Big Media May Be Next In Line For Subsidies

LOS ANGELES (YBH.ME) The Federal Trade Commission is in the midst of a two day conference/workshop addressing journalism’s future. As ad revenues shrivel and news junkies get their information fix online, for free, the government is taking notice. FTC Chair Jon Leibowitz has stated, “we should be willing to take action if necessary to preserve the news that is vital to democracy.”

Intervention Afoot

The FTC has a wide range of powers under the Constitution to bolster favored news organizations if it so chooses. Measures under discussion include waiving anti-trust laws to allow block action by media companies in negotiating web use contracts, and writing regulations forcing search engines like Google and Yahoo to pay media companies for content the engines make available. Another alternative being discussed is to allow media companies to qualify for tax exemptions by being re-classified as educational entities.

In attendance at the workshop are Rupert Murdoch, chairman and chief executive of News Corp., The Huffington Post’s Arianna Huffington, former Washington Post executive editor Len Downie, and executives from Yahoo and Google.

Mindful of, for example, the red ink at The New York Times and bankruptcy of the Tribune Company, Representative Henry Waxman, influential chairman of the House Energy and Commerce Committee, said today “eventually government is going to have to be responsible to help and resolve these issues.”

Left-leaning advocacy group Free Press, a supporter of government intervention in the media business, approved of Waxman’s position. They state in a recent action report, “America still needs the public good that is quality journalism: in-depth, investigative stories like Watergate and the Pentagon Papers in the past or the more recent coverage of the AIG bonus fiasco and the neglect of veterans at Walter Reed Hospital.” They add, “newsrooms should serve the public interest, not private or government aims, and should be treated as a public service, not a commodity.” It is interesting to note that all of the stories mentioned by Free Press favored Democrats or Democratic causes, with the exception of the Walter Reed affair.

As a monetized commodity, information is for the most part failing except at specialty websites focusing on, for example, sports and business news. Ari David, the presumptive Republican congressional nominee taking on long-entrenched Congressman Henry Waxman, had this to say, “In a time when government money can and should be going elsewhere, Henry is talking about subsidizing failing content providers who aren’t finding an audience for their product. The same product which endorses him.”

Most recently, in the best tradition of Watergate-style reporting, the “Climategate” story hit the web and has so far forced two high level resignations and probably nailed the coffin shut on Cap and Trade, a story put forth outside existing old school journalism models. “Climategate” and the recent ACORN stings have been huge stories on the internet and with independent journalists.

The media outlets Mr. Waxman and Free Press are hinting at subsidizing have all but ignored these stories.

Laura spent years as a Hollywood story analyst, did a big 180, and is now an entrepreneur focused on web marketing and analytics. She's also a mom of one.