Belmont Club

"Save the newspapers"

From hard market conditions by allowing them to corner the print market. SF Gate reports that Speaker Pelosi is asking the Justice department to take a broader view of anti-competitive activity:

House Speaker Nancy Pelosi, worried about the fate of The Chronicle and other financially struggling newspapers, urged the Justice Department Monday to consider giving Bay Area papers more leeway to merge or consolidate business operations to stay afloat.

In a letter to Attorney General Eric Holder, released by Pelosi’s office late Monday, the San Francisco Democrat asked the department to weigh the public benefit of saving The Chronicle and other papers from closure against the agency’s antitrust mission to guard against anti-competitive behavior.

“We must ensure that our policies enable our news organizations to survive and to engage in the news gathering and analysis that the American people expect,” Pelosi wrote.

The owners of The Chronicle had said that increased competition and tough economic times would force the newspaper to close unless they could cut costs. It warned that its unionized workers would have to accept deep cuts and layoffs if the paper was to survive. The other option, apparently, was for the newspaper to tie up with other media companies in ways that might initiate anti-trust proceedings, unless Pelosi could convince Justice to see things differently.

In the carefully worded letter, Pelosi urged the Justice Department to take a broader view of media competition in the Bay Area. Rather than seeing The Chronicle’s main competitors as other newspapers, she urged the department to consider television and Internet media sources and online advertising outlets as competitors as part of any future antitrust review.

A more expansive view of competition could smooth the way for future discussions of a merger or a consolidation of advertising, distribution and other business operations between The Chronicle and the Bay Area News Group, which owns the San Jose Mercury News, the Contra Costa Times and the Oakland Tribune. Hearst has a nearly one-third stake in the non-Bay Area papers of MediaNews, the Denver chain that owns the Bay Area News Group.

The idea of a granting anti-trust exemption to newspapers has been kicking around for some time. David Carr in the New York Times has advocated the repeal of the Newspaper Preservation Act. “Regulatory reform will allow the industry to consolidate to an economically feasible model and preserve newsgathering. Does Seattle need two newspapers? Did Denver? Sure, it’s preferable for all kinds of reasons. But one is better than none” Some might argue that this amounts to creating monopolies in places where the barriers to entry (in terms of plant and distribution) are high so that the print media eventually becomes a kind of liberal ghetto. But even the repeal of anti-trust regulations won’t fix what Carr calls the “original sin” of the Internet. Distributing news for free without paying the “newsgatherers” what they believe is their due.

No more free content. The Web has become the primary delivery mechanism for quality newsrooms across the country, and consumers will have to participate in financing the newsgathering process if it is to continue. Setting the price point at free — the newspaper analyst Alan D. Mutter called it the “original sin” — has brought the industry millions of eyeballs and a return that doesn’t cover the coffee budget of some newsrooms. …

No more free ride to aggregators. Google announced that it would begin selling ads against Google News, with almost no financial accommodation to the organizations that generate that news. The book industry — of all Luddites — has extracted cash from Google, as did the wire services. Google, The Huffington Post and Newser have built their audiences and brands on other people’s labors.

Most aggregators are not promoting newspaper content; they are repurposing it to their own ends. Newspapers’ audiences are harvested and sold divorced from the content that attracted them in the first place.

That original sin bankrupted the traditional papers, which in turn made it impossible for them to support traditional reporting and editing. The public interest argument, then, really amounts to the compelling need to keep the “newsgatherers” in business because it is an irreplaceable thing. Under this logic, the electronic broadcast networks and the print monoplies must be preserved because they and they alone (or primarily) supply the real news. The Internet is just a repackager. But the problem with this argument is the supposition that the Internet, left to its own devices, won’t ever find a way to supply the demand for real news through another business model. There is no logical reason why only the networks and the newspapers can be real newsgatherers. Among trade publications (and this happens with financial newsletters) people are willing to pay for information that isn’t put in the public domain in real time. If there’s a demand, you can charge for it. It may be argued that the real barriers to generating original news on the Internet are architectural: that we haven’t created the framework to gather, assess and remunerate original information gathering over the network. But in time, there’s no reason why a distributed network of journalists, using laptops or cell phones can’t provide a stream of facts that can be editorially processed in some way. No technical reason why, anyway.

I think that there will always be a market for traditional reporting. Distributed reporters can never replace an area specialist, or someone with a broad knowledge and good language skills for example. But the market for traditional reporting will probably become very competitive, and not all the mergers and combinations can preserve it at anything near its present size.  But while traditional reporting will survive in some form, it will probably be complemented by structures that don’t exist today. My own guess is that while Pelosi may get Holder to let the Chronicle set up its Bay Area monopoly, for political and ideological reasons if nothing else, in the long run the solution to the newspaper crisis lies elsewhere. In news systems and industries. The old ways are over. If people can accept that about parts of the financial system, why not the newspapers? And many of them shoveled themselves into the grave, little guessing the world had changed around them. As Gerard Vanderleun put it:

What we will never hear is that their editorial policies and news slanting were part and parcel of their demise. We will never hear about the willed insults, slights, and snubbing of fully half of their potential circulation pool. Journalists and editors write a lot about “taking personal responsibility” when it comes to others. You never hear them write that about themselves. There’s no mea culpa among liberal newspaper journalists these days. There’s only “The Internet ate my newspaper.”

Maybe that’s not something the Chronicle would write about itself.