Free Press Calls for National Journalism Strategy at House Hearing

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 https://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 https://www.freepress.net/files/Ben_Scott_Testimony_4_21_09.pdf