The FTC probably isn’t going to save journalism, you won’t be shocked to hear.
The agency recently dropped a set of potential policy recommendations resulting from its yearlong investigation into the news business’ commercial woes. It’s a 47-page (with footnotes) round-up of the problems facing news organizations with some surface-level thinking on how to remedy them.
To anyone who’s been paying attention to the news business over the past several years, it’s a work of extreme intellectual myopia. To put it in sports terms (You’re welcome!), it’s a playbook that has only defensive schemes: government subsidies, contracting the scope of fair-use provisions of copyright law, taxes, legalized price-fixing and collusion, “hot news” protections. It’s entirely free of any solutions that foster innovation or entrepreneurialism. It is, to be completely clear, a complete mess.
Nevertheless, journalism does need to be reinvented. To help re-frame the issues, I’ve provided a few recommendations of my own.
1. Stop pretending that newspapers equal journalism.
Throughout the findings newspapers and journalism are used pretty much interchangeably. Newspapers, you would think from reading the report, are the be-all and end-all of newsgathering and their business model needs to be preserved at all costs. Online news sources, on the other hand, are dismissed thusly: “virtually no sites have yet found a sustainable business model that would allow them to survive without some form of funding from non-profit sources.” Um, I guess that’s true unless you think of companies like Gawker Media, Salon, Drudge, Huffington Post and so on. While none of these have models that you’d describe as unimpeachable and while they do, often quite pleasantly, trouble traditional definition of “journalism,” they can’t be ignored. Each has broken news — in some case’s news of the highest order — and thus participates in journalism.
2. Cool down about the “hot news” protections.
“Hot news” would essentially extend copyright protection to the reporting of facts for a certain time. It’s a nice idea that would seem to be completely unenforceable, if not a straight-up violation of the First Amendment. I can see the attraction to protecting meaningful news breaks. But let’s be really honest. A not-so-small portion of newsgathering, even at our most august institutions, is about negotiating a press release from a PR flack a few minutes before your competitor gets it. Is that behavior we really need to protect? And how does social media fit it into this? Will random Twitterers who retweet news breaks suddenly be the subject of litigation because they don’t comply with some “hot news” time frame?
3. Aggregators and search engines aren’t the enemy.
There’s a profoundly misguided notion of search engines as parasites sucking the news media dry of its life energy. Parasites take without giving. Search engines give in the form organizing information in a way that jibes with how people actually look for it. Could there be better revenue-sharing models? Of course, but this isn’t something regulators to handle.
On the matter of aggregators, I offer this. NEWSPAPERS AGGREGATE TOO!!! Many newspapers having growing blog arms set up to just this. And not only do they aggregate, they regularly rewrite scoops without any acknowledgment of the original source. Just try to get credit from a national news outlet, if you’re trade, blogger, or at a small newspaper. Of course, there’s no mention of this in the report.
4. Stop defending crumbling legacy business models and support innovation.
For decades, newspapers were fat, happy, and lazy. Their failure to get serious about the web is unforgivable and now they find themselves getting outflanked by search engines, social media and bloggers and, frankly, it’s difficult to feel sorry for them. Moreover, all of the regulatory-oriented “solutions” do nothing to unearth revenue streams. Choking off aggregators would do little to change basic economic problem of content today: its unlimited supply.
5. Cut the crap about bailouts.
Newspapers aren’t airlines. Many of them make money. Lots of of it. The media economist Robert Picard sums it up nicely in his savaging of the FTC’s policy recommendations:
The FTC’s staff ignores the fact that most newspapers are profitable (the average operating profit in 2009 was 12%), but that their corporate parents are unprofitable because of high overhead costs and ill-advised debt loads taken on when advertising revenues were peaked at all time highs. It also fails to make adequate distinction between longer term trends affecting newspapers and the effects of the current recession. The staff thus blends the two together to give a skewed picture of the mid- to long-term health of the industry.
Newspapers—I mean, journalism—doesn’t need a rescue. It needs ideas. And if the FTC is going to play, it should trash this “discussion draft” and find some new talking points.
(For some further reading, check out the Washington Times‘ pillorying of the so-called “Drudge Tax.” And, more recently, here’s The New York Times’ critical assessment. )
UPDATE: An public affairs official from the FTC wrote in to remind me that no recommendations have been made at this point. “The FTC has not made any recommendations or proposals. The discussion paper is a compilation of ideas that the staff of the FTC gathered from outside the agency during workshops it has held since last year for purposes of discussion and debate. It’s good to see debate of these issues, but we would prefer that you clarify that we have not supported or endorsed anything. The agency is hoping to produce a report this fall outlining what it’s learned, which may or may not include any policy recommendations.”
