When Billionaires Rule

Last summer, the New York Times documented the nightmares of privately operated public services. After emergency services were outsourced to a private company, one woman in Tennessee died as an EMT smoked a cigarette because her company couldn’t get a crew together fast enough; paramedics in New York stole supplies from hospitals because their parent company couldn’t afford them; a man in the South was billed $15,000 after his house burned down because the privatized fire department didn’t arrive. At first glance, the article — entitled “When You Dial 911 and Wall Street Answers” — seemed like a powerful piece of investigative journalism that defended public investment.

But, as blogger Yves Smith pointed out at the time, “despite presenting a litany of horror stories, [the article] never made a case for the fundamental unsuitability of private equity for this type of activity.”

The discourse around journalism’s collapse suffers from a similar problem. Profit seeking distorts the public function that journalists, like first responders, are supposed to perform. Yet too often, finger-wagging at individual billionaires stands in for a systemic critique of the media concentration and profit-making that empowers them.

In 1983, when fifty companies owned the majority of media outlets, Ben Bagdikian warned that monopolistic ownership would smother democracy and impair the public’s understanding of the world.

Today, at the same time local newspapers shut down and cut costs, the combination of increasingly concentrated ownership and for-profit technological innovation has convinced a new generation of billionaires to buy up media outlets and launch new media enterprises.

Some have become the personification of avarice and confused priorities. They purchase a newspaper, gloating about their investment in the public interest, and then offer their newsroom a big shrug as they slash jobs to increase profit margins. Others are philanthropists who support adversarial public interest journalism or inject much-needed cash into shrinking newsrooms.

Yet the problem isn’t the character of individual billionaires per se, but the fact that the political system has allowed such power to accumulate in the first place.

While it matters on some level whether these billionaire-owned or privately funded outlets churn out self-interested coverage (as Sheldon Adelson wants his Las Vegas Review-Journal to do) or critical reporting (as Pierre Omidyar justifiably sees his First Look Media as doing), a journalism dependent on the whims of the wealthy is not a media system worthy of a democracy.

The Advertising Implosion

Most everyone agrees that the advertising-based revenue model for news media has imploded. Where people differ is the effect of that implosion.

Some pundits complain about the contemporary media’s shallowness and sensationalism, casting “disruptive” technologies as the enemy of old-fashioned reporting. Others praise social media — often dubbed “participatory media” — as “democratic” and “open.”

Tom Rosenstiel is firmly in camp two. A future-of-journalism talking head, he praises the shift from the “trust me” Gutenberg era to the “show me” digital age. “What has disrupted us will now begin to save us; the audience will now determine the future of news,” he enthuses.

Since newspaper revenue remains in free fall — classified ads have dropped by 75 percent, and regular ad revenue has plummeted by 40 percent — Rosenstiel argues that consumers have more power than ever. When consumers select the news outlets they prefer — whether they’re old standards or upstarts — advertisers flock to those sites, leaving less popular outlets without revenue.

When Rosenstiel acknowledges the severity of the traditional media’s revenue problem, he offers a standard Silicon Valley prescription: embrace innovation and try new business models. “The thing formerly known as advertising will become tools to help us shop, compare, save,” he argues. The tracking and surveillance used to personalize ads aren’t invasive threats to privacy, but the saving grace for otherwise outmoded news organizations.

Yet this approach has shown itself entirely unable to generate the revenue needed to sustain quality journalism. Many news organizations, like the New York Times, have bulked up their advertising and “digital dissemination” and have still been forced to cut reporters.

It takes lots of resources to produce hard-hitting investigative work. In addition to travel expenses, journalists need to have the time to hit wall after wall, follow leads to dead ends, and generally devote months on end to a single investigative project.

Recently, Mother Jones sent reporter Shane Bauer undercover as a guard to tell the story of life inside a private prison. In an appeal for reader support, the editor and publisher “conservatively” estimated the bill for the thirty-five-thousand-word feature: “counting just the biggest chunks of staff time that went into it, [it cost] roughly $350,000. The banner ads that appeared on the article brought in $5,000, give or take.”

For all of the hype about technology transforming society, the journalism that’s changed society tended to be produced by fiscally sustainable outlets that could afford to take risks. In the digital age, outlets are scrambling or forgoing that work all together.

If traditional journalism is cratering, can social media sites like Facebook fill in the gap? Recent events suggest we should be skeptical.

Last July, Mark Zuckerberg commented on Philando Castile’s death at the hands of police in Minnesota. His post expressed condolences for Castile’s family and hope for a future free of such tragedies, before praising Facebook Live — the platform on which Diamond Reynolds, Castile’s fiancée, streamed the shooting — as evidence that Facebook enables people to “com[e] together to build a more open and connected world.”

A month later, Facebook and its subsidiary Instagram shut down accounts belonging to Korryn Gaines, a Maryland woman shot and killed by police, at the request of the authorities. The following month, The Intercept reported that Facebook is “collaborating with the Israeli Government to determine what should be censored,” actively suppressing the voices of Palestinians and others fighting Israeli occupation.

Whether Facebook sides with the powerful or the powerless — opening windows to democracy or actively shutting them — is up to a company whose raison d’être is profit-making, not disseminating news.

And what a profitable company it’s become. Mark Zuckerberg now ranks as the sixth richest person in the world, worth approximately $44.6 billion. His wealth, of course, comes from the 1.7 billion users who post, click, share, and update, a phenomenon that critics have dubbed “digital sharecropping” or “digital feudalism.”

Simultaneously, thousands of journalists have lost their jobs and newsrooms have been downsized or shuttered, creating a yawning gap between the rich propagators of “digital sharecropping” and reporters, the people who are actually supposed to be the eyes and ears of a democratic information system.

Journalism of the Past

For all the talk of journalism’s bleak future, we don’t hear a lot about its past.

But as Astra Taylor points out in The People’s Platform, the fact that American newspapers leeched off advertising’s fat for a hundred years or so was a lucky break, not some kind of natural law.

The fact is, a mass market for serious reporting has never actually existed; in the United States readers have never paid anywhere near the actual price of news production. Instead, newspapers, by bundling the crossword puzzle and the real estate classified with the metro section and stories about world events, assembled a mass audience that could be sold to advertisers, who provided, on average, about 80 percent of revenue.

Before they came to rely on advertising revenue, newspapers were supported by public subsidies. Robert McChesney and John Nichols chronicle this history in The Death and Life of American Journalism:

While there were rollicking disagreements about the character and content of the post-colonial press in America, the one universally accepted premise was that the government needed to heavily subsidize the creation and development of the press if the constitutional system were to succeed. . . . The idea that Americans should roll the dice and hope rich people would find it profitable to produce the journalism required for a constitutional republic to succeed was simply unimaginable in the days when America was conceived and formed.

Everyone agreed that the government should support a free press because, as communications scholar Timothy E. Cook suggests, the “wide circulation of news throughout the colonies” helped make the “American Revolution possible.”

Early American governments expanded and improved many public institutions that we still rely on today, most notably roads and the postal system. In the 1790s alone, the total mileage of “post roads” increased from 1,875 to 21,000. Over the next few decades, the number of post offices also expanded rapidly.

While the post office did facilitate government and commercial activities, its primary role was transporting newspapers. As McChesney and Nichols recount, the “crucial debate in the Congress of 1792 was at what rate newspapers should be charged to be sent through the mail. All parties agreed that Congress should permit newspapers to be mailed at a price well below actual cost — to be subsidized.”

Between 1792 and 1845, newspapers accounted for as much as 95 percent of the mail and only 15 percent of the postal service’s revenue. “The state nurtured a free-press system the free-market showed little interest in providing; and it did so because, without state intervention on behalf of the public’s right to know, constitutional rule, not to mention self-government, could not succeed,” McChesney and Nichols write.

By the end of the nineteenth century, postal subsidies had effectively ended and advertisers had flocked to newspapers, rendering the old subsidized model obsolete and creating new conflicts between commercial and public interests. These tensions persisted for the next several decades.

Advertisers wanted favorable coverage for their products (and often to advance their own political agenda). Through the Progressive era, McChesney and Nichols note, “writers like Will Irwin and Upton Sinclair deplor[ed] the antidemocratic nature of the advertising-supported, semi-monopolistic press system.”

After World War II, one solution to the problem took hold: the professionalization of journalism. Espoused by the New York Times and virtually every other mainstream outlet, this model demanded that newspapers enforce certain standards of objectivity, sourcing, and fact-checking, and, most importantly, erect a wall between news outlets’ advertising and editorial departments.

The professionalization of journalism — the postwar consensus — also had enormous drawbacks. It pushed the press, and arguably the country, toward the center as journalists prioritized getting “both sides of the story,” trumpeting their neutrality while excluding radical voices. (It continues to prop up lousy journalism that is “fact checked,” “professional,” or “objective.”) But this arrangement pleased advertisers, and the media landscape continued to consolidate.

The dominance of the postwar consensus obscured its fragility. Two things held the whole thing together: the anti-commercialism of newspapers and journalists (who saw the division between reporting and selling as sacrosanct) and the heterogeneity of the media system. Even with increasing concentration, newspapers remained abundant. If a paper lost the public’s trust, readers could pick up another one. It kept newspapers in check.

But with substantially fewer newspapers than a generation ago, and vanishingly few alternative revenue options, new outlets are racing to include advertisers in editorial content. Native advertising — in which advertising masquerades as editorial content “supported by Microsoft” or “in partnership with Toyota” — has become the most prominent of these revenue-generating techniques.

Every newspaper — from the local alt-weekly to the Wall Street Journal — has embraced it. The New York Times has a website devoted to wooing advertisers where it touts its ability to create “brand content and experiences that shape opinion.”

The consequences are more dire than fewer papers and journalists. Last year, The Intercept reported that, during the DNC and RNC conventions, the Hill was selling $200,000 editorial interviews with up to three “industry executives or organizational representatives of your choice.”

Our democracy can’t afford this future of journalism.

A Free Press Isn’t Free

American citizens pay less than $1.50 each for public media. In comparison, Brits spend about $80, and Finns and Danes spend about $100. Anyone who’s read the British tabloids knows the country is no paragon of journalistic excellence. But, as Nichols and McChesney argue, a subsidized Fourth Estate has at least helped foster a healthier democracy, less government corruption, higher civic participation, and a much higher — and more diverse — proportion of the population reading the news.

In the US, because we don’t adequately subsidize public media, PBS and NPR must take corporate advertising (“underwriting”) in order to fill the gap. NPR gets a mere 5 percent of its budget from the local, state, and federal governments, yet receives as much as 19 percent from corporations and another 8 percent from foundations. (Last time I turned on NPR, I learned the show I was listening to was “supported by” Koch Industries.)

While a genuinely public outlet would improve the US media landscape, another, complementary, approach would be to introduce what McChesney and Nichols call a “Citizen News Voucher.” When filing their taxes, citizens could elect to subsidize an independent news outlet of their choice. News outlets would have to maintain a minimum number of subsidizers and would be subject to various restrictions, like forgoing advertising.

By leaving it to citizens to choose the outlets they prefer, the news voucher would empower readers, instead of the state, to decide how the Fourth Estate is funded. It would also buttress independent journalists — not just those who are mouthpieces of the state. As for revenue, taxes on advertising, consumer electronics, or commercial media’s use of public infrastructure (like airwaves) could be used to fund such a program.

These proposals aren’t meant to be definitive, but instead to spark a discussion about public funding that — despite numerous studies from the Federal Trade Commission, Federal Communications Commission, and the advocacy group Free Press — seems virtually nonexistent. Before we can decide on the specifics, we must first acknowledge that the American press is in dire straits and, if we want a vibrant democracy, needs to be subsidized.

Then we’ll have a long road ahead. McChesney told me he thinks Croatia or Scotland will fund a public press before the United States. Our best bet, he argues, is introducing programs at the local or state level.

A robust subsidy for news media will become politically possible when it’s taken up as part of a larger set of reforms designed to win democratic rule: expanding voting rights, funding free higher education, introducing self-government into the workplace.

The Sanders campaign and other popular movements have demonstrated that reforms like these are not only possible, but quite popular. As Trump prepares to enter the White House and resistance movements take shape, the fight for a more democratic media system, long sidelined, must move to the center.