Changing Journalism

Peter Lee-Wright, Angela Phillips, Tamara Witschge

• Publisher: Routledge
• Year: 2011
• ISBN:
  9781136672705
• Edition: 1
• Topic: Media & Performing Arts
• Subtopic: Film History & Criticism

Journalism is in transition. Irrevocable decisions are being made, often based on flimsy evidence, which could change not only the future of journalism, but also the future of democracy. This book, based on extensive research, provides the opportunity to reflect upon these decisions and considers how journalism could change for the better and for the good of democracy. It covers:

• the business landscape
• work and employment
• the regulatory framework
• audiences and interaction
• the impact of technology on practices and content
• ethics in a converged world

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The book analyses research in both national and local journalism, broadcast, newspaper and online journalism, broadsheet and tabloid, drawing comparisons between the different outlets in the field of news journalism, making this essential reading for scholars and students of journalism and media studies.

Part I

Changing political and
economic structures of
journalism

1

The changing business of news

Sustainability of news journalism

Angela Phillips and Tamara Witschge

Information is to democracy what oxygen is to fire. Without one the other cannot survive: an un-informed voter cannot use her vote intelligently, nor hold power to account. That is why democracy and the independent news media have developed hand in hand, and why any threat to the survival of organised news in the public interest (however flawed it may be) is also a threat to democracy. Today we face a crisis in the business model of news. It is not a crisis of demand – audiences ebb and flow, and may be deeply sceptical at times – but the thirst for news and information has not disappeared; it comes down to a crisis of funding.

Quality news production feeding relevant information to societies on a structural basis is not cheap. It requires large numbers of highly trained personnel, organised to respond to every change and wrinkle in domestic and world events. This chapter examines the way in which the current changes in the production and organisation of news has shaken to its foundation the business model on which news delivery has long depended. As media companies struggle ‘to adjust to wide-ranging changes that are increasing competition and eroding their audience and advertising bases’ (Picard, 2005: 344), we ask how it is possible to maintain the vital functions of news journalism.

No one has paid the full cost of news since the advent of advertising in the middle of the nineteenth century (Curran, 2002). On commercial television and radio, news has always been cross-subsidised by the lucrative sale of advertising around popular programming. On subscription channels also, it is the popular entertainment programming that attracts the audience. Newspapers, depending on scoops and story telling to keep circulation high, have had some means of recouping at least part of their own costs via sales, but the advertising subsidy has kept the cost of news at a price that is far below what it takes to produce. Today, audiences have many other sources of entertainment, a major one being the internet. As audiences move on to the net, so too do advertisers (K. Allen, 2007; Holton, 2008) but those advertisers are finding new ways to get directly to their audiences which do not require them to pay for space in news media as they have done in the past. Popular and local newspapers and TV have always attracted the lion's share of advertising and shareholders expect high revenues as a result, so when the level of advertising started to drop, it created anxiety in boardrooms and a large number of closures, particularly in the USA and UK.

In this chapter we trace the problems that current news businesses face and the consequences of them. Commercial news on the web appears to have limited options for recouping production costs through sales. Moreover, it finds itself sharing a space and a funding method, not only with radio and TV, but also with the new entrants into the news business: the aggregators. Aggregation sites such as Google News, together with the fast distribution potential of the internet, are undermining the unique selling point of news organisations – the scarcity value of being first with the news. They could also be fatally damaging to brand identification for all but the very largest and best known news organisations, and thus strike a further blow to the business models of news media and to the requirement of democracy for a diversity of news media.

There seems little reason to suppose that advertisers are going to take up the cost of news production across all these platforms, when they now have a plethora of different, and more direct, ways of getting to their audiences. Currently the favoured method for most news organisations is to reduce the cost of newsgathering (House of Lords, 2008: 9), exploring, for example, the use of amateurs (citizen journalists) to provide what journalists used to be paid for. Other ideas include: bundled subscriptions providing access to news and other services, iPad and iPod applications, pay-walls and micro-payments. However, these explorations have not yet produced a final answer to providing sustainable business models. This chapter maps the different responses and discusses the success (or failure) of different business models, drawing on examples from within and outside the field of news journalism. We also ask whether the market model is sustainable into the future or whether different models have to be worked out. What possibilities for alternative funding and delivery are already available, and to what extent are they capable of delivering a service that is relatively free of interference from the state?

The dual role of news businesses

News media are businesses that at the same time fulfil a public service: they provide valuable information to citizens. These two roles, as Picard points out, ‘create tensions within media companies and among media policy-makers that require careful balancing if society is to gain the benefits of a free and independent media system’ (2005: 337). With the current challenges facing news businesses, these tensions are intensified as both the business side of media and their capability (and inclination) to cater to the public interest of citizens are put to the test. These two roles of news have been analytically separated into the ‘market model’ and ‘public sphere model’ of media, each of those models evaluating media on a different basis (Croteau and Hoynes, 2006: 16). We maintain that, to assess the functioning of news media properly, you need to look at both roles at the same time.

News media play an important ‘role as facilitators of social and political expression’ (Picard, 2004: 109). They are expected to serve the public interest, but when exactly public interests are being served, is difficult to gauge. Brian McNair (1995: 21) suggests that news media in an idealised society should: inform, educate, give publicity to governmental and political institutions; scrutinise these institutions and provide a platform for public political discourse. To allow for a consideration of changing views on public interest, Croteau and Hoynes maintain that media ‘serve the public interest to the extent that they portray the diversity of experiences and ideas in a given society’ (2006: 34).

The idea of public service is often seen to be diametrically opposed to the economic or business interests that guide media behaviour: commercial media will seek to fulfil economic motives before public service motives (Picard, 2005: 338). Moreover, ‘most of the activities that support public interest and democratic processes . do not attract large audiences, are often costly, and are typically less profitable than producing other content’ (ibid). In many countries media regulation and/or incentives have been put in place, focussing mainly on news, as an attempt by policy makers to ensure that news is not squeezed out by more popular programming, and also to ensure diversity in the public sphere (the issues relating to regulation will be discussed in more detail in Chapter 3).

In some countries, the public service nature of news media has resulted in direct subsidies, providing the economic basis that is needed to continue delivering this service. In Nordic countries, for instance, in response to earlier economic crises, there has been support for the newspaper industry, to reflect the social, cultural and political role they play in society (Picard, 2007: 236–37; see also de Bens, 2007: 373–75). In most of Europe, public service radio and television are subsidised either directly or indirectly by government.

However, even though the ‘broad public purpose of media’ is widely accepted (Croteau and Hoynes, 2006: 33), news has always been primarily a business (Cranberg, Bezanson and Soloski, 2001: 1), albeit involving a wide variety of actors (see below). Viewing media as a business, allows us to consider managerial and economic conditions that result from different forms of ownership and different business models (Picard and van Weezel, 2008), an angle particularly important for current analyses of the news field.

Ownership models

Understanding different funding models is of great importance to understanding the functioning of news media in general. As Picard notes: ‘[b]usiness models need to account for the vital resources of production and distribution technologies, content creation or acquisition, and recovery costs for creating, assembling and presenting the content’ (Picard, 2002: 26). Hence, content is inextricably linked to ways of funding news. Leaving aside state owned, or subsidised, media there are different types of ownership and, in different national and regional contexts, different models dominate: private ownership, publicly traded media, foundation- funded or not-for-profit ownership and employee owned media. Each of these forms of news media ownership ‘produces different operational and performance contexts’ (Picard and van Weezel, 2008: 23).

Worldwide, the majority of newspapers are privately owned (60 per cent), most of the rest are owned by governments, and only a small minority are publicly traded (3 per cent) or employee owned (4 per cent) (ibid: 24). In the USA, most news businesses were in private hands until the last quarter of the twentieth century, when many were subsumed into public companies. Now, 40 per cent of news organisations are owned by public corporations, and many of the privately owned organisations are not single local papers, but chains with diverse media interests (ibid). There are a number of reasons for this (including the effect of inheritance tax on family-owned businesses which forced families to sell), but key amongst them has been the extraordinary profits that could be drawn from newspapers enjoying local monopolies in many American cities. Between the 1991 recession and 2000 (the peak of the dot-com boom), newspaper advertising revenues rose by 60 per cent and profit margins nearly doubled to 27 per cent (State of the Media Report, 2004).

In the UK, the local and regional press has seen a particularly marked consolidation of ownership in recent times. Currently, four publishers dominate the market, with a 70 per cent market share across the UK (House of Lords, 2008: 46). In the national broadcasting market, we see a comparable situation in news production: there are three dominant players producing national television news (BBC, ITN and BSkyB) and three producing national radio news (BBC, Independent Radio News and Sky News Radio). In commercial radio, four companies have an almost 80 per cent share of the market (House of Lords, 2008: 49–52).

The increased profitability of commercial news organisations has inspired an ongoing debate about what can be considered ‘ “[a]ppropriate” profit levels for media companies’ (Picard, 2005: 341). In many cases, the panic in the boardrooms after 2000 was a reaction, not to a collapse, but to a drop in the expected level of profit. In other cases, over-leveraged companies – bought with big loans during the boom times – simply collapsed under the weight of their debt repayments, when the crash of 2008 hit advertising across the board (Picard and van Weezel, 2008: 5).

Commercialisation

Given the dominance of players in the field, whose responsibilities are to themselves or their shareholders, rather than to their role in a functioning democracy, there are concerns that news media are now too focussed on the ‘business’ side of things. As Picard and Van Weezel (2008: 8) point out: ‘Public ownership ... is accompanied by significant financial pressures, separation of ownership from management, and increased organizational size and complexity’. Because commercial news is first and foremost a commodity enterprise which is run by managers who put the economic motives above the public interest function, there will always be ‘less flexibility ... in making judgments about coverage’, and this means ‘potentially important stories whose yield is uncertain’ are not followed through (Cranberg et al., 2001: 12).

The focus on the bottom line can lead, as Cranberg et al. (2001: 2) suggest, to a position in which ‘news has become secondary, even incidental, to markets and revenues and margins and advertisers and consumer preferences’. One of many examples is the US Tribune, bought by Sam Zell in December 2007. He saddled the company with levels of debt that could only possibly have been paid for in a boom and filed for bankruptcy the next year. The Tribune group (like many other news companies) entered a period of restructuring and cuts. Zell, in a meeting with Tribune staff, betrayed his attitude towards news-gathering when he described the Tribune Washington Bureau (which reports on government) as a non-revenue generating ‘overhead’ (Folkenflik, 2008).

The pressure to increase profits to shareholders has the additional effect, documented by a succession of writers (e.g. Cottle, 2003; Bourdieu, 2005), of moving all the big players towards the centre ground where, it is assumed, the biggest audiences and therefore the biggest profits lie. This ‘homogenising effect’ operates against the assumption that a market model will ensure a market place of ideas (thus increasing diversity): ‘One of the paradoxes is that competition has the effect ... in fields of cultural production under commercial control, of producing uniformity, censorship and even conservatism’ (Bourdieu, 2005: 44).

So, commercialisation of media – where economic motives drive content – seems to be detrimental for the public service function that news media play. At the same time, as Picard (2005) argues, a sound and healthy financial situation needs to be the basis of any news company, and financial strength is required in order to ensure the independence needed to operate as a watchdog with regard to government and other organisations. When ‘conditions are stable and companies are financially secure, they tend to exhibit more willingness to attend to public functions than when conditions are turbulent and their financial performance is poor’ (Picard, 2008: 212).

Currently, there are very pressing threats to both the economic sustainability of news media and their public service provision. As Currah (2009: 12) fears, ‘the financial lifeblood of professional journalism is being constrained by the societal and technological dimensions of the digital revolution’.

Challenges to traditional business models of news

The past decade can be seen as an extremely ‘tumultuous period for media firms’, where they have had to ‘seek ways to maintain viability in a rapidly changing business and social environment’ (Owers, Carveth and Alexander, 2004: 3–4). These changes have impacted on news journalism in a variety of ways (including employment, its practice and its relationship to the audiences, which we will address in subsequent chapters), but most significantly in light of this chapter, and perhaps also for news media in general, it has impacted on the viability and sustainability of existing business models.

The very core of journalism, the value of news – whether monetary, cultural or social – has been put into question in the changing societal context and by the changing consumption patterns of news. As Tim Gardam states, in the foreword to a report examining the shifting economic foundations of news journalism:

What is the future business model for commercial news gathering, and, more fundamentally, what is the future for professional journalism when the price of information has in many places dropped to zero? News today is ambient and access to news is free. ... What is beyond dispute is that the basis of journalism as a transaction, where in the past the many have paid to gain access to the writings of the few, has changed fundamentally. In an age of real time information, and limitless distraction, journalists can no longer assume that their ‘professionalism’ has a secure value.

(Gardam, 2009: 3)

Even though we do not wish to downplay the importance of technological changes, we do wish to stress that these technological changes have gone hand in hand with economic, social, cultural and political changes in the context in which news media operate (see also Rice, 2008: 3). Technology, thus, is only one of the factors ‘threatening professional journalism’; phenomena such as ‘[e]conomic globalization and changes in media outlet ownership and media audiences’ are equally important (Nossek, 2009: 358). However, even though technology is not the sole reason for the current woes of the news industry, the ways in which the technology has been adopted has certainly exacerbated the difficulties it faces.

New media technologies and the abundance of‘news’

When viewing the sustainability of business models, and the value of the product ‘news’, we need to consider what now constitutes the journalism field. With the rise of the internet we have seen a dramatic increase in the types and number of news supp...