Government has history of funding news, study says

Lawmakers think of new ways to fund journalism's shift to the web 

Photo courtesy of Flickr user mfobrien

Journalism experts are challenging the myth of the fourth estate, the news industry completely free from government funding in the United States, and are calling for fresh ways of funding new media through the government.  

A recent report from the USC Annenberg School of Communication revealed the U.S. government has a tradition of funding independent media through postal subsidies, public notices and tax breaks. The report also showed, however, that financial support has dwindled and has dramatically weakened the news industry.

Journalism experts are challenging the myth of the fourth estate, the news industry completely free from government funding in the United States, and are calling for fresh ways of funding new media through the government.  

A recent report from the USC Annenberg School of Communication revealed the U.S. government has a tradition of funding independent media through postal subsidies, public notices and tax breaks. The report also showed, however, that financial support has dwindled and has dramatically weakened the news industry.

"The notion that there’s been some kind of state/press wall has never been true and hasn’t been true today,” said David Westphal, co-author of the report and former Washington editor of McClatchy Newspapers. “The mythology is getting in the way of good discussion on the issue.”

He co-authored the report with Geoffrey Cowan, former dean of USC Annenberg School of Communication and former head of the International Broadcasting Bureau, who said the Founding Fathers intended for complete subsidization of mailing costs. 

“It would be perfectly sync with American history,” Cowan said.

Although journalists cringe at the thought of government-funded press, major public broadcasting programs have been funded by Congress, including Frontline, Newshour, and NPR’s coverage of the Iraq war. International programs receive grants from Congress, including Voice of America and Radio Free Europe.

Postal subsidies used to amount to 75 percent of mailing costs for newspapers and magazines in the late 1960s. After the Postal Reorganization Act of 1970, publishers saw a major reduction in subsidies because of the financial crisis gripping the postal service. Today, subsidies and discounts have dropped to 11 percent. 

Public notices amount to more than 10 percent of revenue for community publications. But those numbers will fall because governments are looking to save money by publishing public notices online. The study showed the government is responsible for the most purchases by column inches of ad space in the Wall Street Journal by requiring public notices, legal notices and foreclosures.

According to the report, proposals have been introduced in 40 states to allow local and state agencies to shift to the Internet. This move could severely cut the already dropping number of ads selling in print publications and even online versions.

In 2009, the Obama administration announced it would move forfeiture notices that took up a chunk of ad space in papers, to the Web, saving them $6.7 million over five years.

FUNDING THE FUTURE OF NEWS

A variety of business models have been thrown around to save the news, and the report advocates government and non-governmental forms of support.

For print media, Westphal and Cowan recommended tax credits for taxpayers who subscribe to newspapers, expanding federal investment in digital technology, newspapers operating as nonprofits and stricter antitrust laws to protect journalists’ work.

They suggest Congress revisit its rules on public broadcasting and international broadcasting. By increasing government funding of public broadcasting, they argue journalists that produce these shows can strengthen the scope and quality of their work.

The report recommends relaxing restrictions on domestic consumption of international broadcasting like Voice of America and Radio Free Europe. Currently, none of them are to be made available for listening or viewing by American citizens under the Smith-Mundt Act. 

Meanwhile, other journalists push to find funding outside of the government.

Jan Schaffer, director of J-Lab: The Institute of Interactive Journalism, says more journalists are examining the possibilities for government support.

J-Lab supports a number of initiatives for start-up journalism sites through grants, awards, competitions and seminars that promote citizen media, entrepreneurship and multimedia. Schaffer believes organizations should focus on producing good content as they seek support for sustainable reporting.

But Schaffer voices concern for those who think government funding could help buoy traditional media companies. "Taxpayers are not very enamored of media right now and I suspect that they see other priorities for thier tax dollars than supporting failing media organizations," she said via e-mail.

Politicians, scholars and journalists continue to weigh their options and leave nothing off the table. Schaffer stresses, however, that news leaders should keep their focus on providing substantive information for citizens and the money will follow.

“I’m not sure that this should be a government problem—I think, and I’ve always felt that, media that is providing useful news and information to people will find ways to support itself," she said. "Media that doesn’t do a good job is going to have a harder time."

Editor's Note: This is a corrected version of the originally posted story that clarifies and corrects statements attributed to Jan Schaffer. The Observer staff regrets the errors.