An article over the weekend deserves more than passing mention because of what it says about the future of daily journalism.
The New York Times reported that it and many other prominent mainstream media companies were planning to seek from Congress an anti-trust exemption that would allow them to negotiate as a group for better advertising terms with Facebook and Google.
The move by the publishers could be fairly interpreted as a prudent business decision in light of the fact that Facebook and Google increasingly dictate the terms of advertising on their Internet platforms. Individual publishers, including the Times, say that they simply can’t generate the ad revenue they so desperately need on their own against the combined power of Facebook and Google. It is no comfort to them that the two internet giants have offered their help in creating new revenue streams for news operations, not much of which has taken off as yet.
There is, in the idea of an anti-trust exemption, more than a whiff of desperation, and here’s why: it is common knowledge that print newspaper advertising and circulation have been declining for decades for any number of reasons. Remember want ads? Coupon inserts? The response by publishers to this downward trend has been to shift assets to online digital versions of their paper product. As newsrooms are emptied and print editions cut back or eliminated, the thinking went, consumers (who were already switching to online) would be happy — indeed, enthusiastic — to subscribe to their favorite newspaper’s digital edition. So, too, would advertisers, who saw in online a great new market for consumer-directed ad spots based upon reams of user data.
Unfortunately for the publishers, this hasn’t worked out to the extent they projected. Digital ad revenue has increased for the Times’s website (along with subscription income), as it has for the Washington Post, the Wall Street Journal and other national and regional papers. However, it hasn’t been enough, and that, the publishers acknowledge, is because advertisers are placing more of their marketing dollars where there are the most “eyes”: Facebook and Google.
The proposal to obtain the anti-trust exemption is a gambit intended to give news publishers sufficient combined power to create competition for the two internet supernovas. There is a second and highly persuasive reason the publishers want to act in concert: their content is already widely available online without consumers paying for it. Through re-tweets, news aggregator websites and people sharing links to presumably proprietary news articles, enterprise articles are accessible all over the internet, especially via — you guessed it — Facebook and Google.
In sum, news publishers are seeking relief from two highly damaging trends impacting their survivability: the slip in ad revenue and the loss of proprietary exclusivity. Needless to say, these are not salutary developments.
Will the publishers’ proposal succeed? Right now, that’s highly debatable. Congress is controlled by Republicans, who are no friends of the news media, by and large (although publishers themselves are most often rock-ribbed Republicans). Asking for an anti-trust exemption also would be a long and possibly contentious prospect.
What about consumers? What voice do they have in this matter? The answer is fraught with uncertainty. The recent controversy over net neutrality offers little comfort. On the one hand, consumers reacted loudly and effectively when the FCC proposed, a couple of years ago, to divvy up internet access by allowing companies to purchase content pipelines. On the other, although the proposal was defeated, a new FCC is already working on a plan that would give businesses the ability to deliver content access — for a price. That outcome may have dampened interest in mounting a similar campaign to enable publishers to negotiate as a group for better ad deals.
The inescapable bottom line in all this is that daily journalism in the United States is in deep financial trouble. The digital realm has completely disrupted the marketplace for content delivery, but nothing publishers have tried so far to remain competitive has worked, or worked very well. If the publishers pursue the anti-trust exemption, one thing’s for sure: you can expect a great deal of antagonistic outcry from enemies of the news media, who are, it is fair to state, plentiful and vociferous.
As this situation unfolds, it is our society that has most at stake in the outcome. While it is fashionable in some circles these days to disdainfully assert that we don’t really need an independent press poking around and publishing “fake news,” the inescapable truth is that without a functioning, robust fourth estate, our hold on representative government becomes increasingly tenuous. That would be a national tragedy of existential proportions.
