Beware the Death Howl of the Old Media

But in capitalist reality as distinguished from its textbook picture, it is not that kind of competition which counts but the competition from the new commodity, the new technology, the new source of supply, the new type of organization (the largest-scale unit of control for instance)--competition which commands a decisive cost or quality advantage and which strikes not at the margins of the profits and the outputs of the existing firms but at their foundations and their very lives.
-Joseph A. Schumpeter, Capitalism, Socialism, and Democracy

It is no secret that journalists everywhere face an industry in trouble. I have put in more than my two cents on the subject, as have a multitude of people more intelligent and experienced than myself. I will proceed from the assumption that, in a condition of continuing freedom, the news outlets as we know them will soon be extinct.

Acknowledging the fact that news has always tended to be pessimistic about the markets, I believe that Tyler Cowen was on to something when he stated:

Most journalists work in a declining sector -- newspapers or TV -- and this does not augur well for their belief in progress and the virtues of economic growth. They are not well-positioned to enjoy "creative destruction."

Pre-existing biases aside, Old Media is in a desperate battle for its basic survival. Few believe that it is a battle Old Media is poised to win, should market conditions remain what they are. So those who are unable to adapt in the market can be expected to turn to the Grand Patriarch for protection.

Bill Moyers laments the "thoroughly commercialized environment" we're finding on the internet, and argues that allowing the market to do its thing is apparently the same as being indifferent to "media and democracy."

As Steve Boriss so eloquently put it:

In Moyers’ America, government is the hero, with government-controlled PBS and NPR among the very few “independent sources of information” that have survived. He calls upon the FCC to impose even greater regulations on corporate activities and free speech.

Old Media is staring down the barrels of Schumpeter's gales of creative destruction, and has no intention of going down without a fight. To avoid annihilation, it must adapt, and has found only two paths to choose from--taking its chances with the new media, or courting protection from outside of the market.

Such protection comes at the expense of our individual freedom to choose what sources we turn to. We would all be better off if those outlets seeking walled off conservations were simply allowed to go extinct.

We will face the media counter-attack on two fronts. The first is in direct protection, which has drawn criticism from a number of quarters already. It is here that the Death Howl will be at its loudest, and it is here that Old Media must be disciplined head-on.

In the long run, however, I fear a less direct, and therefore less visible, threat. That is government subsidized internet, where rules about what can and cannot be accessed may be controlled without fear of violating the First Amendment. Those who oppose outright regulation of media markets may be less likely to oppose favoritism towards old outlets in a government-controlled internet service. After all, you can always just go to private provider if you don't like it, right?

This fails to recognize that decisions tend to be made on the margin. If your tax money has already been spent on building an internet service, it costs you less to make use of it than it would to pay additional money for a private service. While lower-quality and restrictive filters might ultimately drive consumers to businesses, subsidized internet service will almost certainly cause distortions in the market.

It is likely that those outlets unable to compete in the market would retreat behind those distortions. They would live like parasites off of an inferior internet service that tax payers would have no choice but to bankroll.

Direct protection remains the most immediate threat and we ought not lose our focus in the defence against it. I urge people to recognize that subsidized internet is going to be the next fight we face, and that we ought to begin preparing for it sooner rather than later. The best defence is a good offence--the last thing we need is to sit on our hands and allow the advocates of subsidized internet to frame the debate.

The price of freedom is eternal vigilance.
-Thomas Jefferson