How to Save Journalism: Part III

03/22/2010 05:12 am ET | Updated May 25, 2011

In Part I I suggested that a $10 billion foundation be set up to save responsible journalism and that The NY Times be wrested away from the Sulzberger family, put into bankruptcy, and emerge as a mean and lean non-profit organization with the purpose of producing great journalism that makes citizens more informed, not with the purpose of creating profits to make stockholders wealthier.

In Part II I suggested that The NY Times and other important newspapers had to realize that journalism was not about union-feather-bedded printing presses and distribution systems and that these papers had to start charging for content. One way to get paid for their content was to make a deal with Microsoft's search engine Bing to pay them for links to their content and block Google from linking to it free. They can also charge based on a Wall Street Journal-type subscription model or a Financial Times-type metered model. (The Times has decided on a metered model and will start charging in 2011.)

But saving journalism needs more than getting funding from a foundation, being lean non-profit organizations, and getting paid for content, either from subscribers or from Bing. It needs financial support from local communities similar to what NPR and its local affiliates receive and to be given increased financial support from local communities and the Federal government in the form of subsidies and tax breaks.

In the January 25, issue of The Nation, communication scholar Robert McChesney and The Nation Washington correspondent John Nichols wrote an article titled "How to Save Journalism" in which they made a logical case for government subsidies.

The authors suggest that the Internet is not the answer to saving journalism: "There is no business model or combination of business models that will create a journalistic renaissance on the web. Even if the market and new technologies were to eventually solve journalism's problems, the notion that we must go without journalism for a decade or two while Wall Street figures out how to make a buck strikes us, frankly, as suicidal."

They also write: "House Energy and Commerce Committee chair Henry Waxman was right when he told December's FTC workshop on journalism, "This is a policy issue. Government is going to have to be involved in one way or another. Journalism, like other public goods, is going to require substantial public subsidy if it is to exist at a level necessary for self-government to succeed. The question, then, is not, Should there be subsidies? but, How do we get subsidies right?""

The Founding Fathers knew the importance of a free press and an informed citizenry, which is why they set up the system that the Post Office delivered newspapers free and give publishers subsidies in the form of paying them to print public and legal notices. So, subsidies are nothing new.

Another way journalism outlets (we've got to stop calling them newspapers because they must be on the Web, not printed on paper) can increase revenue is to do what music companies are now doing - making 360 deals with talent. The music industry was decimated by file sharing on the Internet and by Apple's iTunes and iPods, so record companies cut way back pressing CDs and selling them in record stores and found other outlets such as Starbucks. Today, when record companies sign new artists and agree to promote them, the companies insist that the talent sign a 360 deal that gives the record company a cut of all the money an artist makes in concerts, T-shirts, and other gear and peripheral items - anywhere and everywhere - 360º in other words.

So, for example, The NY Times could sign a deal with Frank Rich in which Rich agrees to give The Times a percentage cut of his off-the-job income from such items as speeches, books, and consulting gigs. The notion driving this concept is that Rich wouldn't be famous and highly sought after if it weren't for his exposure in The Times. He might be Rich, but he wouldn't be wealthy if he wrote for the Point Reyes Light, even though it won a Pulitzer Prize.

Journalism outlets could do events and conferences that don't appear to be influence peddling; their book reviewers could host book clubs and author readings, their movie reviewers could host movie preview events and discussions, their restaurant and food critics could host events and tastings, and cooking classes.

My wife, Julia, and I paid $75 each for a Dim Sum tour of New York's Chinatown from the Institute of Culinary Education (ICE). We enjoyed it thoroughly and the guide, expert cook and teacher, Norm Weinstein, was terrific. But we would probably pay twice as much for a similar tour sponsored by The Times.

The Times and other newspapers in their state of journalistic head-in-the-sand ostrichitis would probably say that they are in the news business, not the tour or the event or the education business and that they have to remain "pure." But they have forgotten what Harvard Business School's Theodore Levitt said about the railroad business - that the railroads went out of business because they mistakenly thought they were in the railroad business.

Newspapers think like buggy whip makers thought in 1908, that they were in the buggy-whip business, but their business was killed by the automobile. If they had re-defined their businesses as the vehicle acceleration business, they might have survived. Newspapers need to similarly re-define their businesses and find multiple revenue streams to support their journalism.

These news outlets also need to exploit the new e-reader technology, as suggested by Alan Mutter in his Reflections of a Newsosaur blog on January 8 in a post titled "Holy Moses! Media need to gear up for tablets."

The point is that journalism outlets have to explore multiple revenue streams, including government subsidies.