Rupert Murdoch: Journalism and Freedom – A Rebuttal

In an op-ed at his flagship Wall Street Journal today, News Corp chief Rupert Murdoch rehashed some of his recent barbs (such as claims of fair use abuses) while wrapping News Corp with the American flag. With a nod to Jay Rosen’s brilliant analysis of “information wants to be free” criticism, I tackle a few of his claims:

From the beginning, newspapers have prospered for one reason: the trust that comes from representing their readers’ interests and giving them the news that’s important to them.

Newspapers prospered because they held a quasi-monopoly on eyeballs, especially as major cities turned into one-newspaper towns (literally or practically). Murdoch admits this inconvenient fact deep in his op-ed.

And newspapers owners did not wake up one morning to discover that the world had changed overnight; they are not suddenly losing their audience! Over the course of the 20th century, newspaper circulation and readership has steadily dropped, even as the overall population has steadily increased:

In 1940, there was one newspaper circulated in the United States for every two adults, by 1990 one newspaper circulated for every three adults. According to surveys, the share of the adult population that “read a newspaper yesterday” has declined from 85 percent in 1946 to 73 percent in 1965 to 55 percent in 1985 [1].

And the percentages continue to plummet. A February 2009 student from the Pew Research Center reported that only 39% of Americans said they had read a newspaper (either print or online) “yesterday” [2].

First, media companies need to give people the news they want. I can’t tell you how many papers I have visited where they have a wall of journalism prizes—and a rapidly declining circulation.

I think that many of us who are concerned about the future of news are most worried about city-hall reporting and investigations into government and business claims and deeds … you know, that kind of muckracking that tends to win awards but not popularity contests among the rich and powerful. I don’t know anyone who is concerned about entertainment, fashion, sports, gossip … all of the things that “people” seem “to want.” Case in point: the Saturday after Thanksgiving, the leading stories on six major news websites included the White House party crashers or the Tiger Woods car accident. Two sites — MSNBC and Yahoo — featured both. In an earlier day, these stories would have only made the front pages of the tabloids.

Quality content is not free. In the future, good journalism will depend on the ability of a news organization to attract customers by providing news and information they are willing to pay for […] In the new business model, we will be charging consumers for the news we provide on our Internet sites.

It’s true that quality content costs money to produce — whether that content is an investigative story in a newspaper or analyses like Planet Money or 60 Minutes. But Americans have never “paid for” generic content – we have paid for the convenience of having our newspaper on our doorsteps in the morning or for a better quality picture on our TV (cable et al). The true cost of creating (“paying for”) that content has been born by advertising. That model is history.

Consumers are willing to pay for exclusive content (think Consumer Reports, for example, which has always been subscriber, not advertiser, supported), for content that will save them time or money (think Angie’s List), and for content that supports their hobbies (think Major League Baseball).

However, consumers are not willing to pay for content that they can find elsewhere “for free.” The jury is out on whether enough citizens care about publilc policy issues to pay for that kind of reporting, reporting that has historically been subsidized by the audience for sports and entertainment. (In fact a persuasive argument could be made that public interest reporting should be made freely available, because of its contribution to civic life.)

In other words, consumers are willing to pay for some content but certainly not all content. Murdoch does not acknowledge this caveat in any of his public statements on the “future of journalism.” This essay is no different, which isn’t a big surprise since it is an edited version of his testimony at the Federal Trade Commission’s workshop on journalism and the Internet.

And yet there are those who think they have a right to take our news content and use it for their own purposes without contributing a penny to its production. Some rewrite, at times without attribution, the news stories of expensive and distinguished journalists who invested days, weeks or even months in their stories—all under the tattered veil of “fair use.”

These people are not investing in journalism. They are feeding off the hard-earned efforts and investments of others. And their almost wholesale misappropriation of our stories is not “fair use.” To be impolite, it’s theft.

In the spirit of full disclosure, it was this unsubstantiated attack that prompted this rebuttal. If there is a person or organization who is “taking” content under “fair use” and profiting from it, name names. Oh, and Google ain’t it, if that’s the unnamed boogey man.

And while you’re at it, go peek in the mirror: the Wall Street Journal does not link out to competitors when they’ve broken a story, it doesn’t even link to vaguely-referenced sources (reports without titles, for example), as I complained (via email) to senior technology editor Julia Angwin last month. Her emailed reply: “It’s true that we could provide improve [sic] the number of links we provide in most WSJ online stories.”

Right now content creators bear all the costs, while aggregators enjoy many of the benefits. In the long term, this is untenable. We are open to different pay models. But the principle is clear: To paraphrase a famous economist, there’s no such thing as a free news story, and we are going to ensure that we get a fair but modest price for the value we provide.

Finally, we get to the refrain in this song. See Murdoch Ups The Search Ante and Murdoch On Google and Pay-To-View.

The government has a role here. Unfortunately, too many of the mechanisms government uses to regulate the news and information business in this new century are based on 20th-century assumptions and business models. If we are really concerned about the survival of newspapers and other journalistic enterprises, the best thing government can do is to get rid of the arbitrary and contradictory regulations that actually prevent people from investing in these businesses.

One example of outdated thinking is the FCC’s cross-ownership rule that prevents people from owning, say, a television station and a newspaper in the same market. Many of these rules were written when competition was limited because of the huge up-front costs. If you are a newspaper today, your competition is not necessarily the TV station in the same city. It can be a Web site on the other side of the world, or even an icon on someone’s cell phone.

These developments mean increased competition, and that is good for consumers. But just as businesses are adapting to new realities, the government needs to adapt too. In this new and more globally competitive news world, restricting cross-ownership between television and newspapers makes as little sense as would banning newspapers from having Web sites.

Murdoch’s assessment of the direction of the threat to incumbent media companies is spot on. The future delivery channel for “newspapers” and “TV’ and “radio” wil be the Internet. However, I disagree with his proposed remedy. This is not the time to feather the nests of corporate titans, especially at a time when as much as 90 percent of what Americans read, hear and watch is controlled by five corporations [3]. We need to hasten the fragmenting of these oligopolies, not allow them to become more tightly integrated. Moreover, relaxing cross-ownership rules could jeopardize fledgling neighborhood (hyper-local) news efforts by allowing incumbent interests to consolidate and wield even more market power than they do today.

For the record, News Corp is the world’s second-largest “media” conglomerate (number one, Disney). It’s no wonder that Murdoch champions additional consolidation.

When the representatives of 13 former British colonies established a new order for the ages, they built it on a sturdy foundation: a free and informed citizenry. They understood that an informed citizenry requires news that is independent from government. That is one reason they put the First Amendment first.

Ah, yes, end with an emotional appeal, patriotism. Let’s wrap News Corp. — an Australian-based congolmerate until 2004 — with its adopted American flag. You can’t get more stereotypically “conservative” than this, unless you throw apple pie and baseball into a God-and-country mix.

Citations:
[1] Stephens, M. (n.d.) History of Newspapers, For Collier’s Encyclopedia.
[2] Pew Research Center. (February 26, 2009). Online Growth, but Print Losses are Bigger
[3] Bagdikian, B. (2004). New Media Monopoly.