How to fund journalism and avoid market failure

Serious journalism is struggling. It seems there isn’t a week that goes by without some part of New Zealand’s news media reinventing itself, cutting costs or just falling apart – the new Scout website, the end of Campbell Live, big changes at Fairfax and more recently the NZME newsrooms. Each time it’s accompanied by dire warnings that it’s the end of journalism as we know it.

You know that journalism is in trouble when our most prolific interviewer, Mike Hosking, claims to not be a journalist. Just what is he implying about the organisations he works for? Or journalism in general?

Depending on who you believe, the changes are merely “a different way of operating, geared toward building a dynamic, responsive newsroom” or “the loss of an effective news industry in New Zealand.” At least everyone agrees that in general there is less investigative, hard-hitting and long-form journalism these days.

The reason is totally understandable – money. There is money to be made entertaining readers, viewers or listeners. There is less money in informing them.

That would all be fine, except that we really need the informing bit. New Zealanders need to know who’s up to something dodgy, what the problems and solutions are, what’s going on beyond our daily horizon. Without journalism, public life ceases to be public. Without journalism, democracy doesn’t really exist because if we don’t really know who we’re voting for, what’s the point?

The decline of hard news, tough interviews and investigative journalism is a form of ‘market failure’. The market has failed to provide something that society deems necessary to the proper functioning of democracy.

So who’s profiting from this market failure? Well, we the consumers are. Although it’s hardly profiting. We used to pay for newspapers – which bought us something to read and also bought us a better democracy – but now we don’t so much. The website you are currently reading is the only New Zealand publication that has successfully monetised its digital content – at least that’s how it seems. Quality business news is hard to come by, mainstream news not so much.

While we spend less on news, we spend more on our phone and internet. The telcos and internet service providers (ISPs) are growing at enormous rates as we pay them billions of dollars to access news, information and media that we used to buy from newspapers and magazines. Meanwhile the broadcasters, the newspapers, the publishers and other media creators struggle to survive.

A modest proposal
Perhaps we should close this loop, bring a little fairness to the situation and, most importantly, fix the market failure that threatens democracy in the 21^st century.

There is actually a relatively easy solution. It doesn’t require subscriptions or sales or government funds. And it’s already in use fixing other market failures.

Earlier this year, Parliament passed a Bill to continue the Telecommunications Development Levy. It siphons $50 million from the revenue of the telcos and ISPs to fix mobile phone ‘black spots’ and provide more rural broadband.

Both are worthwhile causes that Minister Amy Adams said “would otherwise be unlikely to be commercially viable” and “it funds non-economic aspects of infrastructure so that the industry giants cannot just cherry-pick the profitable areas”. She could easily be describing investigative journalism that without doubt is a “non-economic aspect of infrastructure” that is “unlikely to be commercially viable.”

It’d be pretty straigh-forward to extend this levy and it would provide significant, long-term funding for journalism in New Zealand. An arm’s length government agency could be enlisted to distribute the funding to news media of all kinds – newspapers, magazines, broadcasters, authors, bloggers and even NBR.

Parts of this idea have already been mooted. Business writer Fran O’Sullivan recently proposed something similar after Campbell Live closed down. And NZ on Air already devotes a small amount of its precious funds to 3D Investigates on TV3 and the 3News website. More precedents.

This idea to levy telcos and ISPs to fund journalism is actually just putting together several existing processes. It’s an innovation that would provide quality journalism to New Zealand into the foreseeable future, whatever the predominant technology becomes, while supporting existing news media infrastructure.

Kind of like seizing a win-win from the mouth of market failure.

Myles Thomas is the chief executive of the Coalition for Better Broadcasting Trust.

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