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Adam Wagner, Market Research Assistant

Writing Sample #1

10 Nov 2010

US Journalism

Question # 3- Government Support of Journalism, U.S. Journalism Crisis

Can newspapers and scholarly journalism survive? Currently, journalists across the

country are losing their jobs and Newspaper companies are being forced to downsize and

outsource to stay in business. This journalism “crisis” is primarily a result of internet and

24-hour cable, which together have created a consumption culture that has come to rely on

instant and free news sources (Bird, Future, 293). People are now able to find an

abundance of news without moving from their computer screen and without having to

purchase a newspaper. Citizen journalists and bloggers take articles from professional

journalists and deconstruct them and relay the information in different forums. However,

this process has positive and negative effects. News and information sharing is no longer a

one-way discourse from corporation to reader, but it is now a horizontal and vertical

partnership where the citizen has a much stronger voice then in the past. Unfortunately,

this new freedom translates into loss of revenue for companies, less jobs for journalists and

in the end the reduction of news quality and quantity (Bird, Future, 294). Therefore, the

media industry is being forced to rethink the traditional business model of newspapers, and

many have looked to European subsidy models as a possible solution to the American

crisis. So, can these European models benefit the future of American journalism? I would

argue that, yes, it is quite possible for a subsidy model to benefit the stubborn, liberalized

American journalists because a subsidy plan will be able to support floundering but
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essential pieces of the newspaper industry, such as hard-news journalism, by providing a

financial buffer and an incubation period for the newspaper companies to discover how to

be profitable in the current market.

First of all here is a brief description of different types of subsidies utilized in

European Democratic Corporatist and Polarized Pluralist countries. There are two

different types of subsidies that are generally employed by European countries, direct and

indirect. Direct subsidies are generally immediate cash benefits that are awarded on a need

basis, and indirect subsidies are any legislation that help foster a more economically

favorable environment for a given industry (Murschetz 295). In European countries,

subsidies are utilized as a measure to ensure public access to diverse information

(Murschetz 291). Many of these countries sponsor a wide variety of political parties, and it

is subsequently essential to their government system that numerous voices can be heard.

Therefore, European governments have taken measures to guarantee that their political

process will not be disturbed by unpredictable economic environments. Most European

countries give their newspaper companies lump sums of money annually in order to keep

them from going out of business. Sweden has a particularly intricate subsidy system that

allocates “money to all papers except the dominant paper in a given region or city”

(Nordenson 40). Under this system Sweden has seen a substantial reduction in newspaper

bankruptcy. Also, the most important factor in the Sweden system is that subjectivity was

removed by creating strict and automatic laws that specify who is awarded benefits and

how much. Therefore, politicians are not an aspect of the subsidy process. This degree of

separation allows for an objective and efficient system of subsidies that is able to directly

assist small or struggling newspaper corporations.


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After examining some of the European subsidy concepts it should be quite plain

that if crafted properly many of these ideas could be very viable options in the American

model. The most immediate way that subsidies can support the failing newspaper industry

is by becoming a financial buffer. Therefore, in order to combat the drop in sales due to

internet competition, the U.S. government should step in and save the plummeting

newspaper business. The primary goal of the U.S. government should be the preservation

of quality news that is accessible by the general public. Right now infotainment and

sensationalized news is the easiest platform for being commercially successful, however it

also maintains little value to the health of democracy. So, when companies downsize their

journalist department in favor of a tabloid section the public loses access to quality

information. One possible way to mend this problem would be a government subsidy that

sponsored hard-news journalists. Individual companies, based on their size, could be

awarded money for specific use on salaries and the maintenance costs of investigative

journalists. This way businesses could still create the high-revenue tabloid sections if they

wished, while at the same time maintaining a respectable core.

Another subsidy option would be to simply embrace a system similar to what

Sweden uses. If smaller companies are unable to support hard journalism and the United

States is therefore slowly losing its information basis it would be logical for the

government to be allowed to intervene in order to preserve a foundational piece of

democracy. If the U.S. embraced the Swedish model then any newspaper except the

dominant one in each region would be awarded a cash reimbursement, which would allow

them to maintain a high level of journalistic production. These newspapers could use the

money to cover the expensive costs of salary journalists or the costs that are lost by the
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recent decrease of weekly sales. No matter where the money was distributed it would act

as a financial buffer for the marginalized newspaper companies.

The third potential scenario in which a subsidy model could provide a financial

buffer for newspaper companies is by allowing them to become not-for-profit

organizations. This indirect subsidy could be easily achieved if the tax laws were amended

so that newspaper companies could be organized as not-for-profit, tax-exempt

corporations. In this scenario, companies could save millions on taxes. Also, Joe

Mathewson came up with the idea that congress could encourage newspaper gifts “by

allowing the company to deduct the full value of the newspaper as a charitable

contribution, creating a special exception to the current ceiling on corporate gift

deductibility” (Overholser 16). Ingenuity such as this is what the American newspaper

industry needs right now, and subsidies are a unique way to support journalism. The larger

companies would most likely not want to become not-for-profit, however local newspapers

across the country would be granted a great opportunity to lower their operating costs.

Another avenue for government support of the newspaper industry would be

research grants that would establish an incubation period while intellectuals developed a

commercially viable internet campaign. Companies still have not discovered a way to

produce positive gains through internet news, except by specializing in sensationalized and

lifestyle articles. The internet is currently more of a leach then a support system. It is

extremely difficult to acquire readers willing to pay a subscription fee, and as soon as news

is posted online or in print it is utilized by bloggers to create their own content. However,

according to Elizabeth Bird, companies and campuses are beginning to work on a

profitable internet scheme for the newspaper industry. She also claims that online
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readership is rising much faster then the loss of print readers, but the problem is newspaper

companies are lagging in their attempt to “connect innovations with financial success”

(Journalism’s Search, 1). If the government could partner with this effort then their may

never even be a necessity to subsidize journalism. Newspapers simply need to discover

how to be profitable in the modern media market.

So, despite the abundance of negativity directed towards state involvement in a

liberal country such as the U.S., subsidies are a real option for aiding newspaper

companies through this difficult economic period. According to prolific communications

author Dan Hallin the fear that government support will hinder American press freedom is

proved false by the European subsidy models (Nordenson 41). Countries such as Sweden

have illustrated that subsidies do not hinder democracy, but they promote the spread of

diverse and accurate information. The financial failure of traditional journalistic centers

could result in the tragic loss of vital democratic values such as access to quality forms of

information. Therefore, it is not only possible for European type subsidy models to create

a financial buffer for companies and an incubation period for the development of new

technologies; it is crucial that the U.S. government begins to explore new options for the

recovery of the American newspaper industry.


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Works Cited

Bird, Elizabeth. “Reasons to Believe: Journalisms Search for a Support System.”

Columbia Journalism Review March/April 2009. Print.

Bird, Elizabeth. “The Future of Journalism in the Digital Environment.” Journalism

2009: 293-295. Print.

Murschetz, Paul. “State Support for the Daily Press in Europe: A Critical Appraisal:

Austria, France, Norway and Sweden Compared.” European Journal of

Communication 1998: 291-313. Print.

Nordenson, Bree. “The Uncle Sam Solution: Can the Government Help the Press? Should

it?” Columbia Journalism Review 2007: 37-41. Print.

Overholser, Geneva. On Behalf of Journalism: A Manifesto for Change. The Annenberg

Public Policy Center.

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