New ‘Welfare’ Law Could Kill This Industry

Newspapers are dying and have been for the last 25 years or so. Their cause(s) of death are many and multiplying. But a major culprit is the internet, which ripped the business models of press barons to shreds and exposed the papers for what they were: sclerotic, would-be monopolists whose lock on local advertising fed both their bottom lines and the arrogance.

But the cash-starved husks of several newspaper chains refuse to formally die and go away. Instead, they are making last ditch efforts to get government to rescue them. And the primary means of doing that is for governments to pass laws requiring tech companies (a favorite bogeyman of failed business and blinkered politicians everywhere) to pay them (handsomely) for the privilege of linking to their reporting.

Major efforts are underway to create a media welfare program in Congress, and some states. As Prof. Jeff Jarvis writes, these efforts are the latest chapter in newspapers' long war against any and all competitors. But they also seek to cure one perceived problem with solutions that makes matters much worse for everyone (except newspapers). And at bottom, none of the proposed welfare programs address a fundamental issue about newspapers and (potential) news readers:

In its annual worldwide survey, the Reuters Institute for the Study of Journalism at Oxford found that 42% of Americans now sometimes or often avoid the news; only a third trust most news most of the time; and the proportion of those very or extremely interested in news has dropped 18%, from 67% to 49% since 2015. The numbers reflect an ideological divide: 22% of those on the left avoid social justice news vs. 70% on the right; for climate news it is 12% on the left vs. 64% on the right. Avoidance of local news in the U.S. is lower than other categories — 7% on the left vs. 14% on the right — but note that is still twice as high on the right. Trust in news overall stands at only 32%, flat since 2015 (versus, for example, 69% in Finland and 57% in the Netherlands). Only 21% of Americans pay for news, even though most newspaper sites have erected paywalls.

There is precious little self-reflection in journalism about news avoidance and lack of trust and willingness to pay, and not much more self-examination in publishers' suites about their role in the loss of advertising customers. Neither blaming others for their failures nor seeking protectionism are strategies for the future.

Yet that's the path newspapers have chosen…because self-reflection is much more difficult than mau-mauing state legislators into erecting a welfare system that benefits the very few (and very privileged) at taxpayers' expense.

Jarvis also notes that the California proposal would not benefit small or new news outlets. Only the big outlets (many owned by hedge funds) would truly reap the benefits of the new cartel.

Which is both appalling and revealing. Setting aside whether a particular newspaper is a left-wing rag and a right-wing screed, all of them are businesses looking for a financial lifeline (now that the cash cows in the local ad market have bolted for more responsive, more affordable, and more measurable pastures).

Don't weep for the newspapers looking for state handouts. They milked their local markets for decades, and fought new technologies and means of delivering the news with everything they could muster. Their bills for their decades of indifference, arrogance, and stupidity are coming due. Time for them to settle up.

The opinions expressed in this article are those of the author and do not necessarily reflect the positions of American Liberty News.

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