Government support for journalism

Consider public subsidies for newspapers, says Penn prof

“Despite contemporary concerns, generous press subsidies have been the norm since the early days of the republic. And scholarly research continues to show that subsidies don’t discourage critical journalism; often, they have the opposite effect. Removing commercial pressures, while maintaining strong fire walls between government influence and media content, could help liberate investigative journalism.”

Victor Pickard, in an opinion piece for The Philadelphia Inquirer


Filloux: ‘No hope’ that public subsidies can reverse declining print readership

Monday Note
Frédéric Filloux looks at a study that analyzes public subsidies of various forms of media and concludes that there’s no correlation between public spending and print readership. Finland is a big spender, per capita, and print media there has a high penetration: 79 percent of the population. But Germany spends just 11 percent of that and achieves a 72 percent penetration. Moreover, print media in the U.S. have almost twice the penetration of their counterparts in Italy, although the U.S. spends just 16 percent more on a per-capita basis. Filloux says Finland’s high readership is due to its editorial product, not subsidies. “There are no Keynesian mechanisms in evidence when it comes to correlating public spending with print media penetration,” he writes. Moreover, the study “kills long lasting prejudices such as European media being massively state-funded, or an American public sector unsupportive of the media industry.” He goes on to list four guidelines for public subsidies, including “no life-support funding.” || Related: FCC media report shows how interest in government subsidies for local journalism fizzled Read more


FCC commissioner: Report lacks bold recommendations needed to support journalism

Federal Communications Commission
FCC Commissioner Michael J. Copps criticizes the agency’s “The Information Needs of Communities” report released Thursday, saying it isn’t the “bold response” needed to address the lack of accountability reporting and diversity in local media. “Instead of calling for stepped-up Commission action, it tinkers around the edges,” he writes. His thoughts on the report’s recommendations after the jump. Read more

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FCC media report shows how interest in government subsidies for local journalism fizzled

There is a lot to like in the Federal Communication Commission’s exhaustive, 478-page study of shortfalls and potential solutions in media.

I’m particularly glad Steve Waldman, who oversaw the report, and his collaborators rejected an assortment of false dichotomies. Old vs. new media, professional or citizen reporters, commercial or nonprofit? “Obviously we need both,” the report says.

In a similar spirit, Waldman concludes that the proliferation of digital news outlets “masks a shortage of reporting …This illusion of bounty risks making us passive.”

Good enough. But when Waldman and company get to what the FCC or Congress can do about deteriorating local accountability reporting, they pretty much punt. Better broadband access, favorable tax treatment of news nonprofits, better digital disclosure of government data and regulatory filings — most of it is familiar stuff.

There are a couple of provocative ideas, such as redirecting to local media the massive, $1-billion-a-year federal ad spend for such things as legal notices and military recruiting. But it is not so clear who could make that happen.

Maybe this outcome could have been foretold. In pulling together some background material, I realized it had been. When Waldman posted FCC’s announcement of the project and his appointment to lead it on his blog in October 2009, the first commenter, Charles Cosimano, wrote:

“Good luck playing hopscotch in the bureaucratic minefield that is the FCC. If you look at what they are really saying, it is, ‘We are faced with media that we cannot hope to regulate and we have to find creative ways to explain to various pressure groups that they are wasting their time trying to get us to do the impossible.’”

Over the 18 months since, the notion that the FCC would adopt the report faded, and it was simply presented as an informational study, not necessarily the agency’s view. The title was changed from “The Future of Media” to “The Information Needs of Communities” (echoing an earlier Knight Commission report).

In speeches and a visit to Poynter, Waldman suggested that the FCC’s regulatory power was mainly in broadcast and that the report would tilt that way.

In fact, though, the report gives equal attention to the losses in newspapers’ reporting capacity. And as my colleague Al Tompkins’ account of Thursday’s FCC meeting makes clear, the recommendations for television and radio are small steps forward, too, such as requiring better disclosure of pay-to-play coverage.

How we got here

The federal interest in weakened journalism and its impact on democracy started in May 2009 with a Senate hearing sponsored by John Kerry (D-Mass.) and a smaller event in the House put together by Adam Schiff (D-Calif.). At the time, newspaper advertising was in free fall. The Rocky Mountain News had closed and the Seattle Post-Intelligencer had ceased printing, and it seemed quite possible that The Boston Globe and San Francisco Chronicle would fail.

When the Federal Trade Commission held its initial workshop in December 2009, the backpedaling had already begun. As both a participant and an observer, I was struck by remarks of FTC Chairman Jon Leibowitz and Rep. Henry Waxman (D-Calif.), who artfully framed the problem but by no means promised government help.

As Leibowitz concisely put it, there remains “an open question whether the changes to newsgathering amount to ‘creative destruction’ or just plain destruction.”

Waxman, personally open to some subsidy to boost local news efforts, complained that there was no consensus within the media community about whether government help would be in the public interest.

That effectively took off the table a proposal, first voiced by Leonard Downie and Michael Schudson in a study for Columbia’s School of Journalism, that a pool of money be set aside and distributed state-by-state as grants to support quality, local reporting.

The discussion had deteriorated further at a subsequent FTC workshop six months later. In the spring of 2010, FTC staff had prepared a draft paper cataloging various recommendations it had heard, including several for direct subsidies. Critics jumped on that, reporting the subsidy idea as the FTC’s own recommendation. The FTC issued a press release complaining of “misinformation” from critics, and one of the FTC commissioners kicked off the workshop by defensively repeating the point.

A year later, the FTC report remains unfinished, release date to be determined.

At those two workshops, several executives of public radio and television argued that if federal money for local reporting would be forthcoming, they should get it because they have an existing infrastructure.

Since then, public broadcasting has come under attack by the Republican-led House and has scrambled to hold on to existing levels of support.

Early on, the Newspaper Association of America said thanks-but-no-thanks to any government funding, citing First Amendment concerns. I, however, didn’t think that an arms-length fund for reporting was ridiculous on its face. Much of the federal support for scientific research is distributed on that model, and vigorously democratic countries like France and Sweden underwrite newspaper circulation.

Yet I have come to believe that for now, the newspaper industry and other legacy media need to chart their own path to stability, and that market forces will help identify winners in the new media space. Foundations, other philanthropists and citizen donors assess rigorously and quickly what is worth continued support.

Bigger governmental initiatives may make sense, but later — if the shortfall in local reporting gets markedly worse and a constructive intervention opportunity becomes more evident. Perhaps a well-documented and wide-ranging report on problems and possibilities is the best the two agencies can do for now.

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It is Time for the FCC to Reboot the Media System

Reboot: An Open Letter to the FCC About a Media Policy for the Digital Age
Columbia Journalism Review, Nov./Dec. 2010

Poynter’s Rick Edmonds recommends the “excellent (albeit long) piece by Steve Coll in CJR about modernizing FCC media policies.”

In his letter to the FCC’s Steven Waldman, Coll writes that “….we badly require new policies and new thinking in Washington because the media policy regime we have inherited is out of date and inadequate for the times in which we live.

….The problem is that the media policies that govern us in 2010 — a patchwork stitched from the ideas of Calvin Coolidge’s Republican Party, Franklin Roosevelt’s New Deal, Lyndon Johnson’s Great Society, and Ronald Reagan’s deregulatory wave — have been overtaken by technological change.

From the country’s founding, American media and journalism have been continually remade by technological innovation. Political pamphlets made room for industrially printed newspapers, which made room for the telegraph, which made room for radio, which made room for broadcast television, which made room for cable and satellite services, which made room for the World Wide Web, which is making room even as we read this for the Kindle, iPad, and mobile phone applications.

When such technological, industrial, and economic changes dislodge the assumptions underlying public policy, the smart response is to update and adjust policy in order to protect the public interest. And politically plausible reforms that would clearly serve the public are within reach. It is time to reboot the system.”

(Related: Keep the Public In Public Broadcasting, NPR’s “On The Media.” Nov. 5, 2010, Audio)

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FTC Future-of-Journalism Inquiry Wraps Up With Little Momentum for Major Intervention

I’ll be among the 30 participants in the Federal Trade Commission’s roundtables Tuesday in Washington, D.C. evaluating proposals for government action “to support the reinvention of journalism.” I expect a stimulating discussion, but not a run-up to landmark regulatory action or legislation.
Over the last year, the steam has gone out of any movement toward major federal intervention that would shape a media mix in rapid transition. Since spring of 2009, newspapers and traditional media have grown markedly healthier, at least in the short run. Concurrently, there has been an explosion of new digital media experiments, with philanthropists and private capital providing ample start-up funding, absent any push from government.
Equally important, the exploration of possible government action by the FTC and others turned up a host of problems. Subsidies or anti-trust assistance for newspapers would appear to prop up fading for-profit enterprises over new media alternatives. On the other hand, it is less than clear that government could be skilled and disinterested in picking worthy recipients if it threw money behind new media, non-profit news units.
And fatally, there is no consensus among news companies themselves, let alone Congress or the public, about what would constitute appropriate help, as FTC Chairman Jon Leibowitz and Rep. Henry Waxman pointed out at the first of the FTC’s workshops in early December. Crisis or no crisis, sentiment still prevails for keeping media fully independent of government, except perhaps for postal subsidies and tax treatment.
I talked by phone Friday with Pat Schultheiss, who put together the roundtable meeting, and she confirmed the disclaimer included in the draft: FTC staff inventoried the ideas presented, but has not recommended them. The draft is simply a compilation of proposals that came up in workshops and other FTC staff research, Schultheiss said. It is not even a selection of ideas the staff thinks most worth considering, she added. Some of them may be terrible and perhaps Tuesday’s participants will say that.
The ideas are grouped in four categories:
  • Proposals regarding copyright and antitrust law
  • Proposals regarding indirect or direct government funding
  • Proposals regarding tax and corporate law
  • Proposals to lower the cost of journalism
The last of these categories includes such options as quicker and less costly responses to Freedom of Information Act requests, provision of interactive data by governments at all levels, and government investments in information technologies that journalists and others could use.
In my view, the best of the proposals is a modest one: IRS or legislative action that would clarify that news ventures could operate as non-profits and still accept advertising. This would allow a local group of individuals and/or foundations to purchase a newspaper intending to run it as a non-profit and to accept tax-deductible contributions. Similarly, local non-profit start-ups would not be left guessing, as they are currently, whether they are courting objections from the IRS as they develop advertising as one revenue stream.
I don’t think (as some advocates seem to) that non-profits are inherently better. Indeed, as I wrote recently, several of the most interesting start-ups — like Civil Beat in Hawaii and TBD in Washington, D.C. — are structured as for-profits. But it would seem good policy for federal tax law to accommodate as many options as possible.
Even without a dramatic resolution, I wouldn’t write off as a waste of time government exploration of journalism’s future. The staff’s statement in the draft’s opening pages on “The Current State of News” strikes me as concise and on target, though Jeff Jarvis is correct in saying it is newspaper-centric (it draws some on my work at Poynter and on the State of the News Media 2010 annual report).
Tuesday’s discussion, an ongoing study by the Federal Communications Commission, and future work could turn up different and better ideas. Opinion among lawmakers and the public may settle as the situation ripens, especially if the provision of serious news takes another significant turn for the worse.
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Right now is a great time, though, for letting nature, creative destruction and innovation take their course. Will newspapers and other traditional media recommit to an adequate news effort and find new revenue streams as advertising budgets continue to move to all things digital? Which of the start-ups will demonstrate financial stability and success with news audiences and marketers?

With these free market dynamics playing out at warp speed, later is the better time for deciding whether government invention is needed and if so, what kind. Read more

New Study: As Media Subsidies Decrease, Government Should Support Innovation

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It looks like we can add government assistance to the pile of disintegrating business models facing the media.

A new study of historic subsidies and emerging trends tracks various tax breaks, reductions in postal subsidies first enacted in 1792, and upcoming cutbacks in public notices that government regulations have traditionally forced into American newspapers.

In addition to a detailed review of past practices, the report by Geoffrey Cowan and David Westphal of the University of Southern California serves up some even-handed perspective on the hot-button issue of government funding for news.

There are plenty of reasons to challenge government funding of news — as well as a few reasons to consider it — but none of the debate is served by ignorance of the substantial thread of subsidy running through American journalism history.

Cowan and Westphal pose two central questions about the future of such funding, the second “potentially trickier,” as they put it, than the first:

  • “Is a new form of government intervention prudent, and necessary to ensure that Americans have access to the kind of information they need in a democracy?”

  • “If there is such a need, is government capable, amid such overwhelming change in the news business, of making choices that will make things better?”
  • With that second concern in mind, they urge consideration of two ideas:

  • “Relax restrictions on domestic consumption of news reports by the Voice of America, Radio Free Europe/Radio Free Liberty and other government-funded international broadcasters.”
  • One of the study’s authors, Cowan, dean emeritus of the USC Annenberg School, has significant background in a couple of the government entities discussed. He served as director of the Voice of America in the Clinton administration and is a former board member of the Corporation for Public Broadcasting. Westphal, executive in residence at Annenberg, is a former Washington bureau chief of McClatchy Newspapers.

    The authors propose a three-point framework for government action related to news industry finances:

    • “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 news-gathering.”

  • “Second, the government should help promote innovation, as it did when the Department of Defense funded the research that created the Internet…”
  • “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.”
  • Read more

    FTC Workshop An Odd Mix of Caution and Dangerous Thinking

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    I have an inside-out viewpoint on the Federal Trade Commission’s two-day workshop on “How Will Journalism Survive the Internet Age?” This was an occasion for government to listen to some of the usual and a few novel takes on the current turmoil. I was most interested, though, in the brief presentations of the two government officials who spoke.

    And here there was news. Both FTC Chairman Jon Leibowitz and Congressman Henry Waxman get the problems and the high stakes should traditional news outlets crash before an adequate replacement system emerges. They are on the cutting edge of trying to find a way for government to help (the journalism if not the institutions). But neither thinks there is much chance of consensus on how to help anytime soon.
    “Whatever the new business models for journalism may be — and we have seen some glimmers of light in endeavors such as, ‘Talking Points Memo’ and ProPublica — they are not yet fully apparent or fully sustainable.

    “At the same time, we are witnessing a quantifiable — and, some would say, qualitative — demise of the Old World Order of news delivery.

    “That is why it still remains an open question whether the changes to news gathering amount to ‘creative destruction’ or simply ‘destruction.’ “

    A pretty compelling call to action, I’d say, but the workshop was framed merely as a good start. FTC commissioners other than Leibowitz were not in evidence. A second workshop on potential government action is scheduled for spring.

    Leibowitz spoke too of coordinating with similar spade work getting started at the Federal Communications Commission. And part of what the FTC hopes to do is advise Congress, which is also early days into exploring constructive interventions.

    So, yes, it’s slow. That is how it works in government. Incremental steps along the way like the workshop are essential. The more consequential the change, the longer it takes.
    But that pace is out of sync with the rate of destruction in the news business, as Leibowitz recognizes. As I highlighted in my presentation during the conference’s opening session, the business fortunes of newspapers and other traditional media will likely rally, but the next six months to a year are almost certain to be a continuation of cutbacks, buyouts and business failures.
    In another year, much more of the Old Order may be so far gone it cannot be saved.
    Waxman, a smart advocate of proactive government interventions, was even more explicit when he spoke Wednesday about the groundwork needed before anything governmental can be accomplished.
    First, he said, “there needs to be consensus within the media industry and the larger community it serves that (any) proposal is in the public interest.” In fact, there is still more than a little sentiment within the battered industry of thanks-but-no-thanks, especially if the proposition is direct government investment in content.
    Second, Waxman said, any proposal must have bi-partisan support. A liberal-led bailout of news outlets perceived as leaning liberal won’t fly.
    So while I wish that the pace of fact-finding, debate and action could be accelerated, realistically I don’t think it can be or will be.
    Which brings me to another takeaway. There are more than a few people with credible credentials who have not only written off traditional journalism outlets, they all but say good riddance.
    Author, investor and business professor Jonathan Knee said he was not especially bothered by the withering of print newspapers and other traditional reporting, because he can find everything he really needs to know on the Web. (I’m sure Knee has a more shaded view than his brief workshop remarks allowed since he has been an investment banker on several corporate media deals).
    Former FCC Chairman Reed Hundt, an influential member on the Knight Commission on information needs of communities, summarized its findings without even the nod to journalism that the full report gives.
    It’s Hundt’s thesis (and the report’s) that with the right data access, strengthened libraries, leadership from universities and suitable “community gatherings,” citizens will plug into a do-it-yourself system for assembling and interpreting information, probably superior to the Old Order.
    A big building with an expensive press, Hundt observed, is “not necessarily a logical hub for community conversation.”
    To which I respectfully say: That’s misguided and dangerous.
    I don’t begrudge Knight or anyone else generous start-up investment in the shiny new, alternative and all-digital. Even those not yet sustainable experiments are already adding a great deal and have a role in informing communities that will only grow.
    But I don’t get the logic of throwing under the bus traditional media and the work of the professional journalists they still employ, effectively enabling and cheering on their potential demise. I think even those frustrated futurists may find themselves missing some of that old-school journalism as more and more of it disappears. Read more

    Next Steps for Downie-Schudson: ‘Mutualizing’ News about News

    What’s most interesting and useful about “The Reconstruction of American Journalism” report issued by Len Downie and Michael Schudson Monday is not so much what it chronicles or recommends.

    Look instead at what it’s provoking.

    My Poynter colleague, Rick Edmonds, and others provided expert, deadline analysis of the report’s diagnosis and prescriptions. They did that even before the rest of us were jamming office printers across the land with nearly 100 pages documenting what the authors characterize as American journalism’s “transformational moment.”

    It’s a moment in which they assert “the era of dominant newspapers and influential network news divisions is rapidly giving way to one in which the gathering and distribution of news is more widely dispersed.”

    So, too, with their own report. Credit somebody at the Columbia Journalism Review — and the school that runs it — with understanding that from the start.

    Rather than waiting for reactions, CJR commissioned four as part of Monday’s release.

    In the spirit of the Next Step Journalism, each of the four responders advanced the story — the future of news — beyond where Downie and Schudson left it at the bottom of Page 97.

    In comments and posts and Tweets across the net, others have done the same. Steve Buttry points out that social media, unaddressed in the report, could help fill some of the gap in accountability news.

    Joel Kramer suggests a way to avoid some of the conflict inherent in the sort of government funding the report proposes. Jeff Jarvis asks why the authors jumped so quickly to philanthropic and government remedies before assessing the sort of market-based scenarios advanced by CUNY and others.

    Most of the discussion has taken the form of criticism, much of it biting, but all of it reflects the sort of journalism essential to our future: collaborative pursuit of what really matters.

    Some of the Next Step collaboration I found especially useful from the four responders:

    • Questions raised by Jan Schaffer’s Laurels and Darts assessment of the report, including these: Instead of looking for ways to pay for what we’ve always done, “how do we provide something worth paying for?” And: “What if the something-for-everyone, grocery-store model of newspapers no longer meets consumers’ needs?” A Next Step question from there: What might community life be like without the kind of common document that newspapers have provided for so long?

    • The scenario sketched by Paul Starr: “Even with additional financial support, journalism is likely to become more of a specialized interest, with a narrower reach and little presence in many communities, especially those with low incomes. In this new environment, there is an increased potential for deepening rot at the lower levels of the federal system.” Next question: What would it take to recover journalism’s “broad public reach,” as Starr puts it, in ways that emerging enterprises are not?
    • Martin Langeveld’s specific suggestions, especially the idea of a “Report for America” along the lines of Teach for America. Next question: Why not try this?
    • Alan Rusbridger’s account of his readers succeeding with a form of reporting that his newspaper, The Guardian, could not. He describes the phenomenon as “the mutualization of a newspaper,” explaining: “Our readers have become part of what we do.” Rusbridger’s overall take on the state of journalism today: “There is much to be excited about. But we may all need a little help along the way.” Next question: Where do we take Downie-Schudson from here?

    CORRECTION: An earlier version of this article misidentified the university working on market-based scenarios for supporting journalism. Read more


    Downie, Columbia Study: Government Must Fund Some News

    Longtime Washington Post executive editor Leonard Downie did more than his share of afflicting the comfortable in government with the paper’s ferociously independent reporting of the Walter Reed scandal and a host of other such stories.
    But after a deep dive into problems of the news business in transition and a scrupulous attempt at framing some solutions, Downie and his collaborators and the Columbia Graduate School of Journalism reached a conclusion many will find surprising and controversial: a bright future for news must include some government funding of the enterprise.
    In a lengthy report being released this week, these two sentences stake out the case for federal intervention:
    “The days of a kind of news media paternalism or patronage that produced journalism in the public interest, whether or not it contributed to the bottom line, are largely gone.
    “American society must now take some collective responsibility for supporting independent news reporting in this new environment — as society has, at much greater expense, for public needs like education, health care, scientific advancement and cultural preservation — through varying combinations of philanthropy, subsidy and government policy.”
    Specifically, the report advocates creation of a Fund for Local News on the model of the separate National Endowments for the Arts and Humanities or the National Science Foundation. The money could come from Federal Communications Commission fees on telecom users and Internet service providers, the report suggests.
    Distribution of the money would be modeled on the National Endowment for the Humanities; projects are screened and awarded in open competition by 50 state Humanities Councils. The report doesn’t say how much should be in the kitty, but I’ve heard preliminary discussions in Congressional circles suggesting $500 million a year.
    Nonprofit and commercial ventures on any platform would qualify. The Councils “would fund categories and methods of reporting and ways to support them, rather than individual stories or reporting projects, for durations of several years or more, with periodic progress review.”
    Downie has spent the better part of this year preparing the report with co-author Michael Schudson of Columbia. UPDATE: The report is now available online, although it was not intended to be made public in full until Tuesday. A version of it will also be in the Columbia Journalism Review.
    The paper, titled “The Reconstruction of American Journalism,” does not prescribe a solo federal government rescue. It assigns philanthropy and universities major roles in nurturing news start-ups and argues that well-organized citizen journalism efforts and searchable government information can make up for some of what legacy media has stopped doing.
    It also advocates recognizing news gathering as legitimate activity for a non-profit or low-profit corporation, clearing the way for various forms of hybrid news organizations that could receive tax-free donations. (My colleague Bill Mitchell and I have discussed this option in posts earlier this year).
    Downie and Schudson are also bluntly critical of the Corporation for Public Broadcasting and public radio, saying their efforts need to be “substantially reoriented” to an expanded local news capacity.
    They flatly reject a bailout of newspapers (as has the industry itself). However, they also judge anti-trust exemptions that would allow newspapers to act together to seek payment for digital distribution of content (an idea the Newspaper Association of America has advocated) to be unwise and probably ineffective.
    The first three-quarters of the report offer a familiar but well-done summary of the fading of newspapers and the rise of promising digital alternatives. The report is comprehensive, well-argued, specific and current, all qualities one would expect from Downie.
    Having written more than a few such reports both on the news crisis and on assorted Florida public policy questions, I know that diagnosis is the easier part, a credible prescription lots tougher. Downie and his Columbia sponsors do not cop out.
    That’s not altogether surprising. In the slow-fuse discussion of possible government interventions, both J-School Dean Nicholas Lemann and Columbia President Lee Bollinger (a First Amendment expert) went on the record early saying government assistance should not be ruled out simply because it hasn’t been a tradition here as it is in Europe.
    The fund-for-journalism idea has intrigued me for a while. The National Science Foundation is an especially good model. Like scientific research, public service journalism is a good thing with multiple sources of sponsorship that we don’t have enough of. Government has the resources to help plug the gap if the money flows through the right kind of buffering structure.
    Establishing such a fund also permits changing what kinds of news projects get funded over time or winding down if a transition to vibrant new formats is completed.
    In the end, such a fund may prove a tough sell politically or a flawed concept. But credit to Downie and Columbia for kicking an important public debate up a gear. Read more

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