Several observers have noted that the media could be witnessing a “kodak moment”, which despite being a 20th century pioneer in the photography business, fell by the wayside. Kodak failed to cope with emerging digital photography and competition, which saw consumers ultimately preferring smart phones to snap pictures. Eventually, the company filed for bankruptcy in 2012 and that was the end of it. Similarly, it seems journalism is collapsing. The media lay offs and loss of advertising revenue paint a dim picture. In my recent conversation with Mmegi editor Ryder Gabathuse, he bemoaned this topic at great length. I recall telling him that the entire media business from print, TV, digital media, radio, and podcasts will not be spared particularly with a reduction in audiences. I couldn’t agree more with the argument by one, Victor Pickard, Associate Professor at the University of Pennsylvanian Annenberg School for Communication, in his article, “Journalism’s Market Failure Is a Crisis For Democracy.” Sharing the context of the US, Pickard noted that journalism had failed in the US, which will likely affect the overall function of democracy.
Pickard argues that: “This crisis arose because the news media’s commercial imperatives never fully aligned with democratic objectives. The market simply cannot support the levels of journalism — especially local, but also international, policy, and investigative reporting — that a healthy democracy requires. Arguably, this has always been the case, but it is especially true today, as newspapers are hollowed out or closed down across the country, leaving vast news deserts in their wake. All of us who wish for a democratic future — including the business community — have a stake in ensuring that local news media survives. We must come together to build a media ecosystem that treats journalism as an essential public service.” Diagnosing the market failure, the media scholar underscored that for the better part of the 20th century, the media relied on the traditional advertising model, which saw commercial newspapers derive “80% from advertising and 20% from readers.” Interestingly, the researcher makes quite an interesting observation that for the better part of the period the advertising model worked, advertisers were not as much interested in democracy as the media itself. He posits that advertisers were not concerned much about what is of public concern. To add to this analogy, for instance, would they care that a local health facility did not have medicine? Or that the education system was crumbling, and students are being taught in dilapidated structures and sometimes under trees in the 21st century? “This was a partnership of convenience — a happy accident — that camouflaged what was in fact an unnatural union. For this and other reasons, journalism has always been prone to market failure. Overreliance on a single mode of revenue exposed news institutions to enormous risk. That longstanding vulnerability became painfully clear with the advent of the internet,” argues Pickard.
The Professor corroborates what is already common cause that the arrival of the internet shifted dynamics. He expounds that the internet resulted in “consumers and advertisers” moving their money to the web. Was this the beginning of an end for journalism? The past two decades have seen the media gradually decline as this business model was tested. Consequently, many newspapers decided to reduce operational costs by laying staff and cutting down on circulation in some instances. But the irony was that the fall of mainstream media ignited the rise of Artificial Intelligence (AI) in journalism and the spread of Information Disorders in the form of Misinformation, Disinformation and Malinformation.
What will be the next model? In the wake of this market failure, other models, which have been adopted, like subscriptions, are proving less efficient. To this end, journalism may need to reinvent in order to safeguard democracy. Failure to tackle this pressing challenge may mean a future without journalism. Again, at this point I would like to reiterate that across the world, democracies are finding the need to finance journalism to sustain its role in democracy. This is done through it being regarded as a “public good”. In a free market system, the cost of production, which essentially was covered by media organisations in the interest of democracy, has failed. That we all agree. Mitigating this would require public policy. The failure of journalism will not be saved very much by charity, donors, well-wishers but by governments themselves intervening in what has been a private market failure. How are governments envisaging the future of the media with AI in the mix? Do governments believe that the media is a business like other sectors? Additionally, such a thinking will be guided by international best practices/benchmarks of what obtains globally. Already the US, and the UK are among a few of those funding media publicly, albeit it being underfunded. Making a case for media protection against the market forces, Joseph Stiglitz maintains that the media is not like any other commodity. Stiglitz forms the view that the media is beneficial to modern society through information sharing, which is a public good and thus needs a functional economic model. He thus notes: “The marketplace of ideas is not like a conventional marketplace, with the best ideas winning out in the end. Gresham’s Law (which holds that “bad money” may drive out good money) may apply; bad ideas may drive out good ideas. We know that regulation is needed in ordinary markets in the presence of a wide set of “market failures.”
The media market is rife with market failures, so regulation is needed even more so here. These regulations may even need to “infringe” on other principles, like free speech, because possible harms that occur in the absence of regulations and accountability outweigh the downside risks of such infringement, especially with an appropriately designed institutional structure. Thus, we have fraud laws and truth-in-advertising laws to prevent deception that would completely undermine an effective market for goods and services. We have tort and libel laws to protect against injury. Stiglitz says new models like subscriptions and philanthropy are limited. Against this backdrop, he argues that while regulation is required particularly on the disruption of social networks to the profession, public support is required. He narrates that failure to publicly fund journalism will result in problems to democracies, economies and societies at large. He further explains that public funding will cater for the controversial “media capture” argument through education of journalists as well as revive the dying investigative journalism. Even so, he proffered that this will most likely end monopolies/oligopolies.
*KABO RAMASIA is a board member of the MISA-Botswana chapter.
