands weren’t allowed to.

    The way you manage bands is you squeeze them dry of melodic ideas, make the bands PAY for the studio, the roadies, the management, process them until they all sound like the last his that made the company some money and throw them away before they become expensive.

    The love of making music has nothing to do with the dirty tone-deaf business of music.

    Anybody who thinks it does is as dead as last years rap or hip-hop “artiste” (They may call you an “arrtiste” in Paris but you’re just another loud cash cow to a record exec.)

    Posted by msbpodcast
  5. March 30, 2009 @ 8:05 pm



    Your comment on the state of the advertising business is only partially correct.

    They are caught in the same bind, falling revenues, but not quite since they are able to switch to web advertising.

    Posted by msbpodcast
  6. March 31, 2009 @ 6:02 am



    Small Business Credit…

    Related posts: PROTO5 Live Coverage: Freemium vs paid business models Conversations section of Proto 5: Shalin from 10miles. com and Amit Ranjan Slideshare… PROTO5 Live Coverage- iFlapp and Lords Automotives Stay tuned. Get the live coverage of Proto…

  7. April 4, 2009 @ 8:53 am



    Government subsidy of journalism’s watchdog role is a recipe for further disaster. Similar to the self-regulation approach for the banking industry. Ca mon!

    Colbert and Stewart are not primary sources of news, even for people who insist so in polls. You can’t enjoy the humor of these satire shows without understanding the references to actual news.

    Posted by WhatHo!