The ownership of newspapers and televison channels is in turmoil, and they want to redisorganise public broadcasting.
Three years ago, I expressed concern in a column about the future of the (traditional) media. Nothing has happened since to reduce the concern.
It was based on an earlier column which explained that while the economic argument was that information should be zero-priced, it requires resources to produce. How to pay (that is, to provide the resources) for news which should be a freely distributed is a paradox.
The answer cannot always be ‘the government’ (although in a number of areas such as education and research it is to some degree). Information independent of government is a key element of a democracy. There are many instances – including in New Zealand – where the government has manipulated information for its own purposes.
The nineteenth century found an ingenious solution to the paradox. News would be provided below its cost of production because advertisers would subsidise it in return for access to the readers of the news.
A mixture of government support, reader contributions and advertising revenue was not a perfect solution, but it worked and no one could think of a better way. Or at least it worked as long as advertisers required the traditional media.ncreasingly, they have found they do not, as the web enabled them to target their audiences more precisely. Moreover, while the new (social) media has been enormously profitable, it did not require the advertisers to subsidise the production of news. Instead it raided the traditional news media, posting their news for its customers.
Which is all very well, except it undermines the funding which supplied the news. The inevitable consequence was that the traditional media and quality journalism shrunk. New Zealand’s major centres were reduced to a single daily newspaper; elsewhere they were lucky to have a weekly. Meanwhile, broadcasting has suffered a similar reduction in its revenue base.
(The story is complicated by the convergence of delivery platforms. Radio New Zealand rebranded itself RNZ when it began a television presentation and introduced its own website. I discussed such developments in earlier columns and will skip them here.)
As a result, papers and broadcasting have been struggling for some time. We seem to have come to a sharp downturn or even collapse. The Covid Crisis did not cause it. Rather, as Schumpeter explained, business-cycle downturns precipitate business implosions waiting to happen.
Rearranging the deck chairs – which is what ownership changes largely are – as has been happening in the last few weeks, will not resolve the problem. The underlying problem is funding the resources. So where might the additional resources come from?
I am not opposed to some public funding. RNZ and Maori TV are among our most successful media institutions. New Zealand on Air’s recent funding of regional reporting is another nice example. But we do not want a media over-dependent upon the government.
I am nervous about the proposed amalgamation of TVNZ and RNZ, if the new institution has to depend upon advertising revenue. As the failures by the Clark-Cullen Government to modify TVNZ by additional funding show, it is driven towards a commercial approach because advertising provides additional funding. (The same thing happened with universities, whose main cash source on the margin is from international students, to the detriment of domestic students.)
That the government hired a commercial consultant to advise it on the merger generates forebodings. We all know the mantra: ‘there will be big efficiency gains from the merger which, together with the additional advertising revenue, will mean the merger can be done for free.’ Yeah, right; rearrange the deck chairs. A more realistic mantra is that public broadcasting is not commercial broadcasting.
Pulling TVNZ out of its commercial framework would release advertising revenue for the private media sector. But we also need to address the free-riding that the social media does. The Australians are asking social media to pay a levy for the news it uses from traditional media. Seems fair and sensible to me. The Europeans are exploring a similar scheme.
hen the Minister of Broadcasting was asked whether we are supporting the Australians, he said ‘no’ in a way which suggested the government is closing the door on all such options. That cannot be true of a social democrat government; we await the Ardern-Peters policy announcement.
Readers of newspapers pay. Paywalls on news-sites have not usually worked. Probably the private media have concluded they cant hike charges further.
Instead of a paywall, Stuff has invited donations. I do not know how successful that has been. At the time Stuff’s owner was a commercial Australian company. Inviting readers to donate to its profits is an unusual form of capitalism. Perhaps we should not try to model the media on capitalist lines.
Readers might welcome reminding that the website on which this column is published is donation funded along with the odd advertisement. So donations can have a role which is more than marginal.)
Alan Rusbridger’s Breaking News: The Remaking of Journalism and Why It Matters Now is a damned good read. The editor of the Guardian for twenty years tells lots of good journalistic stories (including breaking the Edward Snowden leaks). But it is also a gripping account of how a British daily faced up to the environment of advertising moving elsewhere and the rise of electronic media platforms.
The current resolution is instructive. The Guardian and the Observer are owned by the Scott Trust, which aims ‘to secure the financial and editorial independence of The Guardian in perpetuity’. While it is subject to the standard financial disciplines, it is not a capitalist organisation.
The trust has a huge war chest – around a billion pounds – which was mainly accumulated by buying and selling other assets. It certainly is not the result of the accumulated profits from the papers.
Revenue is obtained from subscriptions and some advertising. But what makes the difference are donations to the international news-site following the decision not to impose a paywall. After a number of years of losses, the group receives enough donations to break even.
What distinguishes it from Stuff is that the user of the news-site, and no doubt of the hard copies, has a sense of belonging to a community of readers. The paper encourages the approach: as well as comments on articles, it has a section ‘take part’ in which readers are invited to contribute, including pictures. You get a feeling that the paper – your paper – is not telling you on high what to think, but is listening to you. Perhaps I am mistaken and it is certainly not everyone’s cup of tea. (Do Guardian readers drink tea?)
Stuff has asked for donations but made, as far as I can tell, no change in their approach to their readers. We shall see what happens under the new management/ownership.
As a footnote, it would be harder for public-owned radio or television to engender this community feeling. Or is it? The RNZ Concert Program has been steadily involving its listeners for some time, a move justified by its community indignantly reacting when someone outof-touch in the RNZ head office decided to undermine it.
If we try to run our media on solely commercial principles as the Rogernomes wanted and as is implicit in much of our thinking, there is probably no future for an effective media – speaking truth to power. We are going to have to be much more imaginative, and pragmatic.