Australia’s newspaper crisis is a failure of the market, not journalism

Most reporting still comes from a newspaper: Australia’s media troubles come from a failing commercial model, not a journalistic one.

“Perhaps the single most dishonest aspect of the New Right’s campaign has been its attempt to rubbish and discredit the public sector.”

That’s Keith Windschuttle in his excellent 1983 book, The Media, a volume that while obviously dated, offers important context for understanding the current crisis in Australian newspapers.

Democratic rule depends on an informed citizenry. The complexities of the modern world cannot be conveyed adequately through TV or radio soundbites, and so without the longer, more in-depth reports currently provided by broadsheet papers, we’ll lack information necessary to participate in political life. The internet might be awash with commentary and analysis but few websites can fund an old-style newsroom. Most online journalism still rests on reporting done elsewhere – and, very often, that elsewhere is a newspaper.

All of that is why the turmoil at Fairfax matters.

But most discussions of the current imbroglio fail to distinguish adequately between the social and the commercial function of newspapers, two quite different points. The business of broadsheets might be in crisis but there’s absolutely no crisis in the service they provide. It’s the owners of newspapers who are tied to print, not the journalists themselves. On the contrary, the digital revolution makes gathering and transmitting information easier than ever before in human history. There’s no necessary relationship between quality journalism and print – only an economic and historical one.

We’re faced, in other words, with a failure of the market, not a failure of journalism.

Business Spectator’s Alan Kohler puts it like this:

The fact is that the size of newsrooms is shrinking and in my view this is the issue that should be addressed. How many journalists are needed in Australia to properly report on national and local affairs? Unlike the production of aluminium ingots, everyone is agreed that this is a truly important function and that if it were not done, or were done less well, the nation would suffer. Yet it is being left entirely to the market to sort out how many people will perform this function.

Kohler, who announced last week that Business Spectator had been bought by News Ltd for an undisclosed sum (variously reported at between $22 million and $30 million) suggests - semi-facetiously - a bailout for journalists akin to that offered to Alcoa.

But, actually, that’s not a silly idea. The real problem is that it doesn’t go far enough.

After all, we’ve been here before.

Back in the early days of radio, it became apparent that commercial broadcasters would not use the medium to its full advantage. You could make money providing light entertainment to the cities but there was no profit in offering quality news to rural Australia. That’s how we ended up with the Australian Broadcasting Corporation: to ensure all Australians could enjoy radio to its full potential.

Likewise with television. Everyone knows that, left to its own devices, the market would never deliver the broadcasting the ABC offers. Precisely because we think TV matters, we don’t simply trust the benevolence of commercial operators. Instead, we fund a public option, because we know we can’t rely on the market.

And, by and large, it works. Despite the efforts of hysterical ideological critics, nine out of ten Australians think the ABC provides a valuable service - about as close to a consensus as you’re ever going to get.

Why, then, are we so willing to leave journalism to the market’s tender mercies? Surely the obvious response to the current crisis is to expand the ABC, extending its operations to fund the quality journalism the newspapers can no longer provide. With extra staff and extra resources, the ABC could quickly and easily provide the kind of journalism for which we once relied exclusively on the press.

The advantages are manifold. The technology that so threatens the commercial logic of Fairfax and News Ltd poses no problem for publicly funded journalism. Where the commercial media companies see the internet as a problem, an expanded ABC could devote resources to devising new ways to spread information, rather than hamstringing the web via paywalls and the like.

A properly resourced ABC could provide material from regional Australia, embark on investigative reports and pursue stories that were important but not necessarily sexy. It could, in other words, do all the things the broadsheets are increasingly failing at, even as it offered some much-needed jobs for reporters.

This is neither a new idea, nor a particularly radical one.

For years, Federal Labor advocated an ABC-style newspaper – as Gough Whitlam put it, the party sought “national newspapers and journals which would share the news and cultural services of the Australian Broadcasting Commission and which would give Australians the same choice of news and views in their newspapers as they expect in their radio and television”.

Technological change makes Whitlam’s proposal much more viable than ever before. The infrastructure’s already there: the ABC website is one of the most popular in the nation. With no need for paper, the costs would largely lie in hiring new journalists – and, god knows, there’s enough unemployed reporters available.

The problems, of course, are not technical but entirely political. As Windschuttle was already arguing back in 1983, a sustained attack on public ownership has meant alternatives to private businesses seem politically toxic. Nowhere is this more apparent than in the world of media. In the UK, for instance, James Murdoch has publicly denounced the BBC on the basis that state-funded news provided freely to consumers posed a threat to online journalism because it undermined “commercial viability”, and thus let “independence and plurality wither”. Here, News Ltd CEO Kim Williams says he’s “troubled” by the ABC’s expansion online.

Their chutzpah is extraordinary.

As Windschuttle argues: “The Australian media are among the staunchest of this country’s defenders of private enterprise and the "free market”. Yet the great virtues that are claimed for this system – the sovereignty of the consumer, the efficiencies of competition, the market open to talented new entrants – are nowhere more lacking than in the structure of the media business itself.“

You and I cannot launch our own newspaper empires to compete independently with the Murdoch press. Media ownership in Australia is so concentrated to be almost feudal – all of the main players (the Murdochs, the Fairfaxes, Gina Rinehart) owe their status to a dynastic succession. Amidst these huge monopolies, an expanded state sector would offer more choice, not less.

Isn’t there something innately sinister about state-owned media? Well, we’ve had ABC TV and radio for decades, and we’re not living under totalitarianism just yet. Indeed, surveys show most people trust the ABC more than its commercial rivals, and for good reason. Whatever might be wrong with Auntie, no-one’s implicated ABC employees in a widespread campaign of phone taps and corruption.

Naturally, in a democracy, all media should always be closely scrutinised. But, actually, it’s far easier to hold the public sector to account than a newspaper published by a multinational corporation. Could you imagine News Ltd scrutinising itself with the intensity that Media Watch has sometimes gone after, say, the 7.30 Report?

In today’s world, information is a public good. It’s a service we need, just as much as we need roads and hospitals. If the private sector won’t provide it, the public sector must, however much that makes the self-interested media barons squeal.