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Reuters blogger Felix Salmon recently wrote about what he saw as a hypothetical business opportunity for the cash-strapped New York Times: namely, selling early access to news scoops like the paper’s expose on Walmart. The idea drew a fair amount of criticism (including some from me), and that critical reaction said a lot about where newspapers find themselves now, as digital pressures require them to look for new revenue opportunities. When all is said and done, what is the ultimate purpose of a newspaper — to make money, or inform the populace?
In my response to Salmon’s proposal, I said that I thought such a move would place the New York Times in conflict with at least some of its core principles. By selling access to potentially market-moving stories — some of which would theoretically also have a public-policy element or some other broader social value to them — the NYT would be sacrificing (in some sense at least) its commitment to readers and public journalism in return for subscription revenue from stock traders.
Is private access in conflict with the public interest?
Salmon in turn argued that it isn’t really important *when* regular readers get access to news stories, and so it wouldn’t matter if the Times sold early access to its scoops and then gave them to everyone else later. But it’s not hard to think of examples where these two would be in conflict — what if there was an investigative story about a prescription drug that had dangerous side effects, something that might affect the share price of the drug company? Who gets to see that story first, the general public or the hedge funds?
Others have argued that since we trust the NYT to do the rest of what they do — to report stories honestly, etc. — then we should be able to trust them to decide which stories are of broader public interest and which are not. But there have been cases (such as Judith Miller’s reporting on Iraq) where that trust has broken down, and as a commenter on Salmon’s original post noted, selling hedge funds access to certain stories would raise even more questions about who the paper is more beholden to, readers or large institutions.
The core of the problem is that the New York Times is a strange sort of hybrid animal, just as most other major-market newspapers are: it is a profit-oriented corporation, controlled by the Sulzberger family and other investors such as Mexican billionaire Carlos Helu, and therefore its purpose is to make money. But at the same time, it has also become a kind of public institution as well, with a commitment to informing the citizenry about important events, upholding the public’s right to know, etc. That’s part of the reason why incidents such as the Miller case are criticized so heavily.
Should newspapers do whatever it takes to make money?
In a way, newspapers have only themselves to blame for this turn of events. In the early days of the industry, no one really expected newspapers to be engines for protecting the public good. Their job was to sell as many papers as possible, and publishers like William Randolph Hearst did whatever they thought would accomplish that goal, including making stories up out of whole cloth, just as some “tabloid” newspapers still do now.
But in the 1960s and 70s, newspapers became a massive industry with corporate owners, who wanted to appeal to national and international advertisers and readers — and as part of that process they became public institutions, something that was accelerated by the Watergate scandal and the role that the Washington Post played in it. In many ways, that helped create the idea that newspapers should protect and uphold certain public principles for the good of society.
So the problem now is that newspapers are trying to charge readers more directly for their content than they ever have before, and by definition that restricts the number of people who can read it. If a paper erects a paywall that costs $15 a month, that’s one thing — but what if it’s a subscription plan designed for hedge funds and bond traders? If that is a newspaper’s central focus, hasn’t it given up any hope of being a public entity or keeping the interests of society at heart? In some ways, general-interest papers seem to be damned if they do and damned if they don’t.
Maybe the days of mass-market newspapers with a broad readership are simply coming to a close, and what we are seeing is some of those newspapers evolve into controlled-circulation subscription newsletters, who serve the interests of their small readership and nothing else. And perhaps that isn’t such a bad thing — other solutions could theoretically take their place, or at least help share the load when it comes to the public interest. But the long-term effects of that remain unknown.
We’ll be talking with leaders in tech, media and investing about how to make the most of today’s opportunities, blurred lines and all, at paidContent 2012: At The Crossroads, May 23, at The TimesCenter in New York. Join us.