The weakness of the arguments for government subsidies for journalism can be seen in their inconsistency.
The advertising model that has supported journalism for more than a century has broken down, authors Robert McChesney and John Nichols argue in great detail in their book The Death and Life of American Journalism. They argue strongly for heavy government subsidies for journalism. And how would they finance the subsidies? One of the taxes they propose — and I’m pretty sure they were serious — is a tax on advertising.
After telling us emphatically that advertising is on its deathbed and can’t possibly support the journalism that our democracy needs to survive, they turn around without a hint of irony and insist that a tax on advertising is somehow going to help give new life to journalism.
The McChesney/Nichols book is a collection of thorough research, wishful thinking and puzzling inconsistency. As such it is a fairly ideal representation of arguments that government should intervene to save journalism. If that’s what you think, you will love the book. Its selective research supports the authors’ point of view, and if you don’t ask tough questions or consider how these upotian ideas would work in the real world, I’m sure you’ll find yourself nodding frequently in agreement.
I have blogged twice before about articles McChesney and Nichols wrote in advance of the publication of their book. When I responded critically to an October piece they wrote for the Washington Post, I emailed them inviting a response. McChesney emailed back:
I think when our book comes out in January we should take up the exchange then. I will be hugely surprised if you strike the exact same tenor when you encounter the evidence we have for our claims. You may well still disagree with us, but you will do so in a somewhat different manner.
I wrote again in January, responding to an essay they wrote for The Nation. I said that essay was not so persuasive that I planned to buy the book. Again, I invited response. Again, McChesney demurred:
If you won’t read the book, which has the evidence, I won’t respond. Because the evidence you are unfamiliar with is the basis of our argument.
Fair enough. He had the publisher send me a review copy of the book and I read it. I have examined the “evidence” for the claims by McChesney and Nichols. I am sure that people who want government subsidies find much comfort and ammunition in the book. But I don’t find it at all persuasive. In fact, I found the holes in their research and the inconsistencies in their arguments startling. They would be laughable if people weren’t seriously discussing and considering subsidies for journalism.
I will give McChesney and Nichols one point: They do successfully make the case that our nation has a long history of government involvement with the news media. Public Policy and Funding the News, a report released last month by Geoffrey Cowan and David Westphal of the Annenberg School for Communication and Journalism at the University of Southern California, addresses the same point and does a better job, quantifying much of the current and historic government spending that supports journalism.
(Personal disclosure: Dave Westphal and I worked together at the Des Moines Register in the 1970s and ’80s and remain friends, though we see each other infrequently.)
If you believe, as I do, that media can best perform our watchdog function without government involvement or interference, McChesney, Nichols, Cowan and Westphal will probably open your eyes with their detailed accounts of the ways in which media and government have long been intertwined. Even where the involvements are well-known — such as public broadcasting and licensing of commercial broadcast stations — these two reports provided valuable historical perspective that challenges any notion that a hard separation between government and media is necessary or has ever happened.
Both pairs of authors document government subsidies for the news media, from postal subsidies that helped our nation’s early press thrive (and continue today, though greatly diminished) through today’s subsidy for expansion of high-speed Internet access.
They stretch at times. McChesney and Nichols regard government printing contracts prior to the opening of the Government Printing Office in 1860 as subsidies for the newspaper industry. Clearly the industry benefited, but contracts for business products and services are hardly the same as a subsidy. That’s like saying the government subsidizes the janitorial industry if it hires a cleaning service for government office buildings.
Both pairs of writers document the value to the newspaper business of requirements that government bodies publish legal notices of their activities. Without question, newspapers benefit. Cowan and Westphal describe legal notices as “lucrative business” for publishers. And certainly newspaper publishers have defended their legal ads as jealously as farmers guard their subsidies. But, again, this is payment for services rendered, not a pure subsidy. The motivation and rationale for the notices is open government, not support for an industry. At the time these laws were enacted, newspapers were clearly the best way to reach a mass audience with these notices and achieve the goal of open government. I will grant that press associations defend these ads like an entitlement, and you certainly can make a case that Internet publishing will at some point, if not already, be a better way to reach the public with government notices. But the notices did not originate as a subsidy. They originated as a requirement of open government that happened to steer some business to newspapers, who were fairly compensated for the service they provided.
The most gaping hole in the research of McChesney and Nichols is their failure or refusal to consider that private enterprise could develop a new business model. OK, I’m not the most famous voice in journalism. I’ll forgive that they didn’t learn about my Complete Community Connection proposal for a new business model (though that means they overlooked Poynter’s Big Ideas Conference, and Poynter is too big to overlook). They did not examine the possibilities for transaction-based commerce from news sites. This is huge business for Amazon, eBay, bridal registries and hotel and airline reservation systems, so the potential is huge and you need to explain why it won’t work for news sites if you’re going to dismiss commercial business models as inherently doomed.
McChesney and Nichols did quote Jeff Jarvis to support their contention that newspapers are going to die. To quote Jarvis to support their vision of doom without even mentioning his New Business Models for News project — when they are writing about the lack of any new business models to save journalism — is so selective that it undermines their whole argument about the failure of the commercial media model. The New Business Models project was funded by the Knight Foundation and featured at the Aspen Institute Forum on Communications and Society. It’s too prominent to ignore. You have to explain why those models won’t work or your book lacks credibility. New Business Models includes a list of revenue opportunities for news organizations to pursue.
The Washington Post made a big splash last summer (no doubt late in the publishing schedule for McChesney and Nichols) with its clumsy “salongate” effort to find a new revenue stream in events. Reporting and commentary at that time documented other efforts by media companies to generate revenue through events. Someone seriously interested in examining the prospects of private-sector development of new business models would have considered events. You might well be able to document that they contribute only a tiny slice of revenue today and you could justify a conclusion that they don’t offer much hope to replace the revenue lost in the collapse of advertising sales. But you can’t justify a dismissal of any hope for new revenue streams if you haven’t examined the potential for events.
Because McChesney and Nichols did not study the full range of revenue opportunities, their dismissal of any hope for success in the private sector appears to be a preconceived notion supported with cursory research, rather than a logical conclusion based on thorough research.
McChesney and Nichols support some incremental measures that others have proposed, such as increasing spending for public broadcasting, revising restrictions on nonprofit corporations to allow more news organizations to function at nonprofits or allowing news organizations to function as low-profit limited liability corporations (L3C’s). But they also propose more radical moves, such as authorizing the government to buy failing newspapers and operate them for up to a year, either transitioning them to a “post-corporate” structure or closing them.
I’m sure McChesney and Nichols thought their best idea was $200 voucher for every American to donate to any nonprofit news medium of their choice, or to split among various media. Apparently unwilling to acknowledge the huge potential for government management of the media in such a voucher system, they opt instead for a system that virtually invites fraud:
The government will not evaluate the content to see that the money is going toward journalism. Our assumption is that these criteria will effectively produce that result, and if there is some slippage so be it.
This proposal is misguided on too many counts to pick apart in detail here, but beyond the embrace of fraud, I’ll name two:
- Qualifying media couldn’t accept advertising (an important form of communication in our society, recently protected in a Supreme Court decision). Also, remember, this whole plan is going to be supported in part by a tax on advertising.
- The authors lowball the cost of this scheme by saying if it was “wildly popular,” it would get 50 percent participation, costing about $20 billion. Well, if you’re not policing for fraud, qualifying media will offer $50 and even $100 premiums for people steering $200 their way. So let’s count on 100 percent participation and figure that this will cost $40 billion.
McChesney and Nichols like to have it both ways in their arguments: In discussing today’s aggregators, they dismiss them as unimportant because they don’t to original reporting. But in extolling the role of postal subsidies in early press development, the “free exchange” of newspapers, which encouraged republication of stories from other newspapers is somehow important and virtuous.
They frown on how the government used printing contracts as partisan patronage in the 1800s, but assure us that government subsidies would not result in playing favorites today.
McChesney and Nichols deserve ample credit for providing historical and global perspective for consideration of government subsidies for journalism, but they nearly ignore an even more important perspective: current political context. It is that context that makes consideration of the kind of heavy subsidies that they favor unrealistic and even dangerous on at least three counts that I can see:
- They do not take into account federal deficits and the mounting national debt. Our nation can’t afford to undertake another bailout of another industry, and if you want to suggest subsidies of $35 billion annually, as McChesney and Nichols do (lowballing, remember), you need to say how we’re going to pay for it. In more than 200 pages of arguments, the authors spend less than three pages discussing how they would pay for it. And the possible taxes they mention to fund the subsidies include the laughable advertising tax.
- They do not take into account the current political polarization, the media’s role in that division and the political process that would be required to enact any significant changes. Perhaps you could enact some changes, such as L3C authorization, without a huge, ugly fight that could result in dangerous restrictions on the media. But if Congress takes up anything that costs a lot of federal money (or involves five new taxes, as McChesney and Nichols propose, apparently failing to notice how often political ads attack politicians for raising taxes), you need to assume that it will mean the same sort of political mud wrestling that we see with health care reform. Even if you like the solutions that McChesney and Nichols propose (for the most part, I don’t), what are the chances that media reform will look like that when it makes it through Congress? I’ll take my chances with the private sector.
- You simply can’t escape the fact that government involvement will empower the government to decide (or at least heavily influence) winners and losers at a time of dynamic innovation. If that was ever the right role for government, it isn’t in our government’s current polarized, paralyzed condition. Again, I’d rather let the marketplace determine winners and losers.
McChesney and Nichols deserve credit for thorough research on the history of government involvement with media and for sincerity in their desire to find solutions. But they erode their credibility with name-calling, particularly in their final chapter. If you don’t agree with them, you are “shameless” and “dead-enders.” They liken people with faith in the marketplace to Colonel Nicholson of “The Bridge on the River Kwai,” unwittingly helping the enemy.
Cowan and Westphal suggest a three-point framework for policy debate over government involvement in journalism:
- First and foremost, do no harm. A cycle of powerful innovation is under way. To the extent possible, government should avoid retarding the emergence of new models of newsgathering.
- Second, the government should help promote innovation, as it did when the Department of Defense funded the research that created the Internet or when NASA funded the creation of satellites that made cable TV and direct radio and TV possible.
- Third, for commercial media, government-supported mechanisms that are content-neutral – such as copyright protections, postal subsidies and taxes – are preferable to those that call upon the government to fund specific news outlets, publications or programs.
That’s a reasonable framework for the debate and a high standard. The first point is the most important. Most of the ideas raised in the fantasizing about government intervention will be harmful to the development of new models of newsgathering. That’s the hurdle I can’t overcome. And the proposals of McChesney and Nichols fall far short of that standard.