Do We Have An “Oversupply of Journalism” And A Newspaper Cull Is A Good Thing?

Philip Stone November 12, 2009 Follow on Twitter

In the past week there have been calls by a senior Financial Times editor and by the head of the WPP ad agency that we would all be better off if natural economic rules applied to newspapers – only the fittest and strongest should survive and we should let the weakest die. No doubt the financially strong newspapers think that’s a fine idea whereas the weak ones don’t, but what part, if any, in this financial argument does supporting democracy play?

Chrystia Freeland, the FT’s US managing editor, told the Joan Shorenstein Center on the press, politics and public policy at Harvard University, that she likens what is going on with newspapers these days to what is happening to the car industry.

According to an article on the Center’s web site, Freeland compared the news industry to Detroit, journalists being the equivalent of the automobile production line, and the article continued, “The difficulties surrounding the economic crisis ‘shouldn’t be the driver and shaper of the solutions that we have, and the shaper of what we think will be the journalism that we can continue to produce in the future.’ Instead, she argued that the ‘end of the oversupply of journalism …might actually be a good thing,’ as fewer news organizations compete, there are greater opportunities and ‘pricing power’ for the ones that remain.” (Memo to Harvard: even a state college 101 journalism class teaches that partial quotes are bad journalism, should be backed up with full quotes, and in this case why not have just have let her full quotes tell that part of the story?)

Well, it’s easy for someone who works on a successful, strong newspaper to say what Freeland said. Would she be saying that if she worked for the Philadelphia newspapers or any of the others that are still in bankruptcy court? She’s not alone in such utterings. Martin Sorrell, head of WPP, speaking at the Ad-Tech last week in New York said he wanted to see more contraction. “All we see are newspapers and magazine titles dropping like flies,” he said, “And that has to continue.”

Nothing there about the death of newspapers adversely affecting democracy.  But wait, it seems some government s believe saving newspapers is a good thing and  there are signs out there of discounting that old taboo about newspapers getting some sort of financial support from government . Could it just be that government help in ensuring a vital tool of democracy doesn’t have to translate into government controlling what the press says? After all, although the US newspaper industry seems to shudder at the thought these days of getting government assistance in reality it has been enjoying government assistance since 1792 when, as the Columbia Journalism Review (CJR) reminds us, US newspapers lobbied Congress to enact legislation establishing below-cost mail rates.

And so it is with some interest to note that in Scotland the government is suggesting local town councils that have switched their job ads from newspapers to online sites should switch back again to newspapers to support the industry.

The canny Scots may not be so blunt as to say “Save our newspapers” but they can get into legal intricacies by pointing out to the local councils that law mandates that job ads and public notices be made available to the entire population, but in Scotland only about 60% of Scots have broadband.

The newspaper situation is dire in Scotland partially because an umbrella organization representing all Scottish local councils has switched all of their job ads to a dedicated online portal. More than 20% of a newspaper’s job ads came from councils so switching those ads away to that portal means less revenue, which means less staff etc. etc. On the other hand, for the councils that portal translates into significant ad cost savings.

And so, without getting into the legal intricacies of what “the entire population” really means, do those local town councils have any obligation to prop up their local newspapers by ensuring those job ads return to print? If they do it, then surely that’s a backhanded subsidy?

A spokesman for the council umbrella organization told The Guardian, “We must be mature about this and move away from the very narrow argument around one versus the other, newspaper versus online. It has to be about utilizing to the maximum all the tools at our disposal in our efforts to reach as wide an audience as possible. That said we cannot underestimate the budget choices facing all of the public sector at this present time and councils have to make best use of all the resources at their disposal – so there is obviously a cost element to consider as well.”

It’s no secret that many publishers around the world knowing that local governments are required to place ads in newspapers have increased such rates substantially over the years where allowed (in some countries such as India the government sets the rate), but now with Internet competition perhaps publishers need to review those rates to get that business back?

Back in the US, The state of New Hampshire agreed this week to guarantee 75% of a $250,000 loan for the new owner of the daily Claremont Eagle Times, payable if the newspaper defaults on its loan with a local bank. The state guarantee probably means the 25 staff at the newspaper will continue to have jobs for a while – but whatever you call it when the state puts taxpayer money at risk isn’t that a subsidy?

The purists will hate all of this and will support the FT’s Freeland in opting for the survival of the fittest, but the CJR – not exactly the bastion of looking for media government bailouts -- probably sums up the situation best, “The idea that a purely commercial media alone can continue to deliver the journalism we need is becoming difficult to swallow. If we don’t get beyond the rational but outdated fear of government help for accountability journalism – if we just let the market sort it out – this vital public good will continue to decline.”

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