In light of yet another bad week for newspapers, it seems appropriate that a Senate committee held a Future of Journalism hearing. Publisher of the Dallas Morning News Jim Moroney testified there. He explains one idea he raised at the hearing: giving newspapers anti-trust exemption so they can collaborate on pricing and payment schemes.
Somethin That Means SomethinArtist: J Dilla
BROOKE GLADSTONE: And I'm Brooke Gladstone with this week’s bad newspaper news. The New York Times put in place a five percent pay cut. The Boston Globe is hanging by a thread. Even the satirical weekly The Onion wasn't immune. It announced it was shutting down its West Coast print editions. And Warren Buffett said he would not buy a newspaper company at any price. Also this week, the Senate Committee on Commerce, Science and Transportation held a hearing on the future of journalism. Committee Chairman John Kerry kicked it off.
JOHN KERRY: Welcome all to a brave new world. This hearing is genuinely geared to - examine, to understand what we don't know, to try to figure out from various people in these fields of expertise of new media and the existing media of where we're going.
BROOKE GLADSTONE: All-righty. The senators confirmed the importance of the Fourth Estate and the crisis it faces. Senator Ben Cardin stepped up to the mic with a bill that would extend non-profit status to newspapers.
BEN CARDIN: I introduced the Newspaper Revitalization Act. My legislation uses the 501(c)(3) model, similar to what a church would use or what an educational institution would use, a public broadcasting and other non-profits.
BROOKE GLADSTONE: Senator Cardin assured the committee that his plan was not a bailout, just a little boost for the industry. But it came with a few strings attached. Under this bill, news organizations would no longer be able to endorse political candidates. Hm, that seems a little problematic. But don't worry, ‘cause:
BEN CARDIN: It was filed in an effort to create a national debate as to how we can preserve our local news operations.
BROOKE GLADSTONE: In other words, the bill has as good a chance of passage as the newspaper industry has of becoming a hot place to invest your money. Then David Simon, former Baltimore Sun reporter and creator of the HBO series The Wire, took a turn at the mic.
DAVID SIMON: From the captains of the newspaper industry you may hear a certain martyrology, a claim that they were heroically serving democracy, only to be undone by a cataclysmic shift in technology. From those speaking on behalf of new media, Web blogs and that which goes Twitter, you will be treated to assurances that American journalism has a perfectly fine future online and that a great democratization is taking place. Well, a plague on both their houses.
BROOKE GLADSTONE: It was a cinematic smackdown.
DAVID SIMON: High end journalism is dying in America, and unless a new economic model is achieved it will not be reborn on the Web, or anywhere else. The Internet is a marvelous tool, and clearly it is the information delivery system of our future. But thus far it does not deliver much first generation reporting. Instead, it leeches that reporting from mainstream news publications whereupon aggregating websites and bloggers contribute little more than repetition, commentary and froth.
BROOKE GLADSTONE: Sitting next to Simon was the very model of an aggregating blogger, Arianna Huffington.
ARIANNA HUFFINGTON: Actually, if you look at, for example, Voices of San Diego, which is a not-for-profit site that is exposing precisely what you are talking about, local corruption, and actually having real impact investigative journalism, that is happening around the country.
DAVID SIMON: The day I run into a Huffington Post reporter at a Baltimore zoning board hearing is the day that I will be confident that we've actually reached some sort of equilibrium. You know, the next 10 or 15 years in this country are going to be a halcyon era for state and local political corruption. It is going to be one of the great times to be a corrupt politician, all right?
BROOKE GLADSTONE: Then Simon and a newspaper publisher accused Google of essentially stealing their intellectual property. But Google’s Marissa Mayer said Google wasn't stealing; it was helping news outlets get the word out.
MARISSA MAYER: All newspapers and all publishers right now can opt out of aggregation. There are standard industry practices, files that you can put in place that say, please don't collect my content. It is true, though, that most newspapers, in fact, prefer the distribution. The distribution is better for them. It’s also better for users.
BROOKE GLADSTONE: Huffington agreed.
ARIANNA HUFFINGTON; In fact, we are getting hundreds of requests every week from newspapers to link to them. And, and I'm sure they love being linked to from Google, because it drives a lot of traffic.
[TWO SPEAK AT ONCE/OVERTALK]
JOHN KERRY: But isn’t there a greater - It’s a product. It’s created by somebody.
BROOKE GLADSTONE: That’s John Kerry.
JOHN KERRY: It, it is - it’s intellectual property, which we recognize as having a value. Correct?
ARIANNA HUFFINGTON: Absolutely.
JOHN KERRY: Why do they not have a right - why is it antiquated to believe they have a right to be paid for their product?
ARIANNA HUFFINGTON: No, no, no. The fact that are - they wish that was the case is not antiquated. The fact that it cannot happen is antiquated, because that’s not how people are consuming news.
JOHN KERRY: No. Is it, is it -
BROOKE GLADSTONE: Huffington pointed to Times Select, the now-defunct New York Times plan to put some content behind a pay wall as proof that news wants to be free. Not so, says David Simon.
DAVID SIMON: What it showed was that The Times, acting alone, without The Washington Post, without other competitors, could not go it alone.
JIM MORONEY: Mr. Simon’s exactly right. This horse is out of the barn.
BROOKE GLADSTONE: Jim Moroney is the publisher of The Dallas Morning News.
JIM MORONEY: To try to bring it back one website at a time, one daily newspaper website at a time, will not work. If The Dallas Morning News today put up a pay wall over its content, people would go to The Fort Worth Star-Telegram.
BROOKE GLADSTONE: The solution, argued Moroney, David Simon and Alberto Ibarguen, president of the Knight Foundation, is for newspapers to act in unison, whether that means retreating altogether behind a pay wall or collectively negotiating with the likes of Google News. The problem is it’s kind of illegal. Antitrust laws bar competitors from discussing pricing and payment schemes. Moroney challenged Congress to change the law.
JIM MORONEY: Congress should act quickly on legislation providing a limited antitrust exemption that will allow newspapers some breathing room to share ideas and jointly explore innovative business models.
BROOKE GLADSTONE: What an image, media honchos conspiring in a smoke-filled room, just the sort of thing to send thrills up the legs of paranoid media haters. So we called Jim Moroney of The Dallas Morning News and asked him whether his proposed exemption was really in the public’s interest, or just that of newspaper publishers.
JIM MORONEY: Congress decided in the 1970 Failing Newspaper Act that there was a public benefit to maintaining two newspapers in one town as opposed to only one. I am confident that that same idea would extend to having one newspaper in a town, instead of zero newspapers in a town.
BROOKE GLADSTONE: Another charge that was aimed at you at the panel was that you’re impervious to updating or adapting, that you’re clinging to an old business model and an old paper medium and ignoring the march of time.
JIM MORONEY: Dallasnews.com, if we're doing 50 million page views a month and 6 million unique visitors, we're not putting up PDF pages of our newspaper. We are using the same sophisticated technology that’s driving the whole Internet ecosystem. So this charge that we're not investing millions and millions of dollars in our websites and that we're somehow clinging to the past is wrong. The problem is I invest 30 million dollars a year in newsgathering resources at The Dallas Morning News. I don't do 30 million dollars of revenue through Dallasnews.com in a given year. So, if I quit publishing the newspaper tomorrow and went purely digital, what’s going to have to go is a great number of the professional journalists that I employ today. We had a one percent margin in the first quarter for our three operating companies, and our total company, including corporate overhead, lost money. I'm not protecting big margins and I'm not lining the pockets of some executives somewhere with big bonuses. [LAUGHS] We're, we’re trying to survive.
BROOKE GLADSTONE: I think you anticipated my next question. David Simon, who is the creator of The Wire, was in the hearing room with you, and he agreed that newspapers need to reap some financial benefit from their online content, but he also argued that unreasonable executive pay, media concentration that led to huge newspaper chains and created a demand for a profit margin much higher than there used to be, just general greed has led to a decline of journalism. And this is long before Craigslist decimated the classifieds.
JIM MORONEY: Well, I guess I can only say this: If the newspaper companies that may fit David’s paradigm about what they did haven't learned something from the predicament in which they find themselves, then we are really in trouble. I believe that the newspaper companies that perhaps made those kinds of choices in the past will look up and recognize that what has sustained and caused their brand to be durable is the professionally produced journalism that they have. And to continue to diminish that scale of resource is, frankly, a bad business decision, regardless of whether you think it’s a public good or not.
BROOKE GLADSTONE: Now, you testified about your negotiations with Amazon regarding the Kindle electronic reader. Could you tell us about that?
JIM MORONEY: Somebody was bringing up the Kindle as the solution we should all be focused on. And I love the Kindle. I read books on it all the time. My problem is that after negotiating and negotiating and negotiating, the very best deal we could get from Amazon was to split revenues for whatever price we decided to charge. We could get 30 percent of that money. They get 70 percent.
BROOKE GLADSTONE: Wow.
JIM MORONEY: I could have probably lived with that, but there was another clause in there that they would not give me relief on, and that said that they have the right to relicense my content to any portable device, not just an Amazon-owned device, any portable device. In essence, I was giving them a complete licensing agreement for nothing for all of my content, period. I'm sort of – that’s - give away my future, you know. If Amazon came back – I thought maybe they'd call today – and said, do you know what, we'll give up on that little clause about the relicensing of your IP, I would have said, okay, you know what - I'll try this thing at 70/30 and see if it works. But nobody called today, as far as I can tell.
BROOKE GLADSTONE: Well, I can certainly see how a united newspaper front would come in real handy in dealing with Amazon. Tell me, what was the reaction of the senators in the room? Did you get the sense that this was anything other than a futile exercise?
JIM MORONEY: I was very impressed with all of the senators’ comments. What they said out loud, and clearly and plainly, was that they believed that doing the kind of professional journalism that is, to a great degree, done by the newspaper newsrooms of this country is absolutely essential and important to a vibrant democracy. If no one had at least provided the forum for the expression of these sentiments and ideas, I would tell you this: we certainly would be farther behind than we are today.
BROOKE GLADSTONE: Jim, thank you very much.
JIM MORONEY: Well, thank you very much. I appreciate the time to have this conversation.
BROOKE GLADSTONE: Jim Moroney is the publisher of The Dallas Morning News.