www.equilibrium-economicum.net

Monthly articles (English and French) on the theme "Querying economic orthodoxy"

No. 41 - May 2009

The Press under pressure

ANGUS SIBLEY

The crisis in journalism has, during the past few months, reached meltdown proportions...there is, however, a striking and somewhar odd fact about this crisis. Newspapers now have more readers than ever. Their content...is more popular than ever - even among (in fact, especially among) young people.

Walter Isaacson (1), former managing editor of TIME and chairman of CNN, Hays Press-Enterprise lecture, University of California, 4 February 2009

The Press is committing suicide by allowing websurfers to read it for free. To survive, it must change its ways.

Good writing for sale, but you can have it for nothing

The Press has a problem. More and more of us are reading it (2), but fewer and fewer of us are buying it. The reason for this is very simple. Most of the content of our newspapers is now available on the Web free of charge.

How have the newspaper publishers allowed themselves to fall into this absurd situation? It is perfectly possible to make people pay for access to material online. Many periodicals, in fact, do so. One of my own essays (3), dating from 1984, is available online at the price of twenty dollars, not a cent of which, I regret to say, accrues to me.

With online access, the status quo is fundamentally faulty. Either access is free, which is ruinous for the publishers; or it is charged for, in a way that is too costly and cumbersome for the readers.

The problem, with most journals that make you pay to read them online, is that they demand a subscription for a longish period. The online subscription price is generally much less, per copy, than the cover price you pay at the newsagent's; after all, online there are no printing, transport or sales costs. But the subscription is usually more than you want to pay to read one issue, or perhaps just a page or two. Not many articles are worth twenty dollars. You cannot subscribe to every newspaper and magazine that you may want to consult from time to time.

Micropayment

What we need is a system that allows you quickly and easily to pay maybe 5 or 10 pence or cents or centimes to read a single article, maybe 20 or 30 for a single entire newspaper. It should not be too difficult. As Walter Isaacson observed, in the speech quoted above, the ideal micropayment system would be so easy to use that you'd hardly think about making an impulse purchase.

Newspaper publishers could already have adopted such systems, had they really wanted to do so. To date, they have chosen otherwise. They seem to have passively accepted the prevalent notion that readers have come to expect online content to be free, so one has no choice but to give them free content. Well, we would soon come to expect free beer, were brewers silly enough to provide it. Why don't newspaper proprietors behave more like brewers?

They behave differently because they know that news websites are good platforms for advertising. Businesses are prepared to pay Rupert Murdoch for advertising space on the sites of The Times and the Sun. So Rupert thinks it worthwhile to let us read The Times, or gape at page 3 of the Sun, without the tedious necessity of forking out a little.

Problems of the status quo

With this business model, there are two big problems. The first is that newspapers, now read largely online, have come to depend more than ever before on advertising revenue, which is unstable. During recessions, it can fall sharply, leaving the publishers badly short of income. This is a major current problem; it has caused many papers to cut back their news-gathering activities, while others have shut down altogether. In America, the Baltimore Sun has just cut its staff of journalists by one third, while the Boston Globe is in danger of closing. More than 50 British local papers closed (4) in the year to January 2009. Most of these were 'free-sheets' (free to readers, financed entirely by advertising), clearly demonstrating the dangers of over-reliance on this source of revenue.

The other problem is that papers that earn the bulk of their income from advertisers, rather than from readers, are likely to put the interests of their advertisers first and those of their readers second. This is hardly likely to give us papers that provide well researched news on a full range of important and interesting topics. Some of these attract advertising, others do not. It all depends upon whether or not there is a big consumer market relating to a particular topic.

A paper that publishes lots of articles on motoring, home improvement, gardening, or countries which many tourists visit, will attract advertisers because there are plenty of consumer goods and services linked to these topics. But there is no market at present for holiday travel to Afghanistan or for not yet fully developed products of advanced scientific research. So, papers that depend too heavily on advertising lack the incentive to provide good reporting and comment on such non-commercial themes.

The need for profits

Newpapers, like other businesses, ought to make adequate profits. It is true that some papers have survived for years while making trivial profits, or even serious losses. They have been subsidised by wealthy proprietors who are prepared to keep them going as a means of satisfying their vanity, exerting political influence, or propagating their own personal views. But these are not the best motives for providing a service of high-quality, unbiased information and comment. At its worst, this situation is just another example of society being pushed around by plutocrats.

Other proprietors have kept newspapers profitable by slashing their costs and thus degrading their quality. Such a strategy is likely to prejudice their future, but that is not inevitable; in every trade there is a market for cheap rubbish. However, lowering the standards of the Press is certainly not in the wider public interest. There is a real need for good journalism; it is one of the mainstays of democracy.

Today many newspapers, including some of the world's leading titles, are in dire straits because, despite public demand for their content, they have failed to find a way of persuading the Web-using public to pay for it. Yet good may come out of this seemingly desperate situation. Logically, it should force the publishers to do what is necessary to fill the payments gap. If they can find a practical way to ensure that internauts make quick, painlessly small payments for each item they want to read, then good newspapers may once again become financially viable concerns with healthy prospects.

* * * * *

References

1 Walter Isaacson is currently president and chief executive officer of the Aspen Institute, a nonpartisan educational and policy studies organisation based in Washington, DC. His excellent lecture is accessible at http://www.aspeninstitute.org/about/about-walter-isaacson/articles-walter-isaacson/hays. It is dated there 2008, but this is an error; it should be 2009.

2 For example, the French EPIQ survey for 2008 (data courtesy of Audipresse) shows that the average total readership of French national dailies (excluding freesheets) was 8.85 million, as against 8.17 million in 2007: an increase of 8.3%. Le Monde is shown as having a readership of 1.88 million, though its print run is only around 350,000 copies.

3 Angus Sibley, Nationalism: Anarchy and Idolatry, published in International Relations (David Davies Memorial Institute of International Studies, London, May 1984); see http://ire.sagepub.com/cgi/reprint/8/1/81

4 See list compiled by Roy Greenslade on
http://www.guardian.co.uk/media/greenslade/2009/feb/19/local-newspapers-newspapers