|
For the past four years I have been at work on a book about international media assistance and how it fits into the larger enterprise of “democracy promotion.” In the process I have come to know and admire two unique NGOs in this business, the Media Development Loan Fund (in New York, Prague and Warsaw) and the Southern Africa Media Development Fund (in Gaborone).
Both organizations are basically financing firms that help quality journalism companies become disciplined, self-sustaining businesses. This long-term approach is unusual in democracy assistance, which is known for the attention-deficit disorder of donors. If the approach is courageous, it is also a little bit crazy. Leaving aside for a moment the usual homilies about journalism’s role in democracy, the fact is that economics will always be conspiring to undermine your best work. If you’re a manager you know this intuitively, but here’s the textbook version: Journalism is, or at least has many of the characteristics of, a public good News is not like cars or football tickets or plumbing fixtures, but rather more like street lights or police protection: one person’s use (or consumption) of the good does not preclude use by another. As a producer of news, I can try to limit access to what I produce, but that would be inefficient and probably impossible. This has financial and social consequences. The cost of preparing a television news program, for instance, is the same whether it is broadcast to one person or one million, and no rational person will produce such a program if he cannot recover his average cost of production, that is, the cost of making the program, not the much smaller marginal costs associated with distribution. (The irrational or altruistic person may do this, but not for long.) But if no one produces news, we are all in trouble. Journalism is an experience good Unlike a motorcycle, a Bordeaux or a basketball, I cannot make a reliable determination about the quality of a media product without first consuming it. If I purchase and read Newspaper A I cannot know for certain whether I would have been better off if I had instead purchased and read Newspaper B – and I am not going to do that. As a consumer faced with lots of media choices, then, the best I can do is look for signals about content – for example, the length or style of stories, the design or presentation of the product – that conform to my preferences. Your problem in this environment is stimulating demand. This is why magazines will often spend more to produce a cover than they will to produce the rest of the issue. It is why, given a choice between Ariel Sharon and Pamela Anderson for the cover photo, Pamela will often as not prevail. It is also why TV news programs will repeatedly air the same story about a celebrity trial, a sex scandal or a natural disaster. By the third or fourth airing, these stories offer little or no new information and even re-cycle the same video, but as products they succeed at a large scale and so enjoy network effects: They gain a hugely disproportionate market share even as the incremental costs of producing the story decline. The production of news is an inherently inefficient activity News is not like automobiles, computers or blue jeans, businesses in which many fewer workers can now produce more product in less time than they could 10, 20 or 100 years ago. Put another way, good journalism is like good music, and is inefficient in the same way. Two hundred years ago, for example, it took four musicians to play Beethoven’s Opus 18, No. 4, and it took them about 20 minutes to play it. Today the piece still requires four people and still takes 20 minutes to play. There are some products, and news is one of them, where productivity remains flat or nearly so, notwithstanding the addition of new technologies or other innovations to the production line. Quality journalism – the kind that involves reporters who investigate and report, editors who edit and rewrite – works very much the same way. Good journalism is a hand-made product, and the only way to wring efficiencies out of it is, unfortunately, to eliminate reporters or avoid serious newsgathering, neither of which is a good thing for democracy. The consumption of public affairs media is also an inherently inefficient activity Economist Anthony Downs long ago developed the theory of “rational ignorance,” which says that for most people their time and money are more productively spent doing something other than becoming well-informed citizens. That’s because the chances of any single vote actually making a difference to a democratic electoral outcome is infinitesimally small, and thus the time any of us spends reading, watching or thinking about the news could be better spent clearing the garden or washing the car. In economic terms, when journalists anywhere complain about the lack of serious, “quality” journalism available to the public, they state the problem exactly backwards. The problem is not the lack of supply, but the lack of demand.
Because most audiences are rationally ignorant, business-savvy news organizations have a powerful incentive to engage in what economist James Hamilton calls “rational omission” with respect to public affairs and investigative journalism.
For all the reasons above, quality news is less attractive to large audiences, is much more costly to produce than sex, scandal and trivia, and brings lower returns. If your first duty is to shareholders, editorial quality is going to suffer.
Some other principles of public-interest economics also work against journalism, but these few are discouraging enough. If you doubt their power, look at the recent experience of the Knight Ridder Company in the United States. Among leading U.S. news organizations, Knight Ridder alone bothered to carefully investigate the Bush administration’s evidence for its 2003 invasion of Iraq before the war began. Knight Ridder reporters found the administration’s sources non-credible and reported on other sources with contrary views of Iraq’s WMD capabilities.
The company’s reward for its editorial courage arrived this fall, when its largest shareholder, citing “unacceptable profit margins,” demanded that the company either seek a single buyer for all of the company’s 32 newspapers or sell the company off piecemeal, paper by paper. At the time, Knight Ridder had just posted a dividend on a 2004 profit margin of 19 percent.
The truth is, of course, that quality public-affairs media everywhere find it difficult to support themselves financially, and there is no easy way around these economic problems. Trying to balance editorial quality with fiduciary responsibility is always a dance with the devil. The important thing, as with any dance partner, is who leads. And in this respect, I have come to believe that media in developed Western democracies could learn a lot from media companies in transition states where the best media firms – many of them clients of MDLF and SAMDEF – take nothing for granted.
Editor's Note: Craig LaMay is Associate Dean and Assistant Professor at Medill School of Journalism, Northwestern University, USA. Craig has spent much of the last couple of years travelling throughout transition and post-conflict countries assessing the health of independent media and the organisations that work to assist them.
Trackback(0)
 |
TrackBack URI for this entry
Subscribe to this comment's feed
