The future of print media
The dramatic increase in independent online journalism has put the survival of traditional media in doubt. Stephen Kirchner says the new media rules are good for free speech, but not so good for journalists.
Deutsche Bank this week issued a valuation for Fairfax that included a nil valuation for its metropolitan print business. It is easy to point the finger at the Fairfax management and board for this outcome, but that is far too parochial an explanation. Newspapers around the world are facing similar issues.
It remains to be seen whether print media can be transformed into new and profitable business models based on paid subscriber content. However, any such transformation faces a significant constraint that was disguised by the old model: few people are prepared to pay very much for what journalists write. It is a reality journalists are understandably reluctant to accept.
Journalists cloak themselves in themselves in the mantle of democracy, but while a free media is essential to democracy, the traditional role of journalists as intermediaries and interpreters of information has been greatly diminished by the same forces that have undermined the old media business models.
For every Woodward and Bernstein, there are many more journalists who have been captured or compromised by their relationships with politicians and other institutions they are meant to scrutinise. The old media business models in many cases helped sustain these cosy relationships.
Far from being friends of free speech and media competition, many journalists have a long-standing record of support for increased regulation by government. They would prefer to answer to government regulators than to proprietors and shareholders because a competitive marketplace for speech and ownership and control of equity capital exposes them to greater competition and accountability.
Now that barriers to entry have collapsed, journalists are facing the same competitive pressures as their traditional proprietors. They will increasingly have to sell their product directly into a much more competitive marketplace for ideas and information. In the long run, this should make journalists better friends of free speech and more effective in scrutinising politicians, business and other institutions.
Dr Stephen Kirchner is a Research Fellow at The Centre for Independent Studies and a Senior Lecturer in Economics at the University of Technology Sydney Business School.
John Kirk
June 27, 2012 at 5:42 am
The Open market
A more competitive and open market can only result in an improvement in the quality of the product. This applies to not only products but services as well. As you say breaking down barriers is important to create innovation and entreprenureship.
Newspaper is not the only part of the print industry seeing consolidation. Across the board there has been a huge shrinkage of the market in print with numerous mergers, bankruptcies, and take overs in the last few years and this continues almost on a weekly basis.
Traditional print is now a transitional industry moving from ink on paper to communication managers using multiple formats to get across their message. Mankind will always need to communicate. It is what sets us apart from the animal kingdom and ever since the rock paintings of the ancients we have been evolving our methods of communication. This is just the next step in that evolution.