FTC Looking At Ways to Sustain Newspaper Journalism

As part of a report draft into the future and sustainability of journalism, the US Federal Trade Commission proposed that, along with other measures, a 5% tax on consumer electronics could be used to subsidise newspapers and journalism.

The proposal, which I should note is just a proposal and “does not represent final conclusions or recommendations by the Commission or FTC staff; it is solely for purposes of discussion”, could mean a tax income of $4 billion. The document (.pdf), which actually goes into the interesting dilemma of how to sustain journalism, also suggests a tax on monthly cell phone bills (but calls it the “least desirable” as it would deter people using cell carriers), an advertising tax equating to $5-6 billion annually and a frequency spectrum tax on commercial programming.

While you might balk at the idea of tax on your consumer electronics, the FTC brings up the historical instances where government taxation has supported journalism. The report cites the the Post Office Act of 1792 which “[charged] less to recipients of newspapers than that charged to the recipients of letters” because of the value of newspaper journalism in spreading information to people “so they might ably discharge their duties as citizens.” The document also notes the tax breaks and the Corporation of Public Broadcasting (CPS) as other governmental support of journalism.

In sum, newspapers have not yet found a new, sustainable business model, and there is reason for concern that such a business model may not emerge. Therefore, it is not too soon to start considering policies that might encourage innovations to help support journalism into the future.

There’s also the advent of the internet which has destroyed the usual bussiness model of selling ads and charging for access to the paper. While people like Rupert Murdoch are going to try and make money with paywalls (especially as online advertising revenue is so low), the problem is that bloggers can often do the work of journalists. We’re a prime example of bloggers who aren’t journalists, but occasionally do journalism and try to act in a journalistic manner. But of course (and unless you’re blind) you will have noticed that videogame journalism is hardly on the level of the New York Times, so relying totally on blogging (at least in the form it exists now) is, frankly, a bad idea.

Sustaining journalism is vitally important to a nation’s democracy. But the question is whether propping up old business models (models invented a long time ago) by taxing new platforms is the right thing to do. Again, all of these suggestions are just here for discussion and are not in any way final proposistions, but the topic is certainly interesting to bloggers as much as it is to newspaper journalists.

Here, time will tell what happens. I think a new model has yet to emerge because right now online adversing is about pure numbers, not about engagement. You, as readers, are intelligent and highly engaged and both interact and shape this website’s discussion, so surely that should be worth more than a lot of brain dead morons who just passively engage?