How to Pay For Real News

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Our nation’s present uproar over the deleterious effects of social media on society and fretting about the decline of trusted news outlets is nothing new. What’s new is the fact that the straightforward ways to prop up the Real Journalism industry have never been more obvious.

For two decades, professional thinkers—most of them employed in legacy media—have been publicly worrying about what the internet might do to legacy media. There has always been a sizable dose of self-interest in this concern, but it does also involve a legitimate matter of public interest. A healthy democratic society needs a healthy supply of news to serve as a check on powerful people and institutions. It’s that simple. It is a public good. Seen through the prism of public interest, it does not so much matter whether that news is in a newspaper or on the internet or somewhere else, but it does matter that that news exists. Media people making apocalyptic predictions about what will happen if their particular job is replaced by one in another medium has always been worth rolling your eyes at. But apocalyptic predictions about what will happen when news outlets and journalists disappear from particular cities or states or fields of coverage are worth taking very, very seriously. If, to take the most obvious example, nobody figures out how to continue producing quality local news in cities across the country, you can rest assured that the public’s civic engagement will decrease and government corruption and self-dealing will increase. Drastically. That is very bad.

For a while, in the innocent early days of online news sites, everyone was convinced that print media was being cannibalized by blogs and such. Ha. What both sides of that argument have come to rudely learn is that everyone in journalism is being stepped on by a much bigger force: Facebook and Google, which now suck up the vast majority of online ad revenue. Everyone else—the actual news outlets—competes for the leftover crumbs. Predictably, this has hobbled the ability of news outlets of all types to employ enough journalists to adequately cover the local and regional and national news. Instead of the simple migration of journalism jobs from print media outlets to online media outlets, we have gotten the outright destruction of journalism jobs as revenue moves out of the media industry and into the tech industry. The platforms that have made themselves necessary for the distribution of news are taking in vastly more money than those that create the news. This mismatch is at the heart of the disappearance of local news. No one has figured out how to solve it.


Perhaps we have reached an opportune time for a big solution. Facebook (and, to a lesser extent, Google) are today as unpopular as they have ever been, as people wake up to the very real and terrifying implications of having two ultra-powerful, ultra-wealthy, unaccountable technology companies controlling every single piece of data about each and every human on the internet. The appetite to somehow rein in these companies is stronger than ever. Likewise, the desire of these companies to make a grand gesture to reassure the public about their good intentions is stronger than ever as well. For the media, this is the time to strike.


The basic argument is this: Journalism is a public good. If we want journalism to survive and thrive, we need to pay for it somehow. The operating model that paid for journalism throughout the past century—direct funding from advertisers and subscribers—is broken. Tech broke it. Broadly speaking, much of the money that used to support journalism now sits in the bank accounts of Facebook and Google. Take the money back and use it to support journalism. It’s not that complicated.

Besides “all citizens of our democracy,” do you know who else depends on the existence of a robust news industry? Facebook and Google. Distribution of news is a key part of their business models. In order for that to continue, news itself must continue. It is in the self interest of these companies to perpetuate a healthy amount of journalism across America. And the money involved in doing so is not enough to bother them.


At its peak in 2005, the entire U.S. newspaper industry took in about $50 billion in revenue. Today, the entire industry produces well under $20 billion in revenue. (This is not an argument for propping up the newspaper industry per se, but it is the easiest proxy for the change in the journalism industry itself.) During that same period, newspaper newsroom employment has sunk from close to 70,000 to just 40,000. Some of that lost revenue and employment has moved to new media outlets, but not all. And, as demonstrated by the fact that all of the large, successful new media outlets are national in scale, nowhere has the negative impact of these losses been felt more than in state and local news coverage. The reporters doing the civically important work of covering the day-to-day operations of our government and other powerful institutions are the ones most in danger of disappearing because their news outlets can no longer pay for them.

Facebook’s total revenue last year was $40.6 billion—more than double that of the entire national newspaper industry. Alphabet, the parent company of Google, had revenues last year of $111 billion. As we have discussed, some of those revenues are derived by selling advertising against the sharing of news that these companies did not fund. The news media is bearing the cost, but not sharing all of the gains, of producing journalism. This can be fixed on the back end. Facebook and Google can each contribute a relatively small portion of their annual revenue—say, a couple billion dollars each—to a separate entity that is a fund for journalism. This independent, nonprofit fund can then distribute those funds for the purpose of the creation of journalism. There are plenty of ways that could be done: You could develop a formula based on audience size and then distribute the money to existing media outlets; you could earmark the money for specific coverage areas, and let news organizations apply for grants; or you could directly employ journalists through the fund and make their work available to existing news outlets for free. Regardless, the result would be healthy funding for exactly the types of civically important journalism that have been hollowed out and destroyed by the change in the media business model that has made the founders of Google and Facebook spectacularly wealthy and increasingly loathed.


You could accomplish this sort of redistribution of wealth through the tax code, via a tax designed to take from any platform that distributes news without paying for it, and plow the money back into the creation of news. (A standing tax would also have the benefit of being there for whatever platforms eventually rise up to replace the ones that are currently dominant.) But if Facebook and Google are really as smart as they claim to be, they would get ahead of the curve and start something like this themselves. By doing so, they could legitimately lay claim to being “part of the solution”—not to mention the fact that directly funding public service journalism might be the single most inarguably beneficial business activity they would be engaging in. (You may eventually see tech companies just buying up big media companies, but that solution has its own obvious potential drawbacks.) It has always blown my mind that big, successful tech companies do not directly fund journalism. It’s cheap, it’s good for the country, and it helps to perpetuate the demonstrably successful business model that has gotten the companies this far already. These companies make billions of dollars in part by inserting themselves between the demand for news and its supply. Pay up, motherfuckers. The only thing certain is that if you don’t, you will one day wish that you had.