Confirmation this week of how metro newspapers in Australia are over-cooking their published circulation figures is a sign of how desperate things have become in MSM land.
It’s been plain for a while that Fairfax and News Ltd have been giving away newspapers faster than they can print them in an effort to stop their circulation numbers falling to levels that threaten their advertising rates.
After all, it’s difficult to walk through a gymnasium, airport lounge, hotel lobby or university cafe these days without tripping over large piles of unread broadsheets, dumped on them by newsagents like cluster bombs from a B-52.
The economics of why media companies are clinging so desperately to their anachronistic distribution model is nicely explored by Alan Kohler in Business Spectator today. Essentially, a newspaper reader is worth around 20 times the value of an online reader in advertising alone, and more than 100 times once you take the cover price into account.
While it’s hard to feel sympathy for the likes of News Ltd, whose national daily The Australian struggles with a circulation of only around 125,000 (and that’s almost certainly an exaggeration), there is a public interest in what these trends mean for good journalism.
The publishers have known for years that their business model is unsustainable, but it’s still too damned profitable for them to give up on. So it’s in their interests to cling on to the old model for as long as they can. In the meantime, the standard of journalism (like the fabled boiling frog), shrivels under the heat of online competition.
So while we’ve all had felt some catharsis in the past week or two putting the boot into the press gallery’s miserable efforts in the election, sooner or later we’ll have to ask ourselves what price our democracy puts on good journalism – irrespective of the plight of the dying press monopolies.
3 Comments
Desipis · September 17, 2010 at 4:07 AM
I can't help but wonder how much the management of the media is just a reflection of the broader corporate culture that focuses on short term profits at the expense of long term investment. We've seen the media slowly throw away their independence and integrity (and thus long term audience) to get as many eyes as possible on the next issue all in the name of short term profit.
There are two key problems I see with relying on “the market” to play the role of the 4th estate. The first is that one key role to be played by quality journalism is a public good, not something individual news consumers buy when they purchase a newspaper, watch the TV news or go to the news website. Individuals still benefit from people being held to account even if they are not personally informed of this happening. People will support media that tells them what they want to hear, not what needs to be heard. For this reason there are no (or minimal) market signals to drive the news industry towards fulfilling that important role.
The second is that a fundamental nature of markets is the requirement of informed participants. Thus I cannot see how a market mechanism can be efficient way to distribute information to the uninformed. Individuals have no efficient way to judge the quality of the journalism provided; no way to assess the quality of the information in the newspaper they bought to newspaper to get in the first place. Thus even if people pursued quality journalism in sufficient numbers, they'd have no way as individuals to drive the market to providing it.
I'm not sure of the solution to the problem, but I think there other organisational structures that could provide ideas through their success with wikipedia and wikileaks coming to mind, but I'm sure there are also other successful charity or community based organisations that could be a source of ideas. Public funding most likely has a role to play too, however it's clear just how much that can be a threat to independence too.
Mr Denmore · September 17, 2010 at 5:40 AM
Desipis, thanks for the thoughtful comment. I think the market mechnanism can work well, but only if competition laws are strictly enforced.
Murdoch's market dominance is the problem. Imagine, say, if National Australia Bank controlled 70 per cent of the retail banking market in Australia. Wouldn't be allowed.
Anonymous · September 17, 2010 at 9:11 AM
Not to mention the number of trees that give their lives for the hard copies to keep getting rolled off the presses.