Newspapers would be in trouble either way. The steady leak of advertising and readers from print to the Web has become a widening torrent in this recession year. Most newspapers remain profitable, but the margins are dropping fast, with the industry losing about 15 percent of its ad revenue this year.
The Miami Herald Is Said To Be For Sale
The McClatchy Company, burdened by debt and a steep slide in newspaper advertising, wants to sell one of its most-prized properties, The Miami Herald, according to people briefed on the company's plans.
The Rocky Mountain News Is Put Up for Sale After Losing $11 Million in 9 Months
The E. W. Scripps Company announced Thursday that it was selling the money-losing Rocky Mountain News, its largest newspaper.
That Ann Coulter is thrilled should be a clue that this isn't actually good news, however much magnates like Sam Zell deserve it:
If I understand this correctly, Sam Zell basically bought his newspaper empire by pretending the employees were actually the owners and then borrowing lots of money in their name, paying it back by deducting from payroll.
Journalists Falling, and They're Not Getting Up
I have little doubt Matt and Atrios are right that many of the wealthy families that have been running newspapers have been corrupt or incompetent. Anyone who watched the saga of Conrad Black has seen this. I don't care about newspapers per se, but to ensure there are enough full time primary-source journalists gathering news. In particular, professional investigative journalists with the budgets needed to do that work well. As it stands, nothing else supports these things nearly so well as newspapers (as presently constructed).
I don't believe there's room to be sanguine about this. Local news gathering is fairly difficult to do profitably. Meanwhile investigative journalism is even worse off. It's hard to profit from information which is only valuable if it is widely broadcast. Good for winning awards, but Pulitzers don't show up on the balance sheet in the quarterly reports to shareholders. The market will not provide these things in anywhere near the quantities required absent some external driving factor. Thus, as the post is titled, journalism is a market failure.
The thinking that assumes "something" will come along to fill this void is probably a product of the era we have lived in, where local and investigative journalism has been quite common and reasonably effective. However I don't think that is actually the norm. The norm in history is not to have these things, so once they are lost, they will be difficult to recover. After all, newsrooms have been shrinking for quite some time. Despite this contraction, nothing really has come along to fill the void, despite the rise of new media.
New Media and Journalism
Perhaps the most obvious example here is TalkingPointMemo. TPM produces reputable political journalism, and even some amount of investigative journalism (mostly by poring through reams of documents rather than classic gumshoe dirt-digging). This is all great, but TPM is the individual success that proves the systemic failure. TPM's scope is national, and even then it is a business model that can only sustain a handful of full time staff. If the New York Times goes bankrupt, neither TPM nor anything like it is going to fill that void, and be able to employ the people needed to run a "paper of record." If a country the size of the US only has an internet market large enough to sustain a few web-only investigative outfits like TPM employing a few dozen reporters, how could the model work in any smaller market? Could TPM's model be workable even for a large state like California or New York?
Similarly, local journalism does not appear to be very viable on an internet-advertising revenue stream. The US has a handful of profitable web publications and blogs, but they are national in scope. Local blogs like Raising Kaine in Virginia can have an impact, but simply can't attract enough readers to be sustainable business models.
One of Josh's alumni, Paul Kiel, is involved in the non-profit journalism venture ProPublica, which says of itself:
Investigative journalism is at risk. Many news organizations have increasingly come to see it as a luxury. Today's investigative reporters lack resources: Time and budget constraints are curbing the ability of journalists not specifically designated "investigative" to do this kind of reporting in addition to their regular beats. This is therefore a moment when new models are necessary to carry forward some of the great work of journalism in the public interest that is such an integral part of self-government, and thus an important bulwark of our democracy.
The business crisis in publishing and - not unrelated - the revolution in publishing technology are having a number of wide-ranging effects. Among these are that the creation of original journalism in the public interest, and particularly the form that has come to be known as "investigative reporting," is being squeezed down, and in some cases out.
ProPublica is trying to remedy that somewhat. But what of their own revenue stream?
The Sandler Foundation has made a major, multi-year commitment to fund ProPublica. Other philanthropic contributions have been received as well, and more are welcomed.
It is hoped that, over time, once stories begin to be published, and a "brand" built, other sources of sustainable funding, including possibly from readers, viewers and users, can be developed. The non-profit form, of course, meaningfully reduces the necessary revenue for sustainability.
The portends here are not great. Investigative journalism may become the province of philanthropy. If that is the case, we better start facing the music and not waiting for the market fairy to rescue a core societal oversight function. The media is often called the fourth estate, and as the reference to the three estates of pre-revolution France implies, it has a role as a pillar of society, almost governmental in itself. If the market doesn't provide it, other ways must be found.