Few of my friends or acquaintances are fans of the editorial
page of The Wall Street Journal. I live in Cambridge,
Mass, where President Obama received 88% of the vote in November.
So I thought I’d call their—and your—attention to the lead editorial
in today’s paper. Titled “Ink-Stained Politicians,” it is critical of congressional
initiatives to “rescue” the newspaper industry. One of the leaders of this
movement is my own senator, John Kerry. As are many of us, he is concerned
about the future
of the hometown Boston Globe. (The stakes may be particularly high, though,
for the senator. In his re-election bid last year the Globe gushed: "The case for reelecting John Kerry
would be strong under any circumstances . . . [but] the country needs his voice
more than ever.")
So it was Sen. Kerry’s subcommittee that held
a hearing on May 6 titled "The Future of Journalism." It was a
morose affair, with publishers enumerating the fate of failing and fallen
comrades. Then the senators turned to the culprits, Huffington Post and Google.
The hook for the
hearings was what role Congress could conjure to help out what Kerry buys into as “the fourth branch of government.” One
proposal, from Maryland Senator Benjamin Cardin, would allow newspapers to convert
to nonprofit status (hmm-it seems like the point is that they are already nonprofits.
What they should say is not-for-profits). Their operating revenues would be tax
exempt. In return, they would be precluded from endorsing political candidates, though, as the
Journal points out, that wouldn’t prevent them from taking sides more subtlety.
The other idea being floated was some sort of an antitrust
exemption that, as described by Dallas Morning News publisher James Moroney,
would allow the newspaper industry to conspire to find ways for making money from
putting the work of its journalists online. Of course, I thought that was what
the industry has been doing with such projects as Newspaper Next and The Newspaper Project. But I
suppose a major league baseball-like exemption would allow publishers to band
together for steps that would prevent the Huffington Posts and Googles from
making money off their backs.
The Journal’s position is one that I have trumpeted, as have
my colleagues here Dorian
Benkoil and Vin
Crosbie. That is to let the forces of technologies, consumer behavior and
the marketplace play themselves out, at least for awhile longer, before
have argued (as have others) that there will be changes, for sure. But that
there will also evolve multiple business models. There will be winners and
losers. Services lost-- for example some local coverage if some cities or towns
lose their daily printed papers—are highly likely to be regained as new players
jump in to fill a vacuum.
We see hints of that with an array of Web sites that focus
on local and even hyperlocal news. Some, like EveryBlock, for the moment are compendia
of links to local government sites, some blogs and even local news from other
sources. But that doesn't mean that is their end point. It is their opening gambit. Should they gain traction some will start adding original content (or they may find the to gain traction they will need original reporting). A few, such as Buffalo Rising and Patch, already do have reporters covering the local
scene. Very few now. But given time, and a market, more
speaks for many in the legacy media who are urging Congress to legislate a
"consent for content" requirement to get the Googles and Huffington
Posts of the online world to pay "fair compensation" for content they
pick up and then sell advertising on. The
Journal comments “So, although most
newspapers are giving away their content free online, the feds should guarantee
them a stipend from anyone who gets someone to pay for it. There's a winning
In any event, it would seem to be a matter for negotiation rather than legislation.
The Journal continues: “The larger story here is that
newspapers are enduring the familiar process of economic "creative
destruction," in this case brought on by the Internet. Advertisers are
fleeing to search engines, while barriers to entry in publishing have crashed.
Despite the pain this causes to certain companies, this is not much different
than any other industry buffeted by new technology or business strategies.”
Creative destruction is right. In the early 1990s, the 200 year old Encyclopaedia Britannica was a $650 million company. Five years later in was bringing in one third that. It’s business model based on a high priced part time sales force selling “guilt” as much as $2000 sets of books was undermined by Microsoft’s Encarta, given away for free on a CD with a new computer and based on an old Funk & Wagnall supermarket-distributed encyclopedia. The World Book suffered similarly. Both have had to retreat and reformulate to survive in the world of DVDs and online delivery. Where was Congress then?
The Journal’s editorial concludes with an argument almost
stolen (dare I charge?) from a recent post of mine, save the last line:
“Some new business model will
emerge for journalism, if not for all newspapers, and in the meantime the
business of reporting the news isn't vanishing. It is taking new forms and
adapting, with newspapers growing their audiences online even as the sources of
their revenue shift. The industry is currently debating how to charge customers
for content, and no doubt many experiments will be tried. No matter who emerges
victorious, the journalism business will be stronger and more credible if it
avoids the government's embrace.”
To its credit, the Obama Administration is keeping its distance. Press Secretary Robert Gibbs, responding to a question, commented that while it's sad for cities to lose their daily papers, any public assistance "might be a tricky area to get into.…I don't know what, in all honesty, government can do about it."
The sooner the suits in Washington
and the executive suites in Dallas
understand that, the better off it will be for the future of journalism.