Newspapers in financial difficulty often have little choice but to scale back news gathering to cut costs.
In many towns and cities in the United States, the newspaper is an endangered species. At least 300 daily papers have stopped publishing over the past 30 years. Those newspapers that have survived are struggling financially. Newspaper circulation has declined steadily for more than 10 years. Average daily circulation is down 2.6 per cent in the last six months alone.
Newspapers have also been hurt by significant cuts in advertising revenue, which accounts for at least 75 per cent of their revenue. Their share of the advertising market has fallen every year for the past decade, while online advertising has increased greatly.
At the heart of all of these facts and figures is the undeniable reality that the media marketplace has changed considerably over the last three decades. In 1975, cable television served fewer than 15 per cent of television households. Satellite TV did not exist. Today, by contrast, fewer than 15 per cent of homes do not subscribe to cable or satellite television. And the internet as we know it today did not even exist in 1975. Now, nearly one-third of all Americans regularly receive news through the internet.
Without newspapers, we would be less informed about our communities and have fewer outlets for the expression of independent thinking and a diversity of viewpoints. The challenge is to restore the viability of newspapers while preserving the core values of a diversity of voices and a commitment to localism in the media marketplace.
Eighteen months ago, the US Federal Communications Commission began a review, ordered by the US Congress and the courts, of its media ownership rules. The commission should modify only one of the four rules under review — the one that bars ownership of both a newspaper and a broadcast TV or radio station in a single market. And the rule should be modified only for the largest markets.
A company that owns a newspaper in one of the 20 largest cities in the country should be permitted to purchase a broadcast TV or radio station in the same market. But a newspaper should be prohibited from buying one of the top four TV stations in its community. In addition, each part of the combined entity would need to maintain its editorial independence.
Beyond giving newspapers in large markets the chance to buy one local TV or radio station, no other ownership rule would be altered. This relatively minor loosening of the ban on cross-ownership of newspapers and TV stations in markets where there are many voices and sufficient competition to allow for new entrants would help strike a balance between ensuring the quality of local news while guarding against too much concentration.
The cross-ownership rule is the only media ownership rule that has never been modified since its inception in the mid-1970s.
Newspapers in financial difficulty often have little choice but to scale back news gathering to cut costs. Allowing cross-ownership may help to forestall the erosion in local news coverage by enabling companies that own both newspapers and broadcast stations to share some costs. Since 2003, when the courts told the commission to change its media ownership rules, the news media industry has operated in a climate of uncertainty. Many newspapers and broadcast stations are operating under waivers of the ban on cross-ownership.
