Years ending in the number 8 have an unusually high record of being historic pivots: think 1918, 1948, and 1968. Unquestionably, 2008 was a turning point in politics, the economy, and what for generations we have called the press. This was the year when the printed media crashed with a sudden velocity and with consequences that are irreversible. (As of Monday, the iconic Tribune Company is in bankruptcy.) So the big question as we approach the New Year is how to manage what happens now. Given that it was the Internet that has brought about the transformation of our information culture, then corralling the Web is job one, two, and three.
Because the pace of change has been so hectic, surprisingly little time has been spent looking at the last great upheavals: the advent of instant transmission by wire, Telex, and telephone, followed in mid-twentieth century by television. What all these inventions did very quickly was create opportunities for distribution of news and, significantly, the advertising that paid for it. Especially in the case of television’s entrance, it was pretty much assured at the time that movie theaters and radio would eventually lose a meaningful role in culture and commerce. That didn’t happen. As for the transmission of information in general, it benefited from faster delivery, with more exciting graphics, which made media into a much bigger business overall.
As a society, we’ve got to figure out how news gathering and information distribution will be paid for from now on.
Setting aside what the Internet represents in breadth and diversity of communication, it turns out that the most significant factor for news is that it has destroyed the traditional way of supporting it: subscriptions, single-copy sales, and direct advertising. Broadcast television had evolved mainly from existing equipment manufacturers and radio networks. CBS, NBC, and eventually ABC managed to adapt from radio to the new media. RCA, Philco, and the other appliance brands of the early years successfully reengineered their businesses from radios to televisions until, for a variety of reasons, they lost out to Japan and other emerging nations. And along the way, just about everyone made money.
What has happened with the Internet so far is that the suppliers of hardware, software, and transmission (search engines and aggregators) have built business models that effectively shut out revenue streams for the creators of the information that is being delivered. What has become absolutely clear in 2008 is that this new model for delivering information is a debilitating blow to the creation of quality news content. The companies making money from the Internet—Google, Yahoo, Microsoft, Amazon, and so on—are entitled to the riches they’ve amassed from their ingenuity and entrepreneurial skill. But as a society, we’ve got to figure out how news gathering and information distribution will be paid for from now on.
All around the country there are stirrings of innovation. Some of the new outfits are already celebrated for their success and are receiving private equity or major philanthropic backing. On that list are the Huffington Post, Politico, and ProPublica. Every time the roster appears, there are new additions, most recently The Daily Beast and the Washington Post’s extension of Slate to Root and Big Money. As the Silicon Valley experience of the 1980s and 1990s demonstrated, out of all these start-ups, a few entities will flourish. Most will disappear. The New York Times recently did a front-page story highlighting some local entries in San Diego and Minneapolis intended to provide the kind of “accountability” coverage of their areas that metropolitan newspapers are unable to do as their revenues shrink. These are still mainly shoestring operations. My favorite insight in the piece came from Buzz Woolley, described as a “semi-retired local businessman” in San Diego who became the first chief executive and financial backer of VoiceofSanDiego, a nonprofit content provider that is one of the most enterprising of these new digital sites. According to the Times, the budget for VoiceofSanDiego comes from a mix of donors and the beginnings of advertising. “Information is now a public service as much as it’s a commodity,” Woolley said. “It should be thought of the same way as education, health care. It’s one of the things you need to operate a civil society and the market isn’t doing it very well.”
So here, in the briefest of summaries, are avenues for innovation:
1. Reestablish the principle that news has to be paid for by someone: the consumer, the advertiser, or the distributor. (See the Platform for November 3, 2008: “ Make Google Pay.”)
2. Private equity investment in new brands or renewed confidence in such stalwarts as the New York Times and the Washington Post, which are hurting badly but would revive if they can make money from others (for example, search engines) through fees for their content.
3. Accept the role of news as a public service to be supported by the community through public funds, membership, and sponsorship of various kinds. This is, of course, the model that has been in place for decades at public radio and PBS.
Thomas C. Rubin, chief counsel for intellectual property strategy at Microsoft, recently gave a thoughtful speech to the U.K. Association of Online Publishers, making many of the points reflected above. As precedents for the news business to consider, he cites the challenges to Napster’s effort to make music free, which fell apart when it was found liable for copyright infringement. Music again became a saleable commodity with the advent of iTunes. Next came YouTube, which was helping itself to content—until it was sued for a billion dollars by Viacom. Now Hulu is gaining traction by selling the same sort of material. Why can’t the news business challenge free use of copyrighted material? It can, and almost certainly should.
The financial model for gathering news can definitely be revived. No one disputes how bad things have gotten. So the only way forward is to focus on solutions. Innovation, please.
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Peter Osnos is a senior fellow for media at The Century Foundation, where he writes the weekly Platform column. Osnos is the Founder and Editor-at-Large of PublicAffairs Books. He is Vice-Chair of the Columbia Journalism Review, a former publisher at Random House Inc. and was a correspondent and editor at The Washington Post. Visit TCF.org for a full archive of Platform columns.