In a meeting yesterday with the editors of the New York Times, FTC Chairman Jon Leibowitz said more state subsidies and intellectual property may be needed to protect “independent” newspapers from the scourge of market failure:
“There are some areas where you clearly see positive creative destruction,” Mr. Leibowitz said, giving the example of travel agents who were replaced by Orbitz and other online-booking systems. The news, he said, was not one of those.
“When you’re dealing with something as critical as news is to a democracy, you need to ensure, certainly, that it’s independent, but also that it’s vibrant going forward,” he said. Areas like investigative reporting, foreign and domestic bureaus, and statehouse reporting, he said, would likely falter under blog operations because of “economies of scale.”
He said he wasn’t sure what the solution was, but threw out a few ideas discussed at the conference: maybe special tax treatment for newspapers, a Corporation for Public Broadcasting-like fund, or for the newspaper industry to charge fees for the re-use of its content, similar to the model used by the American Society of Composers, Authors and Publishers.
Mr. Leibowitz, of course, is married to an editorial writer at the Washington Post, a conflict that the Times did not disclose in its report.
I would also note that newspapers, including the Times and the Post, generally do not report on the activities of the Federal Trade Commission (aside from reprinting FTC press releases). Unlike, say, this pathetic little blog and our poor economies of scale.