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Getting creative with the newspaper business

As in: creative accounting:

We’ve had experience in the past – the New York City subways come to mind – with businesses that began as conventional, for-profit corporations, and, for one reason or another, were later rendered unprofitable while still being viewed as essential services. It’s time to apply some creative thinking to newspapers and, for that matter, to serious journalism in other media. Then we need to convince Americans that they should pay attention to it – and pay for it.

Convince as in force people who do not want newspapers to pay for them nevertheless.

I do not know who Steven Rattner is (here are a few clues. His wife is apparently a fundraiser for the Democrats). Nor do I know what the Quadrangle Group, LLC is, of which he is managing principal, whatever that may mean (again, some clues here). But he seems like a fool. The entire essay of which the above recommendation for plunder is the concluding paragraph is about how Americans are becoming less interested in “the news”, and more interested in other things. Which is why, actually, they are less willing to pay for the news than they used to be.

It is also about why tradesmen do not need newspapers any longer to reach potential customers, which is why tradesmen are less willing to pay for newspaper readerships.

That ought to lead to a simple recommendation to potential investors in newspapers. Do not invest in newspapers. Let people tell each other the news for free, for instance by people writing and reading blogs. If some still want the news, then let them read news blogs, which gather together what various different bloggers think is the news.

But Mr Rattner seems to love newspapers. So, seeing no profit in newspapers as a business, he switches to the second-last resort of the scoundrel, a bare-faced claim that the taxpayer owes him and his friends a living. Having ceased to be attractive to mere readers, newspapers must be transformed, by some kind of political hocus pocus, into “essential services”. Like the BBC, if you please. And when all that falls on deaf ears, he will presumably go with the cosmeticised version of the same claim, about how taxpayers should pay for newspapers despite not wanting to read them anymore, because this is their patriotic duty.

14 comments to Getting creative with the newspaper business

  • Reid of America

    Ratner is a big New York City real estate developer. His specialty is getting the government to underwrite his private for profit ventures. He is currently seeking hundreds of millions of dollars from New York City to build a football stadium sports complex in Brooklyn.

    It is no suprise that this rent seeker is asking for government money to bail out newspapers.

  • One of the great things about living in a relatively peaceful western democracy is that one does not HAVE to care about the news.

    Where politics is a matter of life and death one, had better care, and keep up with every report about the new twists in the party line or the mood swings of the local strong man.

  • Uain

    Perhaps the ever declining quality and wonder bread (left wing, politically correct) uniformity of the newspapers might have something to do with why people don’t want to waste their money?

  • Convince as in force people who do not want newspapers to pay for them nevertheless.

    He’s obviously been studying the BBC’s business model.

  • Tom Nelson

    Newspapers are good for us. And we should pay for the efforts of the talented journalists who provide us with the news we need. Imagine an America where no reporters attended city council meetings… sat in on county commission meetings… dogged the cops for information about why your brother is in jail. Imagine an America where no one hounded the president… where no one questioned legislators about their motives… where no one investigated the treatment of wounded soldiers… where no one dug deep into the financial pockets of politicians… where no one questioned the motives of those who pretend to lead. Nothing worthwhile is acquired for free. Journalists deserve to get paid. They and their families need to eat and pay the rent. It’s a supremely lousy idea that news organizations should have anything to do with taxpayer support. Newspapers must make it on their own in the market place, just as do most of us. Not all of us, but still thankfully most of us. Newspapers are actually very profitable enterprises. Some bigger papers have not been nimble enough to adjust well to current realities, but many mid-sized and smaller newspapers are doing just fine with profit margins well into the double digits. Many newspapers are creative and will survive, and we should wish them well so that they can pay reporters and editors to give us not the perfect take on what’s happening in our world, but the best they can, which has been in America the world’s best take. If paid journalism were to fail, Internet news aggregators would have nothing to aggregate, except some few talented bloggers, who I presume would not be willing to sit through a city council meeting without being paid. As for me, I would dread the day that a free and talented press can’t be profitable. The consequences would be less freedom for all Americans.

  • Jack Olson

    When I read Ratner’s column, I took his proposal to be that newspapers should be tax-deductible charities like National Public Radio stations instead of directly tax-supported like the BBC. The United States already does this to some extent. Monthly magazines Atlantic, Harper’s, and the American Enterprise are supported by charitable foundations.

    Since the man who pays the fiddler calls the tune, each magazine is the mouthpiece of the foundation’s board of directors, hence that of he who chose those directors. At least once a year the Atlantic showcases the socialist proposals of the New America foundation. Harpers devotes a lot of ink in its monthly issues to the leftist views of Lewis Lapham, Thomas Frank, and Barbara Ehrenreich. You won’t get far at Reason Magazine or the Heritage Foundation by writing an article in favor of socialized medicine.

    Unfortunately, magazines with an editorial slant designed to reflect elite opinion instead of popular opinion will be inherently unpopular hence permanently unprofitable. What Ratner is really suggesting is that newspapers follow the maqazines’ example and throw in the ink-stained towel.

  • walt moffett

    heaven forbid a business man might have to ponder why his product is not selling.

  • Eamon Brennan

    Its a bit rich for a newspaper man to describe portal’s as serving up bland porridge from wire services when the majority of newspapers pages are taken up by either wire stories or PR pieces (laziness being the overriding characteristic of any journalist).

    Newspapers used to argue that their sheer volume set them apart from TV. I would often be told at college that for a news programme on television to match the output of a single issue of a newspaper, that programme would have to be 70 hours long. If this is correct, then how big would a single newspaper have to be in order to match the wealth of info available at any given time on the internet?

    Eamon

  • Paul Marks

    Sadly Tom Nelson’s comment reflects the world as he thinks it should be – not how it is.

    People such as Bill O’Reilly make a living pointing out how the mainstream media (especially most of the newspapers) do NOT expose the-powers-that-be. For example, Judges let child rapists walk? No story, just do not print it – and attack (as dishonestly as possible) anyone who draws public attention to it.

    Of course they attack President Bush endlessly (he is a Republican and a Christian – two great crimes in the minds of the establishment), but they do NOT attack him for such things as creating new entitlement programs (such as the medicare extention and no-child-left-behind).

    As for wrong doing – newspapers are normally in-the-tank for local and national power elites (the above example was just one of many).

    Stories that show these elites in a bad light are either spiked (remember the motto of the New York Times “All the news thats FIT to print”) or so distorted as to be opposite of the truth.

    Even basic facts in newspapers are likely to be wrong (see all the websites dedicated to pointing out the direct lies in the New York Times alone – and remember that most other American newspapers see the New York Times as their great guide).

    The American press is (with a few exceptions) boring, left wing and dishonest.

    There was a time when all the great cities of the United States had newspapers expressing different points of view. But then the “Progressive” movement came along demanding an “objective”, “scientific” journalism, written by special people educated in “schools of journalism”.

    It has been down hill from there. “Scientific”, “objective” (and so on) where always in the minds of the “Progressives” really just their particular political philosophy (of ever more government programs and regulations) – and this has become gradually more blatent as the decades have past. Nor is just the news and current affairs pages. For example, how many American newspapers employ a conservative as a television critic? “A conservative can not do a cultural job” – oh sure, how open minded.

    These days most American cities (New York is a exception) have one great near monopoly newspaper – linked to local advertisers (such as the city and State governments and politically connected corporations), printing “news” stories to create a demand for more government spending and regulations – and supressing or distorting anything that does not fit.

    Being de facto monopolies the newspapers are also mostly very boring.

    It is not really the rise fo the internet that is destroying American newspapers (although it does not help them) – they are destroying themselves, because they are crap, so fewer and fewer people are paying money to read them.

    May they go bankrupt soon.

  • James Anderson Merritt

    I’m wondering why subways (or, in my part of the world, bus systems) are considered to be “essential services,” if they cannot be run at a profit, or at least break-even. Aren’t customers to decide which services are essential (or how much of a service should be consumed before essential needs are met)?

    In America, it is interesting that the government maintains strict control of the electronic media through the FCC, when we have thousands of radio stations, hundreds of television stations, and hundreds of cable systems (all offering scores of channels). There is no scarcity of spectrum space anymore, so it makes no more sense to license broadcasters than to license newspapers or magazines. It is high time that the electronic media receive its long overdue protection as “free press” under the Constituition, with government no longer acting as gatekeeper to decide who gets the “privilege” of using the airwaves.

  • Midwesterner

    J.A.M.

    Your comment raises an interesting conundrum, how to let market forces get at traffic congestion. It would be an interesting debate to see what the most free market solution is.

    Problem, delivery companies want quick and open access to a city. They are willing to pay a premium to get it.

    But less urgent travellers are apparently content to tie up traffic with their vehicles because of accidental subsidy of inefficient use. That is to say, they are not paying a free market price for access. The access is, in effect, socialized.

    It seems like one possible solution would be to auction vehicle access to the highest bidders. A form of free market congestion charge.

    The more collective solutions include allowing equal (inevitably) subsidized access to all (the present system), or providing ‘free’ subsidized road use optimizing services like buses.

  • Paul Marks

    A lot of people who repeat the old line that “the car makers destroyed the mass transit systems” forget that (for example) G.M. was only able to buy up (and close down) the system in L.A. in 1938 because of government road building – AND government control of the price of tickets (and other regulations).

    If the trolly cars and so on of what was (at the time) the biggest system in the world had been left under the control of their private owners (i.e. no regulations) they would still have been profitable (in spite of the Great Depression) and the owners would not have sold out to G.M.

    It was a similar story in many other cities. First the government made the mass transit systems unprofitable (by a mixture of free road building for cars and massive direct regulation of the privately owned mass transit systems) and then they either closed down – or where taken over by the government (as in New York City).

    This was also true with the railroads. First the Federal government undermined the railroads with price controls and other regulations (and by pro union laws) then (in 1971) it took over the passenger railroads closed most of them down and ran the rest as a political game. This does not even mention the massive Federal road building program.

    There was nothing inevtiable about the modern “car society”, the government made it happen. Whether individual politicians and administrators knew what the effects of their actions would be I do not know – but this was the effect their actions had.

  • >>Ratner is a big New York City real estate developer. His specialty is getting the government to underwrite his private for profit ventures. He is currently seeking hundreds of millions of dollars from New York City to build a football stadium sports complex in Brooklyn.< <

    Don't forget he is big in getting the government to take property by ED for his projects. As far as I am concerned he is thef.

    >>It is no suprise that this rent seeker is asking for government money to bail out newspapers.<<

    Especially since the new headquarters for the New York Times was one of his most recent projects. Yes, he steal the land for that too. Ever wonder why the Times never protests against ED takings? Now you know, because they are on the take.

  • Paul Marks

    So the declining New York Times has spashed out on a new H.Q. building – even with stolen land it would still have cost them a lot of money.

    I wonder if this is an example of one of C. Norhcote Parkenson’s laws at work?

    I would love to think it was. I will not live to see the end of the vile New York Times, but I very stongly hope that others here do.