Following this week’s appearance before the Senate Committee into the Future of Public Interest Journalism, details of which are now up on Hansard, it’s worth reflecting on some of the ideas floated during the hearing on funding media organisations.
As the union reps illustrated, the challenge facing media organisations is acute with the Media, Entertainment and Arts Alliance spokespeople telling the committee how at least 25% of industry jobs have been lost in the last decade as the sector struggles with collapsing advertising revenues.
Ideas to find new sources of income ranged from crowdfunding, government funding, tax concessions and levies on the internet platforms like Google and Facebook.
First up for the morning were the team from Crinkling News, a kids newspaper. Saffron Howden, the publication’s co-founder and editor described how the founders had self funded the publication but after a year of operations they were hoping to raise 200,000 dollars through indiegogo to keep the doors open.
Senator Ludlam, the Committee’s Greens member, observed that running an appeal every year is hardly sustainable, something Howden agreed with saying the funds are to give the newspaper ‘more runway’.
Crinkling made its $200,000 target this morning, so for now the paper is saved. It will be interesting to see if Howden and her co-founders will find that sustainable revenue model rather than just an accessible form of capital.
One of the obvious models for Crinkling is a government subsidy, Senator Ludlam asked if the paper had received any funds from state education departments to which Howden replied they hadn’t.
While for a specialist publication like Crinkling government subsidies may be an answer, most of those giving evidence were cautious about suggesting direct payments as an answer for the industry’s woes as it opens scope for interference in editorial policies.
There is some precedent for this in Australia, with the Victorian government supporting The Conversation but given how arbitrary Australian government programs are – not to mention the priorities of spending taxpayers’ funds – it’s hard to see how politically acceptable that is.
Something more politically acceptable may be tax concessions to investors and founders similar to the R&D grants available to technology companies or the producers’ offset available to film producers.
I went further during my questioning and suggested something similar to the 10BA concessions that were available to the Australian film industry during the 1980s which unleashed a wave of innovation and new talent but were misused terribly by taxplanners – something that would give the Treasury apoplexy.
While this is an idea that may well get legs during the political bargaining over the media reforms, it won’t however solve the revenue problem.
Charitable or not-for-profit status
A variation on the tax concession idea was to allow media companies to have not-for-profit or charitable tax status. It’s hard not quip that most media ventures are already run on basis where they don’t make any money.
Under this idea, subscribers to media services would be able to claim their fees as a tax deduction which may encourage more people to sign up.
This idea also seemed to find a lot of support from the Senators and may well form part of the political horse trading. Like some of the other ideas there may be a potential problem with defining what exactly is a media company or a ‘journalist’.
One opportunity these last two options opens up is for philanthropic ventures, like the Guardian’s Scott Trust or the short lived Global Mail, to enter the field. Some cynics would say The Australian already operates on that model, but as the Global Mail’s brief life shows, generous benefactors tend to be rare.
Also attracting a lot of interest was the idea of updating copyright laws to force search engines, social media sites and content aggregators or scrapers to pay fees to creators. This could be done through an organisation like the Copyright Agency with fees passed onto media companies.
Tightening the copyright laws has some appeal, but this could prove a double edged sword for journalists, writers and artists as fair dealing – or the US equivalent of fair use – becomes restricted and finds media organisation liable for using extracts of others’ works.
It’s also unlikely to raise much unless there was a co-ordinated global push to make the major online companies pay fees which in turn would increase the costs of running the system.
A ‘Google tax’
There was much indignant huffing about services like Google and Facebook using content and the possibility of levying them for the privilege.
Were this done internationally, this would be a huge pool but a number of speakers including Fairfax CEO Greg Hywood and freelance journalist Michael West pointed out, these services are also critical distribution channels and it is comparatively easy for publishers to block these sites if they chose.
That they don’t choose to block Google is indicative of how critical the service is to distribution, so while Google takes most of the ad revenue the media companies are still dependent upon it. Taxing these services might be counterproductive.
Where to for the future?
Overall the suggestions were all worth considering but the real question of how do you make money from media wasn’t really answered. While tax breaks and levies may help, the fundamental truth is most news outlets are not financially sustainable in their current form.
That in itself raises a question of whether incumbents like Fairfax and News Limited are really relevant to journalism at all – maybe the large established Twentieth Century companies don’t have a role in this era.
Should that be true, the question of how journalism is funded still remains open. As mine, Michael West’s and Crinkle News’ tales described, there is little in the way of sustainable business models at the moment.
Wednesday’s hearing didn’t give us clues to that viable model could be, so we continue the search.