We’ve been contemplating the future of web publishing and journalism for sometime now, but recently the Federal Trade Commission decided to weigh in on the debate with a discussion paper that outlines potential policy recommendations to support the reinvention of journalism.
Supporting the Reinvention of Journalism
Having started in May 2009, after a full year of investigation, the FTC presented a paper aimed at generating discussion about the current and likely future environments for news-gathering and reporting, as well as FTC’s policy recommendations for supporting “the ongoing “reinvention” of journalism”
In an effort to full understand the evolving world of online and print journalism, the FTC addressed the current state of the news; new sources of revenue; and asked is “experimentation is enough.” Among their observations:
The Current State
- Advertising matters: For most of the twentieth century, advertising paid for the vast majority of the news produced in the United States. On average, about 80% of revenues from newspapers came from advertising and 20% came from subscribers.
- Revenues are falling: Newspapers’ revenues from advertising have fallen approximately 45% since 2000.
- The Internet complicated the news industry: The web provides advertisers with many ways to reach consumers, leaving online advertising to generate much less revenue than print advertising.
- The economy: Newspapers have had to cut staff and find sustainable business models, all the while trying to cover news globally and locally.
New Sources of Revenue
- Experimentation is good: newspapers need to find new sources of revenue implementing pay walls, subscription models and other strategies
- Experimentation is bad: no one knows if any combination of the strategies tried will be able to generate sufficient revenues over the long run to maintain existing newspapers.
- Niche sites are cute: Hyperlocal sites, smaller online news sites and sites that rely on funding from venture capitalists are popular, but not profitable.
Is Experimentation Enough?
- The news is a “public good”: In general journalism always has been subsidized to a large extent by, for example, the federal government, political parties, or advertising.
- News can provide a public service: good news reporting can be essential to maintaining a democratic government and can be a tool of social justice
- Sustainable models are needed: There is no sustainable business model that supports free and accessible news while also funding the resources necessary to ensure good news reporting.
Proposed Policies & Impact
With these newspaper knowns laid out, the FTC goes on to propose ways to innovate journalism so that it is accomplished at lower costs. They suggest amending copyright and fair use policies, recognizing hot news protection legislation and licensing the news, among others.
Despite the FTC’s good intentions, the paper comes across as bureaucratic and capitalist. Many critics of the report note the fact that subsidies and tax exemption status alone will not save an industry that has fallen because of consumer choices, publishing trends and options, and an economic recession. While it’s noble for the FTC to want to help out, its strategies are narrowly focused on addressing issues that are financially-related and not those that are related to way the news has been managed behaviorally.
In addition, it’s relatively clear that such proposed taxes are unpopular. A new Rasmussen Reports survey tackled the FTC’s proposed taxes and found that 84% of respondents opposed a three percent (3%) tax on monthly cell phone bills to help newspapers and traditional journalism. As well the survey revealed that 76% opposed a proposed five percent tax on the purchase of consumer electronic items such as computers, iPads and Kindles to help support newspapers and traditional journalism. Seventy-four percent (74%) oppose the proposal to tax small web sites and blogs to help the newspapers they draw their headlines from.
Fiscally Driven Content?
Coincidentally, an aging and lagging news agency has shown some signs of renewal this week. AOL announced that it is planning to hire hundreds of journalists, editors and videographers in the coming year as it builds out its content-first business model. Reportedly, the content operation, which includes more than 100 brands, including AOL Health and AOL Autos and brands such as Fanhouse and PopEater, will be reorganized into 17 separate "networks" the company will package to advertisers.
AOL and others like it have seen original content perform and monetize better than other models, so they are encouraged to create and mold a model that provides high quality and topic focused information and access to well researched and vetted investigative reporting, which they hope will entice advertisers.
The FTC outlined an accurate perspective on the current state of the news industry, but offered up advice that takes an organic enterprise and tried to produce a robotic recipe for success that can be applied systematically across an entire industry, regardless of shape or size.
Twentieth century thinking in a twenty-first century world helped to create the issues the news industry is facing. And while, the financial aspects are definitely worth focusing on, it’s silly to ignore how it has been affected culturally as well.