Media

Taxpayer cash would harm newspapers while Big Tech cements its grip

If the State wants to help the industry survive, it should take on Facebook and Google

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Mark Paul
Fri Feb 5 2021 - 05:50

Imagine that the output of a particular industry is accepted, even by its critics, as crucial to the functioning of an informed society. Imagine it reaches more people than ever before; that more of them consume and engage with the fruits of its output than in the past. And that the standard bearers of the industry have mostly heavily invested in the latest technologies to reach their market.

That sector ought to be thriving, right?

Then, consider further that the industry is, in fact, not thriving at all. That although its output is so sought after by consumers, and considered so important to all, the sector is in near-terminal decline. Even though the number of people crossing its main players’ digital thresholds has never been higher, those companies are widely accepted as being an endangered species.

Fiscally, it would be like pouring water into a bucket with holes in it – no amount of subsidies can fix that problem

Then consider that all of this is happening while a predatory duopoly of ungovernable titans grows unfathomably rich, in part off the back of the output of the industry’s far smaller, imperilled players. The titans pluck the industry’s output for free and monetise it at enormous scale.

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The duopoly, enabled by its unshakeable reach, then piles on the pressure by hoovering up 80 per cent of one of the main revenue streams that the endangered industry is relying upon to secure its future.

It is perfectly understandable that put-upon companies in that industry would plead with Government for help to survive. But it must be the right kind of help, or there is no point to it at all. The help must not taint the industry’s ability to function independently.

Predators

It also makes little sense economically to expect the State to subsidise the industry while the predators are left unmolested. That would, in effect, be a way of subsidising the titans and of solidifying their grip at taxpayers’ expense.

Fiscally, it would be like pouring water into a bucket with holes in it – no amount of subsidies can fix that problem. It is the market that must be fixed, by breaking the titans’ blatantly unfair competitive death-grip over everybody else.

For that is what is helping to kill the sector, not the absence of taxpayers’ cash.

The industry in question is clearly the media and, more specifically, newspapers, such as the one whose output you are consuming now. The duopoly is Google and Facebook, which make a fortune freely monetising content produced by others, while sucking up €4 out of every €5 spent on Irish digital advertising.

And the siren call for a State bailout is by the newspapers themselves, the latest one coming from The Irish Times Group this week in its submission to the Future of Media Commission.

The submission gave appropriate consideration to the catastrophic contribution of the duopoly – euphemised as Big Tech – to the industry’s woes. It also called for direct State subvention for print journalism to “positively influence the bottom line of news publishers”.

State money should be kept a million miles away from the bottom lines of newspapers, or publications will die anyway from an erosion of public trust in their ability to hold government to account.

It also risks the emergence of a culture of political self-censorship among those who work for newspapers if their livelihoods and financial futures are over-reliant on the whims of the State.

Some may consider that to be hyperbole. But there is a credible danger that political interference would arise because, in the absence of the legal protections afforded to State-funded broadcasters, politicians would be tempted to exploit their financial leverage over newspapers. Politicians are understandably obsessed with the media. They might not be able to help themselves.

The independence of RTÉ and its competitors is enshrined in the 2009 Broadcasting Act. The BBC’s independence is guaranteed by royal charter.

Without similar PPE (political protection equipment) for newspapers, they would be heavily exposed to outside forces. For example, Sinn Féin looks odds-on to be a component of the next government. In the flush of its electoral success last February, one of its ardchomhairle members, Enda Fanning, called for politicians to give themselves "powers" to regulate broadcasting content that he felt was disadvantageous to Sinn Féin.

Imagine what political figures, empowered by financial influence, would say about newspapers if they got the chance?

Billionaires, embittered by the coverage of their affairs, could also be expected to lean on ministers to pull this or that financial lever over newspapers, to weaken the sector’s ability to scrutinise. Even the threat of this intervention could be enough to cause attrition in the free and fair functioning of print journalism.

A minority, a toxic crust, of contributors on social media will always argue, loudly, that newspapers are mere shills for the government. That is an ideological belief. Those who work in media and politics know that it is, mostly, a gross distortion.

Public trust

But how could we credibly argue against the perception if newspapers became reliant on the decisions of government for financial survival?

The potential for the erosion of precious public trust in newspapers is the greatest danger of all with State subvention.

Newspapers should continue the evolution of their business models, with the development of paywalls and direct financial relationships with readers, which have helped many of them to stay afloat in the stormy waters of the past decade. State subventions might seem like an attractive life buoy, but it is filled with lead and eventually would help to sink us, not keep our heads above water.

The Australian government is showing the way in how a state can help newspapers survive. In the face of threats from Facebook and Google, it is driving through legal reforms to force them to pay media outlets for the use of their content. Australia is treating it as an economic competition issue, with the justification that 81 per cent of all digital advertising there is being sucked up by the duopoly.

That is the same share they have of the Irish market, according to recent estimates from advertising agency, Core. The Government here could prove its independence of the State’s foreign investment pin-ups, Google and Facebook, by pursuing similar measures here.

That would also be the safest way to ensure the survival of newspapers while maintaining their independence from those who stalk the corridors of power.

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