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FOR IMMEDIATE RELEASE
April 21, 2009
1:59 PM

CONTACT: Free Press

Josh Stearns, 413-585-1533 x204

Free Press Calls for National Journalism Strategy at House Hearing

WASHINGTON - April 21 - Free Press Policy Director Ben Scott will call for a national journalism strategy to address the problems in the newspaper industry and promote a vibrant news marketplace today at a hearing before the House Subcommittee on Courts and Competition Policy.

A live webcast of the hearing will be available at http://judiciary.house.gov/hearings/caltoday.html

The 2 p.m. hearing, titled "A New Age for Newspapers: Diversity of Voices, Competition and the Internet," will focus on policy solutions for tackling the economic crisis in the newspaper business. This crisis is rooted in the collapse and near-demise of some daily newspapers, the shift of audiences to the Internet, and the decline in circulation and advertising revenue.

Scott will argue that a comprehensive policy approach is needed to save newsrooms -- a critical watchdog for democracy -- and advance new business models for journalism.

Prepared testimony of Ben Scott, policy director of Free Press

As the largest public interest organization in the country working on media policy issues, Free Press has a strong interest in the future of journalism and the vibrancy of the news marketplace.

The crisis in the newspaper business is often portrayed as if it were monolithic -- a common disease that is affecting all newspapers alike. But this is not the case. There are several major problems hitting different parts of the news industry in different ways.

One is the debt load carried by many large newspaper companies that pushes them toward bankruptcy. A more general problem is a decline in print circulation and advertising revenue as readers shift to the Internet. That technological shift reflects a demographic change in news readers as well as the availability of competing sources of national and international news online.

Some newspaper companies have made things worse and accelerated their own demise. Throughout the past 15 years, major newspaper companies have pursued business models of consolidation. The short-term benefit of mergers is an increase in revenue and market share. The long-term consequence is a mounting debt load that now threatens to sink the ship. Revenue declines and shareholder demands force budget cuts. Budget cuts force layoffs. Layoffs mean fewer journalists and fewer stories, and a lower quality product.

But that does not necessarily mean that the core business of news production is not profitable. In many instances, papers that are nearing bankruptcy actually have profitable newsrooms -- complete with double-digit margins and executive bonuses.

The demand for text-based news is at an all-time high -- the readers simply cannot be monetized at the same rate as in the past. That is the most fundamental problem. The historical alignment of technology, market demand, and public goods that made monopoly newspapers a revenue engine for decades is coming to an end.

But the outlook is not all dark. There are new journalism experiments cropping up all over the Internet. However, none has a clear financial base to scale up to replace the quantity and scope of news production that is disappearing around them -- even in combination.

So we're left with a conundrum. As advertising revenues dry up as news shifts online, will the remaining base of advertising dollars be sufficient to cover the costs of producing and distributing the journalism a democratic society needs to effectively self-govern? If it won't, that is the problem policymakers must solve.

The decline of print newspapers doesn't mean the decline of journalism. What we need to have for journalism is journalists -- and lots of them. The risk we face today is that market failure will result in the dissipation of tens of thousands of highly trained and experienced reporters into other sectors of the economy.

Combining the best elements of traditional and new media forms, we need to create and sustain models of news production in which it is possible to earn a living writing the news. These new institutions of journalism need to have the resources to cover expensive beats like international affairs and investigative reporting as well as the essential news about the workings of local government.

We also have to recognize that the Internet can't solve all of journalism's problems because more than a third of the country is not connected to high-speed Internet today. Solutions that rely on technology will also have to deal with the digital divide.

Quite rightly, people are alarmed when they hear that the daily newspaper in their city is about to stop publishing.

But we should avoid the temptation to turn to policies that resemble bailouts. We should not relax the antitrust standards to permit further consolidation. The most consolidated newspaper companies are among those in the worst financial shape today.

Permitting further mergers won't solve the problem. Indeed, uniting two failing business models will not produce a success any more than tying together two rocks will suddenly make them float.

While expanding scale might pay short-term dividends, in the long run it will deepen debt, shed jobs, and reduce the amount of original reporting in our communities.

This is exactly the opposite of what we should be doing.

There are no easy answers to any of these problems. The right approach is measured and inclusive deliberation on as rapid a timeline as practical. Just as we have created national strategies to address crises in health care, energy independence, and education -- it is time to craft a national journalism strategy to get out ahead of this problem and take advantage of the opportunities it creates.

It will begin by documenting how and why permitting institutional journalism to fade away and journalists to change professions is the wrong path for democracy. It will begin by showing why the Internet is a powerful force for positive change but not a substitute for everything of value that has come before. And it will begin when we recognize that the future of journalism is a policy issue.

Policymakers should seek to join the discussion already happening in the academy, among foundations, and in the media. The answer is certainly not to relax antitrust standards and double-down on the bad decisions of the past. The most likely answer -- based on the evidence available today -- is that there will be many, many answers. And that's good news.

The full written testimony is available at http://www.freepress.net/files/Ben_Scott_Testimony_4_21_09.pdf

 

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Free Press is a national, nonpartisan organization working to reform the media. Through education, organizing and advocacy, we promote diverse and independent media ownership, strong public media, and universal access to communications. Learn more at www.freepress.net



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