The world seemed to offer assent to our view of ourselves

From Can Journalism Be Saved? by Nicholas Lemann. He is a good reporter whom I have read in different forums over the years. In this instance, he is reviewing several books documenting the history of newspapers in this country. Documenting the past and hesitantly predicting the future.

His data aligns with what I have been observing for years. He understates the historical condition of newspapers post-WWII as preferentially treated markets by which Government granted exemptions to local papers to consolidate through market rigging agreements and/or through acquisition.

The lament of all journalists is that they at one time had a monopoly on news sales. A monopoly extended by the very government they were meant to be reporting on. Not being, in general, particularly numerate nor business savvy, journalists have long thought that they were producing important work when in fact they were classic examples of rent seekers.

There is a lot of good solid empirical data in the review.

The years since then have seen the economic devastation of the profession, which has been about as dramatic as in any sector of the labor market. Employment in newspaper newsrooms decreased by 45 percent from 2008 to 2017—and by 60 percent from 1990 to 2016. (Even so, newspapers, because they are declining from a high base, still have almost three times as many newsroom employees as digital-only news sites: 38,000 versus 13,000.) Newspapers’ paid circulation has declined from 62.5 million in 1968 to 34.7 million in 2016, while the country’s population was increasing by 50 percent. Just between 2007 and 2016, newspapers’ advertising revenue, their major source of income, declined from $45.4 billion to $18.3 billion (by 2016 Google was making about four times the advertising revenue of the entire American newspaper industry). Almost 1,800 newspapers, most of them local weeklies, have closed since 2004. This collapse is especially significant because newspapers were traditionally where most American journalists worked, and where most original reporting was done.

The overall numbers don’t have the punch of the specific stories of news organizations. Halberstam’s “powers that be” were The Washington Post, the Los Angeles Times, CBS News, and Time magazine—all of which seemed Gibraltar-like forty years ago. Now all four have different owners. The Washington Post Company sold the paper to Jeff Bezos in 2013 for the bargain price of $250 million, after years of cutbacks and after having sold its sister publication, Newsweek, to Sidney Harman in 2010 for a dollar. Newsweek’s circulation, formerly more than four million, is now 100,000. Time, after a series of ownership changes and many cuts, was acquired by Marc Benioff, founder of Salesforce.com, for $190 million in 2018. The Los Angeles Times was sold to the Tribune Company in 2000, and in 2018, many cuts later, to Patrick Soon-Shiong, a rich investor, who also bought The San Diego Union-Tribune. CBS went through several acquisitions, and is now the third-place news network. The Baltimore Sun, according to Hill and Broening, has reduced its editorial staff from a peak of 400 in the late 1990s to 80 today. The Boston Globe, according to Kennedy, has reduced its staff of full-time journalists from more than 500 to fewer than 285. The Atlanta Journal-Constitution is down from more than 530 to fewer than 150. Formerly big papers like the Rocky Mountain News, The Tampa Tribune, and The Times-Picayune of New Orleans no longer exist.

Hard times all around without their monopoly on ad revenue.

In this era, newspaper journalists were becoming white-collar: paid better than they had been before, and more likely to be college educated and to think of themselves as independent professionals with the stature to question government officials and other institutional authority figures. The big newspapers’ enhanced profitability financed this status upgrade. Television and radio had eroded their ability to be the prime deliverers of basic facts about daily events; newspapers responded by turning to what Pressman calls “interpretive journalism” and Schudson calls “contextual journalism.” Look at the front page of a first-rate American newspaper, and you’ll probably see that only a minority of the stories are summaries of events from the previous day and that several of them entail the reporters gathering information on their own and using it to present a conclusion they have drawn. That represented a big change from the newspaper tradition before the 1960s, which was more neutral, stenographic, and focused on official events.

In 1980, the end of the period Pressman covers, I was the kid reporter on the national staff of The Washington Post. Psychologically, we weren’t so different from a prestigious department at a major university: we were intensely dedicated to our work, we were hyper-competitive and aware of our status within our professional peer group, and we had an exalted sense of the social function we were performing. The world seemed to offer assent to our view of ourselves. What Rusbridger writes about The Guardian was also true at the Post: “Prime ministers, generals, spies, archbishops, princesses, ambassadors, bankers, film directors, presidents, rabbis, oligarchs and business leaders would come to lunch at the drop of an invitation.” It never occurred to us to worry about the Post’s economic prospects—especially after its only remaining competitor, The Washington Star, folded in 1981. The Post had hundreds of reporters, in the newsroom and all over the world, including several units of investigative reporters who were given months or even years to pursue their projects.

Interesting that Lemann draws the analogy to universities, another economic sector with an inflated self-regard and profit margins (which are never distributed to stakeholders but which enhance the incomes of select star professors and administrators while leaching income from all other employees) and similarly on the brink of catastrophic realignment. The education sector has more historical brand value to carry them longer but instead of reforming themselves in advance to avoid collapse, they are indulging ever more. But the mismatch between rent ($50,000-$75,000 per year) and real incremental value-add to future income is at bursting point and the public's acceptance of draconian terms of education loans and willingness to extend governmental protection and regulatory preference to the sector is probably approaching exhaustion.

It is all predictable, is predicted, will happen, and once it does there will be a wailing and gnashing of teeth just as there has been in the similarly situated media sector.

To the extent we thought about it at all, we would have said that subscribers read the paper because of the news coverage. Humility, for the Post’s national staff, meant understanding that more readers might be subscribing for the sports and style sections than for the national report. The idea that many readers valued the newspaper merely as a miscellaneous package of information (high school sports scores, stock tables, movie times, weather predictions), or even that some people read the paper mainly for the ads, would have seemed absurd.

[snip]

Newspapers in the online era, swelled by misplaced pride acquired during their heyday, thought they could build large audiences for their websites by producing great journalism. They often delivered on the journalism but, economically, that was pitifully insufficient. It’s hard to remember now, but in the 1980s and 1990s there was tremendous frustration, especially among activist groups on the left and right, with the top-down, controlled, serenely centrist tone of the leading news organizations. The advent of cable television as a much looser media regime than broadcast may have been upsetting to David Halberstam, but it wasn’t to media reformers.

"They often delivered on the journalism" is, I think, a charitable estimation, but certainly more than in the present.

Monopolistic rents are wonderful while they exist but ultimately unsustainable.

Ten years ago, when I was dean of Columbia Journalism School, I was invited to the Justice Department in Washington to speak to the senior staff of the Antitrust Division about an exception to the antitrust laws that the newspaper industry, by then fully awakened to the threat posed by Google and Facebook, had requested. American antitrust law doesn’t prohibit monopoly, but it does prohibit industries from setting prices in concert, which was what the newspapers wanted to do, by setting industry-wide terms for papers’ provision of their news stories to the big online platforms. (The newspaper industry, with support from its allies in Congress, is trying to get an antitrust exemption again now.) The Justice officials’ skepticism was palpable. Wasn’t this just another dying industry trying to save itself by claiming a high enough public purpose for its work to justify what amounted to a government bailout? Couldn’t somebody else figure out how to provide news in a new, probably digital way so that it would be profitable without the government’s help?

Lemann makes a point I have been harping on for years, press-release journalism.

In order to think productively about the future of journalism, it’s necessary first to identify exactly what we’re talking about. Contrary to the automatic prejudices of journalists, not every person employed in an editorial job at a news organization is performing an essential democratic function. (Rusbridger cites a study of five major daily newspapers in the United Kingdom, conducted in 2008, showing that only 12 percent of the material they published was original.)

That is twelve years ago in Britain. I would not be surprised to find, were a similar study to be done now, that perhaps less than 5% of a newspaper's content is original reporting. 95% is straight from the police blotter, press releases lightly edited from businesses, advocacy groups, etc., and opinion, the cheapest "reporting" of all. There is very, very little value-adding original reporting anymore.

And that original reporting that there is, frequently fails the value-adding qualifier. I am thinking of the New York Times' 1619 project as a prime example. An ideological rewriting of history in a fashion rebutted by all credible historians. This isn't original reporting. This is postmodernist/Marxist propaganda. Content which would have virtually zero revenue from voluntary customers paying with their own money (i.e. not counting revenue from postmodernists in the education sector spending taxpayer money.)

I think Lemann has some blinders on from being an insider.

The advent of the World Wide Web generated a great deal of excitement about the online world’s potential as a new zone of absolute free speech. And it has turned out to be wonderful for self-designated solo journalists who mainly comment on politics and culture (and the businesses that give them a platform), but not for reporting conducted by organizations with paid staffs, obligated to be faithful to facts and truth in what they produce. For that, professional, institutional, funded journalism is a necessity. Back in the 1990s it was common to hear predictions (from outside journalism) that privileging free speech over professional journalism would produce wonderful political outcomes. The late Internet visionary John Perry Barlow, in a 1996 speech at the Davos conference, declared:

We are creating a world that all may enter without privilege or prejudice accorded by race, economic power, military force, or station of birth. We are creating a world where anyone, anywhere may express his or her beliefs, no matter how singular, without fear of being coerced into silence or conformity.

But in the event, as Michael Schudson darkly puts it, “If there is any kind of new politics that has been disproportionately enabled by new communications technologies, it is probably international terrorism, not democracy.”

That seems a bit apocalyptic. It is absolutely true that universal connectivity has created new challenges on how to contain the spread of terrorism. But it is not hard to guess that Barlow is using terrorism perhaps to cover simply opinions divergent from those in circulation in academia and in the formerly financially privileged cloisters of mainstream media. You constantly hear media pundits complaining about hate speech when all they are referring to is people with opinions different from theirs.

The urgent question the economic collapse of newspapers poses is how to replace the original information they used to generate and don’t any longer. If one wants to be optimistic, one could say that such information would claim an authority and trust that social-media posts do not; but even if it doesn’t, the information has public value.

This betrays the statist/central planner mindset so rampant in the establishment, in mainstream media, and in academia. A mindset antithetical to the freedoms that most Americans assume will be respected.

"How to replace the original information they used to generate and don’t any longer" is not the question. Thinking that it is betrays the statist mind which formulates the question in that fashion. The free market will provide free citizens the information that that public values. No central planner needs to come up with the replacement. It will arise on its own in fashions not readily forecast.

As his own reporting shows, there never was all that much original information (remember 12%?) and it wasn't necessarily valued or valuable. If original reporting has value, it will be created and delivered in a free market. The prior monopoly on ad revenue blinded journalists to the fact that most of what they did was not valued or added value to the reading public. A fact that became apparent as alternative news sources became available and readers fled to better and more focused reporting on topics more aligned with the interests of the reader.

It reminds me of a monopoly telephone client with whom I was working back in the mid-1980s. I was discussing with an executive some pending deregulation which would open a portion of their market to competition and I was asking what preparations they had taken, how much market did they think they would retain? His complacency was notable.

"We don't expect to lose much marketshare. We survey our customers after all our interactions and 90-95% are satisfied with what we are doing. I was uncomfortable with the reassuring but seemingly glib response.

And sure enough, there was reason for concern. The "survey" merely asked customers something along the lines of "Are you satisfied with the service we provided?" The client had never identified what services clients actually wanted, nor the price elasticity of that demand. All they really knew was that customers had never had a choice of alternative providers, alternative price levels and alternative services but were pretty satisfied with the limited service they had had in the past.

Reality is harsh. It was harsh for the telephone companies who bled customers and revenue once they had alternative choices, and it has been harsh for media once they lost their guaranteed rents.

Because public-service journalism has never been able to sustain itself in the marketplace, it needs some outside support system or it will disappear. For part of the twentieth century, monopoly big-city newspapers lived on advertising that was, compared to current online methods, economically inefficient for the advertisers. For television news, a regulatory system made stations profitable while requiring them to broadcast public service material. For news organizations with wealthy patrons, the support system is obvious, and also unpredictable. For nonprofit news organizations, the donors are the patrons, but the government helps too: without the tax advantages that the American system confers on nonprofits and their donors, they would not exist. Elsewhere in the world, the model of public media, like the BBC, is a common support system for journalism in democratic societies, and even here NPR and PBS, though they get only minor public funding, were founded by the government.

Just as there is no such thing as hate speech, there is no such thing as public-service journalism. It is a cognitive fig leaf. Believing in public-service journalism is choosing to believe that government (in the form of tax treatments, regulation, and legally sanctioned monopolies at the expense of the citizen) is the appropriate arbiter of what news should be made available to news consumers. Statist predicate assumptions again.

I am truly sympathetic. I have all my life been a huge consumer of news and reporting, primarily in the form of multiple newspapers and dozens of magazines. The last decade has been wrenching in the sense that I have been forced to quit a lifelong habit owing to bad, false, credulous and low-value reporting. I can see the writing on the wall and know that the type of writing and reporting I used to love is no longer available and unlikely to return. I have had to get smart about finding all the incredible direct reporting that is out there. Most of it free.

Lemann is so captured by the insider's mindset that he retails the common myth that NPR/PBS only receives minor public funding. Which is true if you accept that half a billion dollars of debt is minor. Half a billion dollars a year in public spending on reporting which is highly biased towards one party and more generally is really just the mouthpiece of the privileged establishment and irrelevant to most citizens and is targeted to a minor and very narrow audience (though privileged).

Lemann also omits the fact that the public funding model in the rest of OECD is on increasingly shaky grounds. The case of the BBC is illustrative. The BBC is notorious as a mouthpiece of London's insider establishment fads and fancies. There used to be some post WWII nostalgia for the BBC as the spokesperson of the British but that brand has largely disappeared.

In its stead, the BBC coercively extracts a fee from all TV owners, collected on the threat of fines and jail, while delivering content which is of interest to the metropole intelligentsia and divergent from most citizens views and interests. The drama of Brexit put this front and center with the citizenry increasingly supportive of Brexit and the BBC remaining overwhelmingly supportive of remaining. Why should the average citizen compulsorily subsidize a news source acting against the citizen's own interests? A question which many are increasingly asking and which has long been equally valid here in the US regarding NPR/PBS.

When an old commercial model collapses, the insiders always turn to the state for defense, whether through tariffs, quotas, subsidies or regulatory protections. It always happens and is always predicated on the assumption that 1) the insiders deserve protecting, 2) that government is a better judge of what the market wants and or needs than are individual consumers, and 3) that it is ethical for government to subsidize some classes of people at the expense of others. That is not how the argument is made, but those are the assumptions it rests on.

Lemann gets increasingly careless in his argument.

Then there is another option, imperfect like all the others, for saving journalism: direct government subsidy. Almost all American journalists react to this idea with a strong visceral recoil, especially now. But the severity of the situation demands subjecting our automatic assumptions to more careful scrutiny. Government support can be structured in many different ways; great portions of the independent truth-seeking activity in the United States are funded by the government, reasonably successfully, despite enormous built-in potential for political interference. The Federal Reserve employs many more professional research economists than any economics department. Public libraries, almost all the time, are permitted to acquire their books and research materials freely. University research—indeed, universities generally, including private universities—are overwhelmingly supported by the government, including when their work touches on politically controversial subjects. Most of the basic research establishing global warming as a phenomenon was conducted either by government employees (like James Hansen of NASA) or by government-funded researchers, despite the powerful political opposition to this kind of science.

Asking a news consuming audience to believe that we can and will get quality, truth-seeking reporting from a sector directly subsidized by the government is pretty daring. When blue-collar steel workers wanted quotas and tariffs on steel imports, most media had no problem pooh-poohing those requests (and rightly so from an economic perspective.) But now that they, like steelworkers in the 1980s, are facing an existential economic crisis, there they are, standing in line asking for the government subsidies which they correctly argued would not be appropriate for blue-collar steelworkers. It is an off-putting argument.

And this: "Most of the basic research establishing global warming as a phenomenon was conducted either by government employees"!?!?! This is supposed to be a credible argument. For much of the public, this is a perfect example of the type of insider self-serving which is so prevalent and despised.

Lemann closes with a reprehensible paragraph encapsulating the privileged-insider, flyover country-despising, establishment viewpoint.

What has happened in journalism in the twenty-first century is a version, perhaps an extreme one, of what has happened in many fields. A blind faith that market forces and new technologies would always produce a better society has resulted in more inequality, the heedless dismantling of existing arrangements that had real value, and a heightened gap in influence, prosperity, and happiness between the dominant cities and the provinces. The political implications of this are painfully obvious, in the United States and elsewhere: in journalism, the poorer, the more nativist, the angrier parts of the country (which vote accordingly) are the ones where journalism can’t deliver on its public promise because of its severe economic constraints. Journalism is a case in which it’s going to take a whole new set of arrangements, and a new way of thinking, to solve the present crisis.

What has happened to journalism is no more nor less than what has happened in every economic sector which no longer provides value to its customers. It is not a matter of blind faith in market forces - it is an empirical observation. All systems which coercively redistribute lucre from the public to privileged insiders is inherently unstable and prone to failure. Either the government allows the failure to happen with appropriate mitigating tactical policies or the public forces the failure through Irish democracy.

Appealing to the pitiable inequality argument (in an era when the poorest twenty percent of Americans have a consumption profile of the median European household) is almost insulting. The argument is almost becoming incoherent. You cannot observe earlier that much or most of the old reporting had little commercial value and then lament that "the heedless dismantling of existing arrangements that had real value". If it had value, if it has value, it will be purchased. Either it has no value or we are in a period of institutional transition when the market reforms and corrects. We see evidence of the former but it is possible that the latter is true as well.

This is perhaps the lamest claim:

In journalism, the poorer, the more nativist, the angrier parts of the country (which vote accordingly) are the ones where journalism can’t deliver on its public promise because of its severe economic constraints.

The translation is: You stupid rubes don't know that you need our elitist nonsense and need to be forced to pay us.

How close is this to the metropolitan insider intelligentsia disdain for the public rubes? Pretty close. That sentence is right up there with

They get bitter. They ling to guns or religion . . .to explain their frustrations.

or

You could put half of Trump’s supporters into what I call the basket of deplorables. Right?” Clinton said. “The racist, sexist, homophobic, xenophobic, Islamaphobic—you name it. And unfortunately there are people like that.

Sure, that's a winning argument to close out a review seemingly arguing for special treatment of journalists at the expense of ordinary citizens.

Fundamentally, Lemann is a quality reporter. He is here stuck with insider syndrome. Bad stuff is happening in his industry as it adjusts to a new and more dynamic market. He dislikes what is happening and he cannot see how it ends.

Nor can I. And I share a historical fondness for the old heyday. But I also see that, for whatever the wrenches, angst and individual suffering which goes with industry sector adjustments to more freedom, more technology, more commercial innovation, etc. the eventual result is virtually always better for everyone. And the reverse is also true. Whatever is hatched from closed, coercive systems of central planning and state support almost always end up wasting huge amounts of taxpayer money and making things worse for everyone.

Deregulation and the internet have eviscerated the monopolistic profits and journalists are only latterly and extremely reluctantly beginning to appreciate that they never were producing much of value. They were classic rentiers living off the largess of unearned monopolies granted by the state. What the new future looks like, it will almost certainly be better based on past performance of free markets. Painful as it might be for the small number of old insiders who enjoyed earlier privileges.