End of the news media as we know it?

Turmoil in Australian news media is the thin end of the wedge

One of the pithier definitions of news is, ‘something that someone somewhere doesn’t want you to know’. That someone is usually in a position of power – either in government or in business – and what they don’t want you to know is some shady stuff that has been done at your cost.

It is no surprise that the powers that be – whether government or business – so often find themselves at loggerheads with the news media. Most politicians and businesspeople are of the view that the news media is a necessary evil that has to be lived with.

History is littered with instances of politically motivated muzzling of the media with methods ranging from financial and physical coercion to the enactment of legislation heavily loaded against libertarian freedoms, mainly targeting the freedom of expression, leading to censorship in many guises.

Less obvious is the influence that big business wields over the news media. Big spenders of advertising dollars have mastered the fine art of extracting their pound of flesh in terms of gaining favourable exposure – while getting the media to gloss over what would seem unfavourable – by leveraging their huge ad spend, which indeed is the lifeblood of the news media. The influence of big money has muscled its way to the front pages. And quite literally, too: think how often these days you see a highly paid for advertising wraparound concealing the front page of a newspaper under a faux masthead.

The burning desire to control the media has traditionally been associated with politics and politicians – not so much business and businesspeople. However, that is about to change, as we are seeing it unfold in Australia – but more about that, a little later in the piece.

The Fourth Estate’s vulnerability

By its very nature, the Fourth Estate, which is supposed to be the independent guardian of common people’s interests, is fraught. It does not have the same locus standi that the three estates or pillars – legislature, executive and judiciary – of democracy have. In that sense it is powerless. But then, it derives whatever semblance of the power it has from the people – by virtue of being a guardian of their interests and keeping a hawk’s eye on the goings on in the dealings of the three estates and the effective separation of their powers, which is the very essence of democracy.

The ideal, dispassionate, independent news organisation would therefore be one that would be completely supported by subscription and newsstand sales, paid individually by readers. This, like most ideal stuff, has never been possible and a news organisation is simply unviable commercially without advertising or some form of government subsidy (as in the case of broadcast media in many countries around the world, including developed nations).

Never viable as a solely subscriber supported enterprise, the dependence of the news media on advertisers has grown exponentially over the decades. The advent of the internet, especially since the 1990s, has exacerbated that dependence, not least because the world’s news media fell over one another in a mindless scramble to give all content away free.

That decision to give it away free even further alienated the tenuous financial support the news media received from end users or news consumers, increasing their dependence on advertising dollars while at the same time having to deal with falling circulations and concomitant sliding advertising revenue.

The ease of accessing news from a variety of sources on a range of digital devices at no cost has sounded the death knell of the news media, as we have known it. The virtual elimination of subscriber supported revenue streams and the complete dependence of the news media on advertising dollars has greatly compromised its independence.

This realisation has come in too late and the news media is once again scrambling, falling over one another to erect ‘paywalls’ so that subscribers pay for what they read, watch and listen. Leading news organisations around the world have been experimenting with various models but none seems to have hit upon a scheme that works satisfactorily. Twenty years of free news content from multiple sources has all but nullified brand loyalty and it is hard to convince people to pay for what they have been used to getting free for two decades.

Big turmoil in Australian media

Most big news organisations are deeply in the red and the fact that their traditional business model is coming unstuck is borne out from what has happened in the Australian news media last month.

Fairfax, among the country’s largest media houses and the publisher of the Sydney Morning Herald and the Age, announced plans to cut 1900 jobs and shut down two printing plants over three years. The two leading newspapers will cease to be broadsheets and will be in a smaller ‘compact’ size (the editors-in-chief of the two papers have also announced their decision to step down). Fairfax’s share price has seen a precipitous drop of 85% in the past five years.

The company has also announced that it will start charging for content, following in the footsteps of its big rival, News Limited, which also, incidentally, announced big job cuts in its Australian operations last month.

Meanwhile, the bigger story in Australian media that has repercussions on all big media houses around the world and perhaps portends the shape of things to come is the acquisition of nearly 19 per cent of the stake in Fairfax by Australia’s richest woman and mining magnate, Gina Rinehart.

Ms Rinehart is reported to have asked for a say in the appointment of directors on the board and also reportedly refused to sign a document that guarantees editorial independence. Her group has indicated that it may sell the stake if conditions are not met. Also, it is well known that Ms Rinehart is opposed to the Australian government’s carbon tax regime and mining policies that are seen as restrictive by the industry. It is clear in her acquisition and recent statements that she would like control on media content and opinion.

Australia’s Communications Minister Stephen Conroy said this would lead to a “crisis of confidence among the readership” and the developments have worried Treasurer Wayne Swan enough say, “I think that has very big implications for our democracy, I think we should all be very concerned at this turn of events.”

It is interesting to see what was widely touted as the very bastions of free media that didn’t bat an eyelid before condemning attempts at media control in poorer countries around the region are now under threat of losing independence to vested interests powered by big money.

The advent of digital media and the entry of big money are set to change the face of the news media forever. What won’t change is that clever definition of news we began with: something that someone somewhere doesn’t want you to know – except that such concealment won’t even serve the purpose of the proverbial fig leaf.

First appeared in Islands Business, July 2012

1 thought on “End of the news media as we know it?”

  1. I don’t know whether this is good or bad, but editorializing news reports seems to be more successful than plain stating of facts. I have been brought up with the five Ws and the H and stating of confirmed facts. Because I could not write certain news items which ran contrary to the owners policies, I decided to leave the newspaper line and start a website of my own, where I could publish the news I felt should go out. My early efforts were earnest and toed the line of all the tenets of good journalism. But new media tends to get your readers giving their points of view almost as soon as the news item was uploaded. This was unsettling because you realized that reports are actually follow-ups of a story that began long ago.
    I noticed a gradual change in my writing where I would editorialize the report. This went over extremely well with the readers. The number of unique IDs increases every month, not by leaps and bounds but by 500 to a 1000 new readers. That is extremely satisfying since I seem to have hit on a formula which works, at least for now.
    New media comes with challenges of its own, but by and large it is the swiftest of all media. It can change as the story unfolds and even if the report takes an entirely different trajectory it is still avidly consumed by readers. The best part of it is readers also contribute with their comments, exploring different angles, questioning, adding more facts. It results in a well-rounded piece of information that is put out for public consumption. The fluidity of new media puts it in a position of power as a dispenser of information as against newspapers and television channels.

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