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Wednesday, September 30, 2009

Should the Govt Bail out Newspapers?

Just finished doing an interview on the Sandy Rios Show. The topic? Should the government bail out newspapers? My answer to that is a resounding: "No!"

Newspapers are just one arm of the professional news business--or journalism, if you will. There is also television--the networks and cable. Once upon a time there was also radio, and while it still does some journalism, it is not what it used to be. If newspapers take a handout from government, how long will it be before the network news, which is also hurting, does. And what about cable and radio? It is a slippery slope. Soon the government will control all of the so-called "mainstream media."

Then there is the Internet, the blogosphere, Twitter and an ever changing landscape of new media platforms. How long will it be before the government attempts to control those delivery platforms? Granted, that could be difficult to do. Most governments--even today--are having a tough time censoring the Internet or keeping their people from accessing it.

Let's face it, government money always comes with strings attached. Look at NPR and PBS. They get about 15% of their budget from the government. The result is that it has made NPR and PBS the target of many threats--from both the right and the left. One accuses them of having a liberal bias and the other calls them elitist.

But let's look at newspapers.

To understand what has happened with newspapers you need to understand the newspaper business. And that is what it is--a business. In my journalism classes I often pose this question to students:

What is the most important thing any news organization needs to do? The answers range from "tell the truth" to "be accurate and responsible." Those, I agree, are critical for any professional news organization.

However, the answer I was looking for (and I NEVER got it from all the years I posed the question) is this: The most important thing a news organization needs to do is make a profit. To do that they need to sell trust--to be a trusted and reliable provider of accurate information.

Unfortunately, too many newspapers have liquidated that trust by gutting newsrooms and jacking up advertising rates. That has opened traditional newspapers up to competition from new media that are not bound by up-front capital costs of starting a newspaper.

Most people think subscription and newstand sales are primary profit centers for newspapers. That is not true. In fact, subscription and newstand sales accound for only about 15% of a newspaper's revenues. About 80 percent comes from advertising--and when you break that down is looks like this: Retail 37%; General, 19%; Classified, 44%.

And there you see the crux of the problem. For the past 10 years or so, Internet companies such as Craigslist and eBay have been eating away at newspapers' primary profit center: Classified advertising. I recently moved from Illinois to California and I discovered just how effective internet advertising can be. I wanted to sell some furniture and other items we didn't want to take with us. I posted an ad on Craigslist and within an hour or so I had people e-mailing and calling about the items. Newpapers can't compete with that and saavy newspaper companies began some time ago to launch their own internet classified advertising sites...

The best thing about journalism--and newspapers--is that in the U.S. they are separated from government and protected by the First Amendment:

"Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances."

It is that kind separation which makes the press the "4th Estate." British politician Edmund Burke said there were "Three Estates in Parliament; but, in the Reporters' Gallery yonder, there sat a Fourth Estate more important far than they all." FYI, the other three estates are those of the church, the nobility and the commoners.

It is patently dangerous for any newspaper to take anything from the government. Most newspapers have ethics policies that prohibit reporters from taking money or any kind of gift from anybody--including government. The reason for that is clear. They want to remain independent.

What happens to that independence once newspapers take government money. We have a nation of state run media--a nation of Pravdas.

Beyond that, however, is the fact that bailing out industries that suffer because of technological change or increased competition is not a wise choice in the long run.

It is hard to say what will happen to newspapers down the road--but I am optimistic about the future of professional journalism--the kind of journalism that produces original reporting rather than the flurry of banal and plagiarized blather than infects the blogosphere today.
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