No! to newspaper bailouts

A. Michael Noll is Professor Emeritus of Communications and former dean at the Annenberg School for Communication and Journalism at the University of Southern California. He writes in response to American government: It’s always subsidized commercial media.

There will always be a need for the reporting of current events, but because of the Internet, journalism is undergoing revolutionary change in terms of how news is distributed and accessed. Conventional newspapers are thus in crisis, and there are some who propose a Federal bailout. No way!

Back in the 1980s, a couple of newspapers investigated the prospects for electronic information through a service known as videotex.1 I was involved while working at AT&T with the planning of a trial of videotex jointly conducted by AT&T and Knight-Ridder Newspapers in Florida. AT&T and Knight-Ridder correctly saw the coming of a day when news and information would be accessed and obtained electronically over telecommunication. However, the use of the home TV set for display and the concept of a single large centralized database of information were all wrong – and videotex ultimately failed.2

After the failure of videotex, newspapers became smug and mostly ignored the coming of the Internet. They did not seem to realize that although much of their profits came from classified ads, this was exactly the kind of information that could best be obtained on-line over the Internet. When they finally woke up, it was too late.

Newspapers also seemed unable to determine how to charge for on-line access. Thus many newspapers offer today’s news for free over the Internet, but charge for past articles – thus implying that they place no real value on today’s edition.

Access of music over the Internet – such as the Apple iTunes store and Amazon – proves that consumers are willing to pay, if access is easy and relatively inexpensive. This model is now being extended to books and magazines, using such products as Amazon’s Kindle and Apple’s iPhone. Will on-line journalism soon follow? Will a new breed of electronic on-line journalism evolve? Will conventional newspapers on paper disappear?

The response of many newspapers to Internet competition has been to fire journalists, reduce the size of the paper, and increase prices. At this rate, they will ultimately be printing one paper at a price of a few $100,000.

Technology is one factor that shapes the future, shaped by the needs of consumers and what makes good economic sense. Old industries evolve, and some which are unable to adapt, die. But Federal bailouts of dying industries only delay the inevitable and impede progress.

1 “A Bell System View of Videotex,” (with Dennis J. Sullivan, Jr.), Telecommunications Policy, Vol. 6, No. 3 (September 1982), pp. 237-241 and “Teletext and Videotex in North America: Service and System Implications,” Telecommunications Policy, Vol. 4, No. 1 (March 1980), pp. 17-24.

2 “Videotex: Anatomy of a Failure,” Information & Management, Vol. 9, No. 2 (September 1985), pp. 99-109.

About A. Michael Noll

A. Michael Noll is Professor Emeritus of Communications and former dean at the Annenberg School for Communication and Journalism at the University of Southern California.


  1. Smug and shallow commentary tossed in from the sidelines simply retards the process of genuine understanding. Media and society in general are undergoing an historic phase transition, a process that is not illuminated by uncritical, categorical characterizations seemingly based on little more than surface understanding and dated reminisces.

  2. Perry Gaskill says:

    Sorry, but I can’t help but wonder if this isn’t more of the process of throwing the baby out with the bathwater. I could be wrong, but it seems to me the prior Cowan and Westphal commentary was simply pointing out that government support of the press via postal rates or legal ads has already set a precedent.

    Those comments are also in reaction to only a small subset of broader suggestions made by Downie and Schudson. That subset, “A national Fund for Local News,” has now somehow spun off to mean a TARP fund for the New York Times. Which, in my own intrepretation, isn’t the point at all.

    In the meantime, if put in context and carried to a logical conclusion, some of the Downie/Schudson suggestions for sane legislation go missing. Including:

    – A clarification of IRS tax rules for low-cost Limited Liability Companies currently in legal limbo.

    – Some kind of guidelines so that federal, state and local government can provide data and reporting of their activities in a standard non-proprietary format.

    Personally, I think the Fund for Local News idea is off-target, but mostly not for reasons which have anything to do with bailout subsidies and journalism ethics. Those are sideshows. The real deal is that content providers and news consumers are currently being held hostage by an effective telco/cable duopoly which controls pricing, deployment, bandwidth, and effectively innovation for next generation news delivery systems. A duopoly which has also declared itself in opposition to Net Neutrality, and which, at least in the case of the telcos, has been knee-deep in the public subsidy trough for decades in return for vague promises to improve infrastructure.

    That the news business tends to be clueless about such technological issues is not surprising, and is probably one of the main reasons the technorati discount the media’s ability to spot shifts in the technical tectonics. One evident reason for this is that the news business also tends to be a consumer of technology and not an innovator of it. By the time journalists spot a trend, those responsible for creating it have moved on to something else.

    It also seems to me that it would be a mistake to assume that in order for the news business to advance that it needs to abandon its traditionally held newsroom wisdom about standards and ethics. That would be making a false assumption that we’re playing some sort of zero-sum game. The reality is probably closer to the idea that ethics make good business sense going forward, but that sustainable strategies and tactics are weak on the revenue stream side. Ethical or otherwise.

  3. says:

    I thought that fake newspaper aid stuff hd been forgotten…

    What should government do to help journalism? NOTHING. Since their definition of journalism seems to be these formerly fatcat publishers who looted the newspaper industry and then were too dumb to see what journalism was becoming giving any money to these same pigs who laid off everybody but kept the worst faux journalists who were sniveling coward kiss-but hacks is criminal. They want to help journalism? Give aid to innovative new era online outlets such as in a public outreach venue. Don’t give money to the morons who stole the actual journalists’ production, made huge profits up to the 2000s and then gutted the industry.