So today brings yet another editorial from the journalism world bemoaning the fact that the internet has rendered traditional journalistic outlets unprofitable. And I’m sympathetic to all the people who planned their lives around this profession and are now struggling. It’s always tough when technological progress renders a bunch of jobs obsolete. And we always see the same calls for governmental protection to protect the existing jobs and businesses. The calls for regulation always have some justification but rarely does it involve this level of absurdity. I mean really? You’re going to blame monopolistic practices by Facebook and Google and ask for an exemption from antitrust laws in the same breadth.
If the problem was really some kind of monopolistic pressure from Google and Facebook I’d expect the demand to be to enforce anti-trust law against these companies? The reason that this isn’t the demand is obvious. Companies in the news business aren’t losing money because they must comply with the whims of monopolistic services. They wouldn’t be doing any better if there were 10 popular social networks and 10 major search engines. They are losing money for the simple reason that there are too many companies producing journalistic content online. The internet reduced the transaction costs to access newspaper articles to nearly zero and as long as dozens or hundreds of papers republish the same content people won’t pay for it.
I mean the complaints in the linked editorial aren’t those of a small business being squeezed by a monopolist. They are those of an industry forced to compete for customers. Neither Google or Facebook threatens these news outlets to give them a cut of their online revenue or use their ad-platforms on pain of not being featured on their sites. Indeed, the complaint here is literally the opposite: Google and Facebook are helping people find whatever news sources they want. The ad revenue Google and Facebook generate is a direct consequence of the economic (one can debate the social value) value they bring in terms of search or social networking.
Now one might worry that there will be a social cost if we cut back on the number of news outlets. That’s another discussion but even if so I’m quite wary of letting the news media suck at the government’s teat. I mean if the news industry sees it’s survival as dependent on anti-trust exemptions that makes it dangerously dependent on the continued good will of the government.
As I’ve said before I don’t actually think there is much to worry about. Eventually, the duplicated effort will be cut out of the news industry and we will see a stronger, better kind of investigative reporting rise from the ashes.
Over the past decade, the news business has endured a bloodbath, with tens of thousands of journalists losing their jobs amid mass layoffs. The irony is, more people than ever are consuming news. There’s never been a greater need for factual reporting, from the White House down to the local school board.