FTC Staff Discussion Draft on Saving Journalism – Bravo Performance

The Federal Trade Commission Staff recently released a discussion draft titled “Potential Policy recommendations to Support the Reinvention of Journalism”; a draft that was pilloried in blogs far and wide in a disappointing performance that seemed to completely overlook words like “discussion draft” and “possible” and jump directly to fear and loathing of even discussing policies that could benefit traditional investigative jounalism at the expense of aggregators and rebroadcaster's like, errr, most of the blogs that were whining.  In addition to earning penalty points for narrow minded self interest and premature whining, many of the blogs were so busy griping about new taxes and IP rights that they missed the biggest problem.  Some of the possible policies would seem to allow government financial support for journalistic operations that support specific political parties or candidates.  More on this below, but even I do not want to spend time considering a policy  that allows politicians to decide which journalists to support, and then let's those journalists decide which politicians the media will support – sounds like incumbency for life to me.  Concerns over  a new American royalty aside, the goal of the FTC staff was to get people to recognize that journalism is in jeopardy and start thinking seriously about a very broad range of possible responses.  The discussion draft does exactly that.

Enough about the bloggers performance already, what did the FTC staff say.  First, journalism is in a death spiral, ad revenues keep shrinking leading to staff cuts and less real reporting.  Experiments with use of the Internet and new types of news organizations are  ongoing, but have produced no sustainable business model as yet (not even Patch?).  As the Staff puts it,  “news is a “public good” in economic terms. That is, it is non-rivalrous (one person’s consumption of the news does not preclude another person’s consumption of the same news) and non-excludable (once the news producer supplies anyone, it cannot exclude anyone). Because free riding is usually easy in these circumstances, it is often difficult to ensure that producers of public goods are appropriately compensated. “  Second, should we “wait and see” how the experiments turn out, or do something about that death spiral now, and what actions should we consider.

Start with getting journalists some revenue by changing the law, beginning with intellectual property law.  Should the “fair use” exception to copyright be limited so that a search engine or news digest can't pick up the lead of a story without paying a royalty?  What about copyright protection for “hot news”, the facts first aired in a news story and not just the specific means by which those facts are expressed.  What about a news licensing system similar to that employed by the music industry to compensate performances?

Next, consider antitrust changes that: 1) Allow news organizations to agree jointly to erect pay walls so that consumers must pay for access to online content; and 2) Allow news organizations to agree jointly on a mechanism to require news aggregators and others to pay for the use of online content, perhaps through the use of copyright licenses.  These could have the most effective performance in combination with one or two of the IP changes discussed above.

Tomorrow we move on to tax changes, direct government support and my favorite, a look at journalism as a non-profit.

Photo Credit: Yan Arief