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US: Study shows government subsidies to media have declined

US: Study shows government subsidies to media have declined

Newspapers have not only lost significant advertising revenue in the last couple of years, they have also been losing government support in the form of subsidies in the last forty years, concludes a new study by the University of Southern California.

According to Poynter, a new study of historic subsidies and emerging trends tracks various tax breaks, reductions in postal subsidies first enacted in 1792, and upcoming cutbacks in public notices that government regulations have traditionally forced into American newspapers. The study provides valuable insight, if not clear-cut recommendations for print media to follow, about the thorny issue of government funding for media.

As some debate whether government subsidies are essential to the survival of newspapers and if newspapers would still be independent if they accepted such subsidies, the overarching theme of the study seems to be a long history of government subsidies in American newspapers for centuries.

In its coverage of this study, The New York Times reminds us that even though we may be unaware of it, government has been involved from the beginning, and subsidies have been much larger in the past. The study conducted by scholars Geoffrey Cowan and David Westphal stresses that in today's dollars, "government support for newspapers and magazines had fallen to less than $2 billion from more than $4 billion in 1970."

Unfortunately, in the last forty years, this support has been diminishing.

Poynter reports that the study begins with two questions, first, "is a new form of government intervention prudent, and necessary to ensure that Americans have access to the kind of information they need in a democracy?" and second, "if there is such a need, is government capable, amid such overwhelming change in the news business, of making choices that will make things better?"

The US government has been discounting postage rates for publications since 1792, but in the last 40 years, the discount has fallen to less than $300 million from almost $2 billion, according to the NYT . Local governments have also regularly bought notices in local newspapers to notify constituents of public hearings and yearly budgets, but even this kind of support is waning as local governments make the shift towards using their own websites for these announcements.

To frame the discussion of subsidies, Cowan and Westphal's study concludes with a series of suggestions on how to structure the debate of government funding for newspapers.

Firstly, they recommend that government should avoid retarding the emergence of new models of newsgathering, as a large number of innovations are currently taking place in journalism.

Secondly, they advise that government should "help promote innovation" in the same way it did when the U.S. Department of Defense funded he research that created the Internet.

Thirdly, for commercial media, government-supported mechanisms that are content neutral, such as copyright protections, postal subsidies, and taxes - are preferable to those that call upon the government to fund specific news outlets, publications or programs.

So, it seems support to innovation and support for content-neutral mechanisms is what the U.S. government should embrace when approaching the touchy question of government subsidies in journalism. Countries like France have been giving media subsidies for a while and have recently even started subsidizing online news content as well. In the United States, subsidies have been a hot topic, with figures like Rupert Murdoch blatantly expressing their dislike of the presence of the 'heavy hand' of government intervention in media.

But, as newspapers continue to lose more revenue and face closures, will subsidies be the only way to save the newspaper?

Sources: Poynter, The New York Times



Maria Conde


2010-01-28 17:49

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