FTC protects journalism’s past

The Federal Trade Commission has been nosing around how to save journalism and in its just-posted “staff discussion draft” on “potential policy recommendations to support the reinvention of journalism,” it makes its bias clear: The FTC defines journalism as what newspapers do and aligns itself with protecting the old power structure of media.

If the FTC truly wanted to reinvent journalism, the agency would instead align itself with journalism’s disruptors. But there’s none of that here. The clearest evidence: the word “blog” is used but once in 35 pages of text and then only parenthetically as an example of buying ads on topical sites (“e.g., a soccer blog…”); otherwise, it’s only a footnote. The only mention of investing in technology — the agent of disruption — comes on the 35th page (suggesting R&D for tools such as “improved electronic note-taking”). There’s not a hint of seeing a new ecosystem of news emerge — the ecosystem we study and support at CUNY — except as the entry of nonprofit entities that, by their existence, give up on the hope the market will sustain news.

If the FTC truly wanted to rethink journalism and its new opportunities and new value in our democracy, it would have written this document from the perspective of the people it is supposed to represent: the citizens, examining how we can benefit from news that is newly opened to the opportunity of collaboration and greater relevance. Instead, the document is written wholly from the perspective of the companies and institutions of the industry.

The document, like good government work, does a superb job of trying very hard to say very little. From its hearings and research, the staff outlines proposals I find frightening, but many of them are as politically absurd as they are impossible — e.g., what I’ll dub the iPad tax to put a 5% surcharge on consumer electronics to raise $4 billion for public funding of news — and the document doesn’t endorse them.

Still, it’s the document’s perspective that I find essentially corrupt: one old power structure circling its wagons around another. Change? That’s something to be resisted or thwarted, not embraced and enabled. The FTC’s mission in this administration of change — its justification for holding these hearings and doing this work — is to foster competition. Well, the internet is creating new competition in news for the first time since 1950 and the introduction of TV. But the commission focuses solely on newspapers, apologizing that it ignores broadcast — but not even apologizing for ignoring the new ecosystem of news that blogs and technology represent.

“This document will use the perspective of newspapers to exemplify the issues facing journalism as a whole,” the FTC says. And later: “[N]ewspapers 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 policiies that might encourage innovations to help support journalism into the future.” That is, to support newspapers’ survival. There’s the problem.

Among the ideas the FTC presents:

* “Additional intellectual property rights to support claims against news aggregators.” The document even takes on the language of Rupert Murdoch and company describing aggregators as “parasitic.” It espouses their perspective, that search engines and aggregators “use” content when, from my perspective, such use promotes and adds value to that content (and we’ll soon see how Murdoch’s properties do without it). The FTC doesn’t broach the concept of the link economy and the value and distribution created by aggregators — not to mention (and they don’t) that created by recommendations from readers via Twitter and Facebook (neither word appears).

The FTC looks at extending copyright and corralling fair use and also outlines the dangers, ending up with no recommendation, thank goodness. It also looks at proposals to extend the “hot news” doctrine of a 1918 court case by the Associated Press but doesn’t begin to grapple with the definition of hot (Tom Glocer of Reuters says his news has its highest value in its first three miliseconds) and it does acknowledge that news organizations “routinely borrow from each other.” Rip ‘n’ read, it’s called.

What disturbs me most in this section is that the FTC frets about “difficult line-drawing being proprietary facts and those in the public domain.” Proprietary facts? Is it starting down a road of trying to enable someone to own a fact the way the patent office lets someone own a method or our DNA? Good God, that’s dangerous.

* Antitrust exemptions. The FTC looks at allowing news organizations to collude to set prices to consumers and with aggregators. Isn’t that the precise opposite of what an agency charged with protecting competition for the benefit of customers should be considering? Shouldn’t the FTC recoil in horror at such sanctioned antitrust to protect incumbents’ price advantages? Not here.

* Government subsidies. After saluting the history of government subsidies for the press — namely, postal discounts, legal notice publication, assorted tax breaks, and funds for public broadcasting — the agency looks at other ideas: a journalism AmeriCorps paying journalists; increased funding for public broadcasting; a national fund for local news suggested in Columbia’s report on journalism; a tax credit for employing journalists; citizen news vouchers (a la campaign checkoff); grants to universities for reporting. It also looks at increasing the present postal subsidy (which would only further bankrupt the dying postal service in the service of dying publications); using Voice of America and Radio Free Europe content (aka propaganda) in the U.S.; and enabling the SBA to help nonprofits.

* Taxes. At least the FTC acknowledges that somebody’d have to pay for all this. In one section, the FTC looks at licensing the news: having ISPs levy a fee on us that the government then dolls out to its selected news purveyors — call that the internet tax. It’snothing but a tax and it would support incumbents surely. In another section, it examines the aforementioned iPad tax; a tax on the broadcast spectrum; a spectrum auction tax; a tax on ISPs and cell phones; and a tax on advertising (brilliant: taking a cut of the last support of news in America).

* New tax status. The document spends much space looking at ways to make journalism a tax-exempt activity and suggests the IRS should change its regulations to enable that. It also looks at changing tax law to enable hybrid corporations (“benefit” and “flexible purpose” corporations that can judge success on serving a mission and not just maximizing profits) as well as L3Cs.

* Finally, the document looks at the one thing that should be in its purview as a government agency: getting government to make its information open and accessible to view and analyze. Well, amen to that.

I’m quoted in the document from my testimony saying that I am “optimistic to a fault about the future of news and journalism. The barrier to entry into media has never been lower…. But what we do need is a level playing field.” And in a footnote: “If you’re talking about surviving, you’re talking about the perspective of the old, legacy players who had a decade and a half to get their act together, and they didn’t The future of journalism is not institutional, we now know, it is entrepreneurial.”

But this document does nothing to enable that entrepreneurial future. If you want to give somebody tax breaks — and I wouldn’t — give them to those who invest in innovation — whether as disruptors from the outside or as visionaries from the inside. I certainly would not change laws to favor incumbents over those innovators. I see no reason to provide tax subsidies to support an activity that is now a hundredfold more efficient than it used to be. Rather than restricting the flow of information by making it proprietary, I’d argue that it is in the interest of democracy to make it yet freer.

The real problem I see here, again, is the alignment of the legacy institutions of media and government. Here, the internet is not the salvation of news, journalism, and democracy. It’s the other side.

The real advice I gave the FTC is not quoted in the document. It’s this: Get off our lawn.

: DISCLOSURES: This is on my disclosures page, but it can’t hurt to repeat here that I hold stock in (but am not paid by) a platform that aggregates and is used by publishers to link to more content (Daylife). I am advising the company run by the afore-linked visionary, John Paton at Journal Register. I run the project at CUNY that is researching new business models for news. And I blog.

: I cross-posted this on Business Insider and Huffington Post; see also the discussions there.

: Thanks to Scribd, the full document is after the jump….

New FTC Staff Discussion

: 5/5 UPDATE: The FTC is apparently feeling some heat from this heated discussion. Their PR guy sent out a press-release/email:

The Federal Trade Commission has hosted a series of workshops on the Future of Journalism: “How Will Journalism Survive the Internet Age?” Panelists have represented a wide range of views from bloggers such as Search Engine Land and BlogHer to online publishers like ProPublica and the New Haven Independent and traditional media companies such as News Corp. and TheMilwaukee Journal-Sentinel.

On May 24, the FTC released a staff discussion draft in advance of the next workshop on June 15. The discussion draft collects proposals and public comments articulated during previous panel conversations and in reports and articles about the future of journalism. The staff discussion draft states:

“[T]hrough this document, we seek to prompt discussion of whether to recommend policy changes to support the ongoing reinvention of journalism, and, if so, which specific proposals appear most useful, feasible, platform-neutral, resistant to bias, and unlikely to cause unintended consequences in addressing emerging gaps in news coverage.”

The FTC has not endorsed the idea of making any policy recommendation or recommended any of the proposals in the discussion draft.

Recent press reports have erroneously stated that the FTC is supporting and proposing some of the public comments (for example, taxes on electronic devices, favoring one medium over another).

Heh. I stated quite clearly in my post and in my resulting New York Post op-ed that this was a discussion draft and that the staff worked hard to discuss but not endorse. Besides the point. What the FTC chose to discuss — and, more important, not discuss — is all too revealing. They may have invited bloggers to the hearings but there’s no sign of that in their document. They didn’t discuss new disruptors and new technology and new opportunities. They circled the wagons. Rawhide.

  • It looks like we’re seeing a division, intentional or otherwise, in order to create opposing industries. Forcing online journalism to use a new verb to describe its action and function.

    Is this going to amount to the creation of regulared, opposing industries? The legal implication there could be interesting – for example, in Canada, there are opposing laws which limit competition for existing industries, such as tobacco. Specifically, one which disallows setting up a business which exists only to harm people, and another law which disallows the passing of a law which basically shuts down an existing business. It’s very chicken and egg – can’t close down existing tobacco companies, can’t allow new ones to start up.

    Am I far off in seeing this corollary for journalism? Force support for ailing papers, disallow new fields from being protected under journalism laws.

    I hope the FTC does a bit more definition of all parties involved. Otherwise we’ll end up smoking with Murdoch, and bloggers may become the next Legal Pot movement.

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  • Doug

    The bad news of this report is that it shows you that Washington is run amuck with socialists and communists, but the good news is that NONE of these suggestions are constitutional as the whole premise of the FTC violates the First Amendment. November cannot get here soon enough.

    • BS. It proves that Washington is run by Lobbyists and Corporatists. These are Big Business, Big/Old Media interests that the FTC is apparently going to bat for here.

      Leave the Glen Beck rants at home…

      One thing I will say though, the Obama admin. has not looked good on this FTC stuff in that this latest foray as well as the prior FTC ruling on blog disclosure/testimonials show a strong bias for Big Business over the little guy (Bloggers, Solopreneurs, etc.). Add the MMS scandal and it appears there just hasn’t been a lot of time spent on dismantling any of the corporate cronyism since taking office.

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  • As a former newspaper journalist and now publishing Silicon Valley Watcher, I’m looking forward to my share of the $4 billion :)

    • Rick

      Spoken like a true Zionist.

  • Great post, Jeff.

    This is a toothless proposal at the moment, but some of the latter points like allowing newspapers to be organized as different types of tax-exempt corporations could mesh with fresh ideas about creating new entrepreneurial opportunities in the market.

    Case in point: I founded a social network in 2004 and within three months founded a 501(c)(3) to operate it because the purpose of the new platform was clearly educational. Our company proved the case to IRS who gave us approval as a full-fledged charity. Six years ago that process was complex even though we had collected a clear mountain of evidence to support our educational claim.

    So, I like the idea of giving news/education entrepreneurs like myself new tools to build new tools that help improve the knowledge and impact of good journalism. Our vision was seeing a social network as a virtual classroom – and that was a radical concept six years ago.

    So let’s do support all new opportunities that support our journalism habits.

    • I would not oppose laws or regulations to make it easier for news organizations to operate as nonprofits or L3Cs. However, I fear that any legislation to enable that will be part of a multi-headed beast that would include noxious measures that would result in a wholly inappropriate law giving the government too big a role in journalism, focused heavily on protecting newspapers. We have lots of nonprofits functioning effectively in journalism, so I would prefer not to adjust the regulations for nonprofits to opening the Pandora’s box of broad legislation to protect newspapers (no doubt at the expense of digital startups.

      I blogged about this issue here: http://bit.ly/9wuYQo

      • Steve,
        The other issue is that tax exemptions are still de facto tax subsidies and because they are administered by government, government can set rules that then regulate speech — e.g., forbidding not-for-profit news organizations to endorse candidates or lobby …. just at a time when I say news organizations and journalists must be more open about their opinions and advocacy. So danger lies there, too.

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  • A couple of points —

    1. FTC Chairman Jon Leibowitz is married to Ruth Marcus, a longtime editorial writer at the Washington Post. I don’t think this by itself explains the FTC’s sudden interest in saving newspapers, but I think it plays a part.

    2. Under Leibowitz, the Commission has actually become more restrictive with its own information and data. I’ve written and reported on the FTC for 10 years. Under the prior Republican chairmen, I never had any difficulty obtaining spending or case information. That suddenly changed when Leibowitz became chairman and appointed a new general counsel. Now there seems to be a policy of actively discriminating against non-traditional journalists who seek access to basic FTC information.

  • Report says, “Even sites that earn advertising and other revenues typically must supplement those revenues with donations.”

    While The Batavian has received donations, they don’t amount to as much as 1 percent of total revenue.

    I bet my peer publishers would say the same.

  • Report: “Although dozens of newly created online news sites have found sufficient funds to keep going through the early years of their existence, virtually no sites have yet found a sustainable business model that would allow them to survive without some form of funding from non-profit sources.”

    Bull shit.

    • this is precisely the kind of thinking that makes us “newly created news sites” crazy. of course we are finding sustainable biz models. or trying damn hard.
      In fact I just spent a week at the Knight Digital Media Center at USC where this work is on-going.

    • Total BS. We’re using the same model as the newspaper group in our area – advertising. Granted it’s taken time to build up the kind of base as the papers, but we’re seeing our revenue grow while theirs is declining.

      I’m so tired of reading articles or attending forums about the “death” of journalism when what they really mean is the death of newspapers in their current form.

    • I wonder what Josh Marshall, founder of TPM Media, has to say about that particular passage.

      • Yes, the omission of reporting and facts from the FTC is downright shocking. I sat in their hearing room and told them we found news sites making a sustainable living. Others who were doing it were there. Did they not hear or not choose to hear? Without this premise — the market has failed journalism — there is no call for the FTC to act because there’d be no problem for them to solve. The FTC’s willful ignorance has a cause.

      • Jeff, I met with these FTC staffers — in DC. There was no doubt about what I said: The Batavian is advertiser supported and its profitable and growing (heck, we’ve doubled revenue since I was in DC with the FTC).

  • Report: “There are reasons for concern that experimentation may not produce a robust and sustainable business model for commercial journalism. History in the United States shows that readers of the news have never paid anywhere close to the full cost of providing the news.”

    The illogical assumption here is that readers should pay.

  • Report: “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.”

    This is just a smokescreen for government intervention in the free market.

    Free markets being what they are, the free market will find a solution.

    Trust the market.

  • On the hot news doctrine, to change the law would contradict the goals of the FTC effort. By limiting aggregators the ability link to “hot news” the government would thwart the contribution of aggragators to raise awareness of important topics, subverting the goals of a democratic society, which the FTC seems to express some degree of concern for.

  • What’s most alarming about this report is that it completely ignores the free market.

    It talks about subsidies and changes in the law to benefit non-profits.

    Both of these government interventions would be detrimental to the free market.

    Here’s my disclosure: I was invited to and participated in one of the panels that is referenced in this report (I had a nice 24 hours in DC, thank you). I feel like my statements were completely ignored and side stepped. My of my comments, and I might even be remembering this verbatim, was, “I don’t even understand why there are government officials in the room. This is not a government problem to solve. This is a free market problem to solve.”

    For journalism to remain vital to democracy, it must remain free. Any further government intervention will only dilute and dissuade free market innovation.

    Dear Uncle Sam: Butt Out.

  • RIght, Howard (and alert the history books: we agree strongly).

    It is WAY too soon to give up on the market. In print terms, this is 550 years ago. In TV terms, this is 1954.

    The best things government can do are get us all on broadband and encourage a level playing field for innovation and otherwise get lost, eh?

  • Mr. Jarvis,

    Thank you for this post and bringing our attention to the FTC draft! It is important to note that the FTC has called the document “a discussion draft,” which implies that the topic is on the table for further suggestions and comments. That is why it is so great you and other commenters are tackling the question with such passion.

    I am with you when you say that the future of journalism is not “institutional” but “entrepreneurial.” We have witnessed the emergence of various news projects in the digital ecosystem—non-profit, ad-based, subscription-based… Many of their missions are honorable and their approaches innovative. (ProPublica, for instance, just got awarded the Pulitzer for investigative reporting.)

    I would argue that such a diversity of business models should be supported and not thwarted. We are seeing a mix of fresh ideas. Why go back to uniformity?

  • Jim

    If the FTC disappeared tomorrow, would anybody die? Just wondering.

  • David

    I, for one, am not happy that one cent of taxpayer’s hard-earned dollars were used to fund this. The “draft” is, in my opinion, a poster child for government run amock. Is this what we want the Federal Trade Commission, or any branch of government for that matter, to be doing?

    The FTC was formed in the early 20th century to protect consumers AGAINST entrenched monopolies, such as those that have been enjoyed by many traditional media organizations — not to PROTECT them. It was supposed to help start-ups compete against large, monopolistic corporations, not protect the status quo. Talk about losing one’s way.

    The “civil servants” we paid to produce this should be ashamed of themselves. If anyone suggests to you that we can’t cut government spending, tell them to look at this report.

  • This is another example where traditional political labels don’t work. The labels “conservative” and “liberal/progressive” are inaccurate in describing the perspective of the power structure in the D.C. system. The proper title would be something like “preservatives”. Once in power, the established industries who are milking cash cows have an over-riding desire to preserve the status quo. Those doing the disrupting don’t have the time or money to tilt the D.C. playing field to even level the playing field. Whether it is the media, energy, telecommunications or any number of other industries, the incumbent businesses fund the incumbent politicians. The “preservatives” are neither conservative or progressive. They are simply programmed to protect the status quo at the expense of the real job creators in our economy – the entrepreneurs.

    For the record, my local news/info site is another in the growing # sustainable local news enterprises. FTC/DC: Butt out. We don’t need your “help”. Established media doesn’t deserve your help anymore than Sperry, Wang, DEC or countless other business casualties that came from a new wave of companies that out-innovated them. That is called the free market.

    • The problem is that the FTC is programmed to believe its presence is essential to the “free” market. There’s no industry — be it journalism or healthcare or technology — where the FTC (and DOJ Antitrust Division) don’t believe their active presence is required. So when the FTC sees disruption in any industry, its first instinct is to assert a central role for itself.

    • I think I prefer “preservationists”

      • “Preservationists” works for me. Thanks Richard. I just suggested “preservatives” as it had a similar ring to “conservatives” and meant it to inspire other thoughts as it did. Though the FTC purports to support capitalists…it’s only the ones that are trying to preserve their market position to fend off disrupters as long as possible.

        • I rather like preservatives and preservatism for the same reason.

    • Preservationists… that’s good.

      It might be added that often–though not always–the DC press corp is part of that core group, but equally often doesn’t know it, can’t see it, won’t discuss it, and cannot even comprehend a critique that recognizes it. Witness my “exchange” with Gwen Ifill.

      I said this about Washington Week in Review: “The boundaries of political debate in Washington are also the horizons of the discussion on “Washington Week…” I also said we don’t need it anymore.

      She replied thusly. Not naming me or linking to me were petty acts. The important thing to note in her reply was that she literally could not hear the observation about boundaries of political debate and just arbitrarily changed it into… he wants more shouting, well I’m sorry but that’s not the kind of show we are.

      Her perspective is pure preservationist.

  • You want to “save journalism?” Learn from Scott Karp and Publish2 — innovate or die. If you can’t cut it in the marketplace, don’t take your woes to the Gov’t and get special protections — get it together and give people what they want.

    If the Gov’t really wanted to stimulate journalism, they should arrange tax incentives for investment in news startups. Experimentation and innovation is going to save the industry, and honestly, having worked with a lot of new organizations, experimentation is considered extremely risky by many of the players working in news. Gov’t can’t “solve” private industry’s problems, but they could create a marketplace for private industry to find it’s own solutions.

    Other than that, they really have no business playing the space — in fact, I can’t really understand why anyone would want the fourth pillar being funded by the other three: “Here, let me try to prop you up so you can provide me with oversight and legitimization,” government says to news. Anyone see a problem with that?

  • Peter Comings
  • Jeff, your assumption that “technology is the agent of change” needs a second look. When I speak to groups of journalists, I always begin with the damning graph from Gallup examining the question of trust in the press going back to 1970. Clearly, the agent of change is people, for technology didn’t create blogs; people did. Blogs are a reaction to the press that the FTC is trying to protect here, not the cause. The truth is that more Americans distruss the press today than trust it, and that is not the cause of technology.

    • All true, but technology made blogs and craigslist and links possible.

  • Peter Comings,

    Almost got it right. Alas, your link was too long.

    Below is a shorter link to your Google Wave of the FTC Draft Discussion that invites a participatory discourse.


    Brilliant idea, BTW.

    • Peter Comings

      Thanks Robb.

  • Howard, I’d love to hear more of the examples that cause you to call BS on the FTC’s assertions regarding sustainable business models. It would be useful to aggregate and present them on June 15.

    Jeff, Scribd didn’t make the draft is available for journalists to embed on blogs: I uploaded it to allow that service to act as vehicle.

    I did so because I both wanted it to be widely disseminated and to use it myself at the Huffington Post, which I’ve since done. As I wrote there, you’ve focused on the way that the FTC protects journalism’s past.

    I would argue that the FTC also provided a glimpse into one potential journalism future, founded in the release of public data online and open government principles. By commenting on the draft on this blog and then tweeting about it, you provided a public service by amplifying the discussion.

    I agree with you, with respect to subsidizing innovation and providing a tax structure that supports civic entrepreneurs building news startups. The development of innovative ways to spread information and ideas online has been enabled by a lack of regulatory interference and foundation of open standards and frameworks.

    Where you and I disagree, Jeff, is in your assertion that for the FTC, “the internet is not the salvation of news, journalism, and democracy. It’s the other side.” If the discussion draft only consisted only of policy recommendations that endorsed subsidies, taxes and intellectual property protections designed to provide support to legacy players, you’d be spot on.

    As you yourself allowed, however, the final section of the draft goes further than that: “Finally, the document looks at the one thing that should be in its purview as a government agency: getting government to make its information open and accessible to view and analyze. Well, amen to that.”

    As I wrote about at length, the FTC also considered publishing public data online to support the future of journalism.

    It’s important to highlight the deficiencies in these proposals. I would submit, however, that in this historic moment where so many government entities around the world are publishing public data online, media critics, officials and citizens should also focus on the potential of Section IV.

    • Alex,
      (Well I still want to give credit to Scribd.)
      And, as I said to you in Twitter, there’s not much use in doing a literary analysis of words spent on one topic or another. Yes, the FTC calls for more transparency of data as do many, as did I at their hearing. That really has little to do with the media; it is a moral responsibility of government in its relationship with citizens and it can and will happen around and with or without media. Still, I agree that it has an impact on news media and this is one of the things we plan to study at CUNY: the nonmonetary value of both government and corporate transparency and of volunteerism in the news ecosystem. But in this report, that’s really a bit of a by-the-way. There is already a move in government and out to do this; the FTC is jumping on and that’s great but it does not speak to the heart of the FTC’s effort to examine the questions entirely from the perspective of the old institutions.

      • So if someone posts a video of a protest, hearing or natural disaster to YouTube, you’ll thank YouTube instead of the person? Not sure I follow your logic.

        Respectfully, I also object to my comment being categorized as “literary analysis.” I gave weight, links and consideration to your post in my own and shared it liberally. Netiquette aside, posting public data online has PLENTY to do with the media. As the FTC draft itself points out, accurate data feeds from local, state and federal agencies could allow database journalists to create new forms of coverage grounded in stats. Certain data, particularly the bits hitherto locked up at the SEC or FINRA, could be of substantial value for companies that can layer it over other data types, like directories or maps. Given the need for new revenue streams created by the low value of online advertising, that’s not trivial. And given the glacial pace of FOIA requests, not to mention costs to government, publishing public data online also means more information flow about areas of critical public interest.

        Yes, there’s a movement to do this, in and outside of government. Given the FTC’s role and heft, however, the fact that it put such efforts into its draft, quantified them and highlighted a case study isn’t a “by-the-way..” You’re right to use your knowledge and passion to bring focus onto what’s wrong. As I wrote before, it’s also useful to highlight what could be right.

  • lms10045


    It seems to me that in examining the situation with the newspaper industry, we should look at what has happened to the music industry since the disruption to them is a decade old. They have discussed an “internet tax” levied by ISPs as well in addition to wanting a three strikes and you’re out law to stop illegal downloaders. Now you can argue that people file sharing copyrighted material is a far larger grievance from the music industry than “aggregators” (which in my view it is absurd to say it is copyright infringement since it clearly falls within the limit of fair use) are to the newspaper industry. Yet, music companies haven’t had much luck getting action by the U.S. government or the ISPs. So, given that reality, I doubt any of these actions discussed by the FTC are going to happen. It’s all just talk.

    But let’s be clear that although I agree with you that these potential solutions are worse than the problem, we are going to lose something in the coming decade. The music industry (including indie labels) has been cut in half. And it’s not like something has replaced it. This is the reality you need to face. The utopia you thought was going to happen will not come to pass. Yes, the dinosaur MSM will continue to shrink but there will be no great flowering of journalism on the ‘net to swoop in and save the day. There will be examples of great things (just like in music with Radiohead and Trent Reznor striking out on their own) but not something that will replace the system we have had in place for over 50 years. We may have a dark time where Demand Media type outfits will be the only “journalism” to flourish.

    Just something to think about.

    • I’m not so sure we’re going to lose but gain. In our study of the emerging ecosystem of news at CUNY, we envisioned a sustainable local industry with a smaller but equivalent resource that would be closer to and more accountable to the community. We must lose waste: commodity news, ego news, repetition, production. Through the internet, we have gained the means for people to share news and information at a marginal cost of zero. Journalists must add value and I think they will add value. It’s a new economy in a new market. Is there a market demand for journalism? Given the higher use of news I think it’s clear there is. Can the market support that demand? Our work at CUNY believes it can.

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  • We should remember the FTC isn’t the only antitrust regulator trying to protect newspapers. The DOJ’s Antitrust Division recently intervened in West Virginia to force the continued publication of a struggling daily newspaper — on the grounds that readers had a legal right to the paper’s “editorial content.” Quite tellingly, the DOJ did not receive a single public comment questioning its authority or decision-making:


  • Graham Jones

    It’s called Socialism. To the degree that people buy into it, to that degree will they seek to control the media. Pravda, Chazez……………………….

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  • Katy White

    Great post. I’ve been interested in seeing how all of this is going to play out. The effects of compulsion and force (government intervention) are the same in any industry and, as was noted, especially dangerous in the field of journalism. The fact that FTC coloborators are even juggling around the idea of “saving” newspapers via tax exemptions and subsidies should raise a red flag to everyone. By what right does the FTC believe it should waste millions of dollars of tax payers money to resuscitate an outdated product? Why choose stagnation over progress? For the benefit of special (paying) interests and cozy relations, is a simple answer. (Not forgetting that funding=control.)
    “Yes, the omission of reporting and facts from the FTC is downright shocking.”—is it shocking? Because Im not shocked at all. This is the mental blank out that is conveniently used by govt agencies when presented with facts that shed light on their faulty premise. The scary thing is that these people hold the power of force over our heads and yet theyre not even willing to use reality to find a solution to a problem that, in reality, isnt that big of a problem. And just curious, where does the FCC come into play with all of this? or are they sitting this one out?

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  • SomethingNeedsToBeDone

    Something needs to be done, because too many people are getting inaccurate information from very bad blogs and other sources. There are exceptions of course, but now everyone can create a blog, and quality is lacking in the majority. Real journalism requires a set of skills and ethics that many bloggers don’t possess, and that *does* need to be preserved. With real journalism dwindling, and more investigative reporters losing their jobs, we’re becoming a society of ignorant people who merely believe what factions tell us.

    • Andy Freeman

      > Something needs to be done, because too many people are getting inaccurate information from very bad blogs and other sources.

      Since those other sources include “real newspapers” and the like, which are actually worse in that regard, why the special concern wrt blogs?

      > we’re becoming a society of ignorant people who merely believe what factions tell us.

      That started when “legitimate” news outlets started printing press releases.

      Blogs aren’t perfect, but the only substantive difference is that they’re online and they don’t get paid as much. As long as that’s true, don’t expect anyone to care about the demise of “real journalism”.

      > Real journalism requires a set of skills and ethics that many bloggers don’t possess

      Oh really? How many legal journalists have skills comparable to the least capable contributor to http://volokh.com/?

      As far as ethics go, bringing that up shows that you’ve completely lost touch with your audience. The more that you talk about the ideals of profssional journalists, the worse that said journalists look. Why? Because talking about said ideals reminds us how bad professional journalists actually are.

      If you want to folks to care about professional journalism and journalists, start producing something that we care about. And no, we don’t care about your jobs.

      • Tex Lovera


      • Katy White

        i second that!

  • Joe

    Aww sorry jeff and others who think the work of paid professional journalists should be available to anyone to just plagiarize and stick on a website and then call it “news” and make money off the source of the hard work of the paid professional journalist.
    Napster tried that too.
    Maybe you bloggers will have to go out and get a real job now.

  • Joe

    Newspapers are the market traffic leaders in just about every city and town in the country by the way. They’re not dying.

    • No, just their business models.

    • Bill

      Joe’s right – newspaper readership remains strong in local markets – by many measures stronger than ever – but that’s measuring audience, not revenue

      the underlying business model of newspapers – monopoly pricing for access to exclusive or near exclusive marketplaces – is gone, never to return

      the challenge for all MSM outlets is to find business models that are sustainable in a media landscape defined by accountability, competition, and commoditization

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  • Love the bloggers vs. print newspaper dinosaurs. I’ll miss them when they’re gone.

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  • Todd

    Your positions are all well and good, Jeff, but sorry, blogs ain’t news services any more than talking over the back fence was. It’s electronic GOSSIP.

    Invest in electronic and new media? Yes, yes, YES. Kill the biased, anti-journalistic, voice of the White House traditional newspaper? Yes, yes, YES.

    But replace it with blog-based, mostly illiterate “journalism” as the answer to our problems?

    Uh, nope.

    And for the record? VoA and RFE? No more propaganda than CNN or MSNBC, but lefties like you will never admit it, which is yet MORE of the problem.

    • Tex Lovera

      I think the market will decide what “journalism” is, or even if it needs it. And that “market” is made up of millions of individuals each making up to dozens of individual choices each day. Therefore, these definitions of “journalism” are not even static.

      • Katy White

        Exactly. Let the consumers decide what blogs/online sources are best. Let people judge for themselves what meets their standards. And allow the sites who come out on top to be rewarded for their success. When it comes to the internet (and industry in general; but especially the internet), everyone should be shouting “LASSEIZ-NOUS FAIR!!!”

    • lms10045


      I think this is not an ideological fight of left vs. right, and it is distracting to the real issue at hand: how journalism, investigative reporting and local reporting will work as print disappears. Frankly, I am quite happy with the variety of places I can get news and opinion right now. Aren’t you as well? What worries me is that the outlets who have the deep pockets to fund extremely expensive investigative reporting may disappear. What replaces them? You may read more right leaning sites and I may read left leaning sites, but the Big Stories tend to be from Big Media or from a local newspaper that breaks a story with national implications. New Media is getting better at investigative journalism — ProPublica, Texas Tribune, Huffington Post (the investigative wing not the main site), http://www.atlantaunfiltered.com/ — but still the lion’s share is being done by newspapers.

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  • This really would be a dramatic change — as someone who writes about social media from an intellectual property perspective, I suspect that the ways in which this could alter the relationship between information and reader cannot be overstated. In fact, the whole “ethic of the link” could be undermined — though, to be fair, this is all somewhat preliminary from the FTC’s perspective, so we will have to wait to see where this all goes.

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  • Jeff, I share your concerns about some aspects of this FTC document, particularly the items which may rein in fair use of copyrighted materials to create new and original works. Clearly powerful voices weighed in on their research. But when I read this FTC document carefully I see that in fact they do recognize that there are definitely two sides to these issues, and that there are forces that may not require the FTC to take the widespread action on copyright that some are advocating. Some solutions that are in this catch-call document are, in fact, quite interesting. For example, “benefit corporations,” which would be allowed to prioritize goals other than profits alone such as social benefits as their organizing rationale, would be a good way to organize many news corporations. Some of the solutions, such as new taxes, could in fact benefit many social media outlets.

    While in general I agree that less government intervention is better in “correcting” the natural evolution of news out of the hands of large media corporations and back into the hands of entrepreneurs, there are potential dangers to a democratic nation in this transition. Will “old news” lose the ability to report broadly on matters of national concern before “new news” is able to have similar impact? In an era of sensation-driven cable news, perhaps we’ve crossed that divide already – with or without social media. After a decade in which DMCA and CFAA did little to change the fate of news organizations set on maintaining the status quo, it’s clear that insanity would be trying more of the same.

    • Andy Freeman

      > Some solutions that are in this catch-call document are, in fact, quite interesting. For example, “benefit corporations,” which would be allowed to prioritize goals other than profits alone such as social benefits as their organizing rationale, would be a good way to organize many news corporations.

      Nothing is stopping the creation of such organizations, except for funding.

      > Some of the solutions, such as new taxes, could in fact benefit many social media outlets.

      Of course they’d like someone else to pay the bill. And if they can’t get customers, they’ll take goons. And then wonder why they’re treated as toadies.

    • Tex Lovera

      What I’m hearing is a lot of “fear” of a lot of “unknowns” that we must be “protected from”, presumably for our “own good”.

      That is certainly what the MSM would like. Well, tough noogies.

      People will adapt and figure out what sources they trust. Seen the numbers lately on how “trustworthy” the MSM is to the public?? And yet that’s the “model” the FTC wants to preserve????

      Yes, the market will figure it out…

  • What’s needed is a significant lobbying force in Washington to represent new media. In my opinion this lobbying effort needs to start soon to head off the most drastic and reactionary ideas espoused in the FTC document, “Potential policy recommendations to support the reinvention of journalism.”

  • Jeff,

    Agree that the FTC certainly makes its bias clear. Their definition is actually more myopic than “journalism as what newspapers do,” as you’ve distilled — per their original framing, carried through in their staff discussion draft, it all revolves around pay-to-read print dailies. Paid dailies as center of the universe perverts perspective, eclipses competing realities and fosters wacky self-invitations for government involvement. As you duly note, freestanding digital enterprises are given short shrift.

    So are thousands of successful entrepreneurs — local community paper publishers — serving the local news and information needs of their hometowns for years, decades, generations. We thrive precisely where the aforementioned are failing. I address several of the issues raised here in our industry comments in the dueling drama, the FCC’s Future of Media examination: http://scr.bi/dtZkMF

  • end for profit corporate media

    Thank you for the article.

    Just today, I listened to a podcast from, the non-profit media watchdog group, Fairness and Accuracy in Journalism. They discussed the largely the demise of corporate journalism. I personally, could not be happier with the demise of a media that asked no questions in the run up to the Iraq war, who gave us a public who believed Saddam Hussein had something to do with 9/11, and a public where only a 1/3 know that we have three branches of government.

    Blogs (since they were around even during the days after 9/11) haven’t seemed to change this much at all, at least not yet. They do still fall victim to the same fashionable sensationalism and many sources are unchecked, even the New York Times editors admit to putting up their internet articles without checking a reporters sources. My point is that blogs still have their problems. Many of the same problems traditional media have.

    Blogs lack of revenue, as you are well aware, prevents hiring reporters of a professional caliber who have the access to research materials, have the time and the skills to create content that supports a free society. Leaving an opening for ordinary people to participate in public discussion online is absolutely important, and no doubt the greatest gift the internet offers.

    However, it is no match for organizations that can send a reporter to Iraq for an extended stay (something the traditional media itself doesn’t offer any longer as revenue is down).

    The real problem is revenue.

    A real solution would be to begin the funding of public media which buttresses a free society. An anti-government Right Wing Libertarian would compare this to is state run media like Pravda or Goebbels propaganda. I know I think Stalin and Hitler when I think of NPR.

    Which is why I assume you use the shameful example of Free Radio Europe where government funding can go wrong. They were funded primarily by the CIA – – NPR is not, nor is PBS.

    When we look at the list of most free countries by the magazine economists list – you see the top six are countries that have massive amounts of public funding for professional journalism, media and arts.

    Top six: Sweden, Iceland, Netherlands, Norway, Denmark, Finland.


    So before people jump over public media as an instrument of totalitariansim, check out the facts of the matter. Public media insures and buttresses a strong democracy.

    This isn’t to say that journralist need not question power in government, corporations or religious organizations. They do. But the information will be hard to obtarin as long as we do not have outlets that provide for paid full time journalists, to investigate issues that matter to communities at the local, state, and international level. Public funding is a way to provide that need.

    The counterspin episode put out by FAIR can be found here:


    under the title:

    Robert McChesney and John Nichols on The Death and Life of American Journal

    • Andy Freeman

      > a public where only a 1/3 know that we have three branches of government.

      I don’t think that you should blame journalists for that. Public school had 12 years to get across such information.

      > Sweden, Iceland, Netherlands, Norway, Denmark, Finland.

      In other words, Minnesota with a touch of Wisconsin.

      Lots of things work in small Scandanavian populations that don’t work elsewhere or on larger scale.

      > you see the top six are countries that have massive amounts of public funding for professional journalism, media and arts.

      And if you look elsewhere on the list, you see the same thing.

      Sure, you can argue that “massive public funding” isn’t enough, but then you get to explain why the factors that cause it to fail elsewhere won’t also cause it to fail here.

      Note that list position doesn’t tell us anything about absolute values. We don’t know if the gap between 1 and 10 is significant.

      Heck – we don’t even know if the economist’s list makes any sense at all.

    • Andy Freeman

      Speaking of the economist’s lists, their “liveable cities” list has Pittsburgh PA as the top US city.

      How many of you woke up this morning thinking “I want my town to be more like Pittsburgh”? How many of you thought “I want to move to Pittsburgh”? (Answer – not enough, because Pittsburgh is still losing people. However, the rate of loss is decreasing. Then again, that may be because they’re running out of people who can easily leave.)

      I’m not saying that Pittsburgh is a dump. I’m saying that ranking on an economist list is meaningless. We don’t know what they measured, let alone the significance of the difference between different positions.

      However, this does highlight something about journalists. They tend to think that the matter is settled as soon as they have someone to quote. Not even close – that’s where the real work starts.

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  • [J]ournalism always has been subsidized to a large extent by, for example, the federal government, political parties, or advertising.” (emphasis added)

    Umm, advertising isn’t a subsidy, it’s a legitimate revenue stream for publications. You see, the publication offers a service (i.e. print space or air time or the like) so that a business can advertise to potential customers, and in return they are paid for this service.

    It’s amazing and depressing that the Federal Trade Commission sees no substantial difference between a mutual agreement of a trade of services for fee (i.e. capitalism) and government largess. Perhaps this is what is fundamentally wrong in Washington.

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  • If journalism (new or old media) accepts benefits from the FTC i.e. the government, how do we continue our role as the 4th Estate– watchdog? It’s difficult to bite the hand that feeds you.

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  • Journalism is dead. At least, the way we knew it. The net changed all that – for the better. I worked in the industry for 10 years and was shocked at how editors and publishers blatantly ignored the Internet. Having a Web site was just a sidekick they felt they had to do to please a few. Newspapers would NEVER die, they said. The net would. (Yes, some DID say that.)

    It wasn’t until bloggers started making headway – reporting the news that MATTERED to their communities – not what some editor thought was the news – that they had to pay attention. Why? Lost revenues. If the housing marketing hadn’t gone under so badly, they might still be debating whether or not bloggers were making inroads in readers. These bloggers were also scooping them on stories.

    I don’t expect any government agency to stand up for the online readers, bloggers and news publications because they are more honest, more critical and more spot-on. They are especially critical of the government and take more time to research what is going on. Why would the FTC want to support free enterprise online when it allows everyone – including naysayers – to express their POVs or write hard-hitting news stories worthy of awards?

    Increasingly, I look for government regulations of the net to take away freedoms of online bloggers and reporters to “save” the journalism industry – an industry that did itself in much like the financial industry. It’s not our fault they were too stupid or arrogant – or a combination of both – to see the future.

    Also, does anyone else think the FTC took a page from the Associated Press playbook? The AP is cracking down on folks who share their news items. (Obviously they don’t understand social media and how it works, otherwise they’d celebrate that.)

    My two cents – for the mill they are worth! Thanks for sharing. Found this via Twitter.

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  • James Lusk

    Letter to my congressman

    Hello Mr. Flake,

    Recently, the FTC release a document discussing the state of the market for newspapers. However, it draws all the wrong conclusions from the research. Instead of helping people who are innovating and better serving the public, they decided to protect the incumbents and charge ME excess taxes to do it!

    Personally, I don’t like to read papers, or watch mainstream media because they don’t do a good job of being neutral, and most other times they report for sensationalism rather than fact which confuses people for the worse. If people wanted to support the newspapers then the newspapers should get with the program and create content that people want in a way they want it instead of clinging to an antiquated business model.

    This is the opposite of what America stands for. It is socialism to use tax dollars to support the market. I am tired of paying for people who can’t get their business straight. Besides, the newspapers can’t get the facts straight when they are free, why would they get them straight when they are tied to the government, their survival dependent upon government approval. That smells like the creation of a ‘China Daily’ in America and I don’t want my tax dollars to support that.

    Helping with this issue could also be a politically savvy move. Obama payed attention to where the people were going for information, and that got him elected. People are not going to newspapers, so getting on the newspapers’ good side won’t get congressmen elected. Instead, a politician should go where the people are. I would spend my tax dollars and my vote go to people who are supporting things that are better for me and the greater public good…. not to protecting something that can’t survive without the governments help because it is unwilling to evolve. Endangered species should receive assistance as life on earth depends on biodiversity. Life in the free market is pure Darwinism and should be treated as such. Let those who can’t cut it die off so that the better options can flourish.

    Professor Jeff Jarvis describes the situation in a more eloquent way in his article titled: FTC Protects Journalism’s Past.

    If there is any way that this policy can be appealed it should. If not, then new legislation should be drafted to counter/mitigate the effects. I don’t want to have to buy products from people who get the way the world works and be forced to pay those who don’t.

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  • We wanted to approach you in regards to an initiative which may be useful for investigative journalism: Opolis Secure Mail provids free, encrypted email and messaging services, whereby the sender decides what the recipent can actually do with a message and its content. And, the sender can always monitor and track emails (also to whom – if allowed – these were forwarded).
    Our thoughts are in regards to investigative journalists, who may benefit from this application, especially when working on highly sensitive reports. Interestingly enough, the service works from every host PC, and working with Opolis there would not leave any “traces” there either.
    Would be great, if this were of interest to you.
    The Opolis Team is also avail for any questions you may have.

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