Dan lays it down tough, but he says some things that really needed saying, that needed amplifying.
I'm still pretty freaked over the general decline of the overall enterprise of public affairs reporting, investigative reporting, civic and civil society reporting and analysis, as these behemoth media monopolies falter like a single-species pine forest hit by the bark beetle.
But Dan is at least reminding us, reminding me, of something I knew, suffered with as the status quo, never quite reconciled myself to as the years rolled by, but found myself increasingly powerless to do anything about it to fight those monopolies, at least until the blog movement and the idea of citizen journalism came along.
Not that the pretty feeble but courageous citizen journalism and non-profit journalism efforts caused the massive monopolies to shiver in their boots. That mild contribution to the monopolies' death is just a thousand cuts, with the IDEA of the real masses, the huge reading publics accessing content for free online. Those readers were fed by an advertising-subsidized content machine, however, a machine created and delivered in an industrial, mindless assembly-line, tape-recorder-journalist-as-low-wage-line-worker model, not with a a critical thinking and analysis (even semantic parsing!) information age model (one could argue the Internet model is SEO-driven, nearly-bot-written content thinly scraped to follow trending topics... but that's a subject for another post!).
But the real death blow is being struck by the hand that fed the monopoly powers: advertisers cutting back in the face of the Great Recession.
So what do the media monopolies do? They blame their own non-subscribing readers as deadbeats, when subscribers were never asked to support the cost of the content production machine back when the ad money ran green.
Sorta like blaming taxpayers who drive cars that use oil as the real (meaning not-BP) "deadbeats" behind the BP-negligence-caused oil spill in the Gulf (no thanks for that ill-considered comparison, Tom Friedman!).
Dan notes below that the own-the-whole-town media monopolies exploited the advertisers with ever-increasing rates, fatter (impossibly fat) publications full of more throw-away bits. What Dan doesn't mention (but I'm sure he's also aware of it) is that, not only were the monopoly ad rates monopoly-high, they were also a technical "scam" in terms of the new world of the Internet.
Why? Because advertisers often paid top dollar for ads that never once fell in front of the eyeballs of a real human being. The fat Sunday fliers often stayed stacked on the floor, then got tossed into the trash unopened.
In the brave new world of Internet advertising, we can find out exactly how many eyeballs see online ads. With the coming dominance of the Internet advertising model, a model built on true accountability, paying for ads that can't be verified as seen comes off scammy, by comparison.
So by my reckoning, the previous monopoly-ad rates were also inflated in terms of numbers of actual "viewers". The recession-driven collapse of the traditional media publication ad market is also affected by an Internet-advertising-accountability-driven deflation of artificially-inflated offline ad rates.
That's how I see it, anyway. Dan lays out the monopoly argument below. We'll have to see if the offline ad markets bounce back as the recession eases, to discover if offline ad inflation due to tracking blindness keeps offline ad rates lower.
Some interesting preliminary numbers coming in on iPad ad clickthroughs. Too early to read anything into it, tho. Still too much of a novelty.
Eroding newspaper business models represent markets that are working, not just failing
By Dan Gillmor
More than one speaker at today's Federal Trade Commission workshop on the future of journalism has used the expression "market failure" to describe the eroding business model of local newspapers. Perhaps they've picked up on the FTC's Federal Register Notice describing the purpose for this months-long initiative, in which economists say that "public affairs reporting may indeed be particularly subject to market failure."
There's some truth in this, even though it's far too early to assume that current trends will lead over the long term to less trustworthy information in the public affairs realm.
For the privileged few journalists who lived in that era's once-warm embrace, and especially for their employers, professional life was almost perfect -- because that was an era of fabulously profitable monopolies and oligopolies.
But there's another way to look at the media marketplace of those days. And from several other perspectives it's safe to say that current trends amount to the overdue correction: that the pined-after Golden Age was in key ways itself the era of market failure.
If you were a local business that wanted broad reach into the community, you essentially had to pay the extortionate and always-rising display advertisement prices newspapers charged or the equally extortionate broadcast rates local TV affiliates could command. If you were an individual trying to sell a car or household item or rent out a spare room, you paid absurdly high prices for classified ads.
If your neighborhood or community or issue didn't interest the newspaper, it might as well have been banned from the community agenda. And if you had something to say, and wanted the community to hear or read it, your options were to pray you could get a letter to the editor published, or an even-rarer Op-Ed piece, or put out fliers around town. If you tried starting a competing newspaper, you'd often find yourself at the untender mercies of Big Media companies that would squash you like a bug. Forget about starting a competing TV or radio station; the local frequencies were owned by people who never lost their licenses no matter what they did.
That was market failure, too. For everyone but the monopolists and oligopolists, the market was grossly inefficient and nearly impossible to change. [emphasis mine, cb]
The FTC is the principal federal government agency charged with promoting competition in American commerce. I don't recall that it paid much attention to the inefficient, uncompetitive markets we had during the dominant days of newspaper monopolies and cozy, government-protected broadcasting.
So why, when the market finally opens up to competition at a variety of levels, is it suddenly time to fret so urgently about a market failure in journalism?