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Vouchers for the Media?

As an employee of a newspaper who is deeply invested in the survival of this industry, of course I'd pay $5 a month for the New York Times. Who wouldn't? No one. Newspapers are awesome.

On the other hand, the answer is that, five months ago, I might not have paid five dollars. Not that I don't think the New York Times worth it. But maybe I wouldn't have gotten around to it. And since I'd forgotten for a week already, I'd have been reading more Washington Post and more Wall Street Journal and more Los Angeles Times. I'd be missing the columnists, but Mark Thoma excerpts most of Paul Krugman. Maybe I'd have coughed up the money because I missed David Leonhardt and the Sunday Magazine. Maybe.

But that ambivalence is entirely a function of the low cost of replacement. If the New York Times locks me out, The Washington Post probably won't. But what if The Washington Post did it too? And the LA Times? And CNN? And all the major news organizations? Then I'd have to pay. Or ask the Justice Department to go after the papers for cartel behavior.

Which is, of course, the problem with that strategy. But the major newspapers are in a bit of a collective action problem. Since they offer basically equivalent products, none can really go behind a pay wall without risking a major loss of readers to their competitors. They're like crabs pulling each other down in the tank.

I don't really have an answer for that problem. But it does remind me of one way public subsidies can be structured: Imagine every American had a $5 voucher to put toward the media institution of his or her choice. That's all the voucher could do. And so all Americans just chose their favorite outlet and typed in, say, their Social Security number. Could be their local paper. Could be NPR. Could be the New York Times. Could be the Weekly Standard. Since the recipients of the money would be decided by individual Americans, the newspapers would be protected from political meddling. Since they'd want the maximum number of committed readers, they'd have more incentive to compete for their business. Dean Baker proposed a variant of this idea for funding the arts, but I don't see any reason the same approach couldn't work for the media.

By Ezra Klein  |  July 10, 2009; 5:30 PM ET
Categories:  Journalism  
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Honestly, that sounds like one of those easy to propose, hard to implement ideas.

What happens to the guy that want to use it for the Daily show? It doesn't even pretend to be a news show, yet it gives better news than Fox which gives verifiably bad information and never corrects it. Don't like the video/web analogy? Call it the Onion versus the NY Post (Which is only slightly to the right of your employer at the moment.)

I'm all for general infrastructure issues to help papers and magazines, but please remember, your institution backed the change in postal structure that was tweaked to kill off a lot of smaller publications and instead forced them to the web. Where they are, with apologies, kicking your bosses arse and taking your lunch money.

Just an observation - Jonnan

Posted by: Jonnan | July 10, 2009 5:43 PM | Report abuse

Why should the news media be blessed with a $5 per person subsidy and not any other industry?

Posted by: fuse | July 10, 2009 5:46 PM | Report abuse

They're like crabs pulling each other down in the tank.

That would be "in the basket," no?

Posted by: kpidcoc | July 10, 2009 10:23 PM | Report abuse

Basically makes sense. But vouchers are complicated / expensive to implement. No one without a voucher can read? I can only read the things I give a voucher for? Or if anyone can read, why should I bother to fill out my voucher? Etc.

Much simpler: just pay each "content" web site proportional to its readership. The money can be derived from a tax on internet connections. Everyone can read whatever they want, the sites don't have to do anything except attract readers / watchers, etc.

The impulse will be to restrict the payments to "news" sites or whatever. But as we know other sites do reporting, and as Jonnan says, what about Comedy Central?

On the other hand I think we'd have to find some way to exclude search and aggregator sites (e.g. Google, Google News, YouTube, etc.). The criterion seems to be "only those that provide original content".

Advertising would still be OK. Sites could still charge extra for some content, or for turning off ads, or whatever. The market could "decide".

This would also automatically support small sites in a small way, but I hope enough to let them persist and maybe grow.

Oddly, though this would deliver what the existing media say they want, I bet they would not be happy.

Posted by: jedharris | July 11, 2009 1:23 AM | Report abuse

More complicated than it looks at first.

I suspect that a few companies would end up like Harvard and Yale, with huge endowments, while most would be in trouble. The NYTimes, Fox, Wall Street Journal, maybe NPR, and maybe Talking Points Memo would do great. The WaPo would be lucky to get much in donations outside the DC area, and then would have to share with a bunch of others.

That is assuming you could still read Ezra without paying the WaPo.

The most sensible thing is to meter, and bill people for every day they check in, but I doubt that would fly either.

I have been told that when Gutenberg introduced moveable type to Europe, all hell broke loose as existing models fell apart. It eventually worked out.

We are just experiencing the same thing over again.

Posted by: PatS2 | July 11, 2009 4:40 PM | Report abuse

Metering is the wrong thing to do (in terms of welfare).

We have people pay for the amount they use (metering is a case of this) because their use costs, and we want to "push back" just enough on their use to balance the cost.

But reading / watching stuff online costs almost nothing (per user). It is producing the stuff that costs.

In fact the overhead of metering and billing costs much much more than the cost of serving the content, because of security, fraud, etc.

So instead we need to get the money somehow (my proposal is a monthly internet access fee, or tax if you prefer) and then pay sites according to usage / popularity.

This imposes a small overhead on the ISPs who have to collect the money and send it in, and a small overhead for monitoring popularity and sending checks. There's no overhead for the sites themselves, except for making sure their physical address (where to send the checks) is properly registered.

The effect is pay people to create popular content, by whatever means. Existing large content producers have an advantage starting out, because they already are producing content, are already bookmarked and linked, have figured out what is popular, etc.

But as we have seen in the last 10 years or so, this kind of advantage can erode quickly. Markets on the internet are pretty fluid. It's not at all clear that conventional marketing (ads etc.) can do much to direct traffic.

So I'd expect the result would be increased investment by small producers, and increased change as some of that investment bears fruit. The shares of established media would probably erode more quickly. On the other hand, some new sites would have the money to send low budget correspondents to Iran and Honduras, for example.

None of this addresses the question of how much gets paid out (and Ezra didn't really address that either). But we can easily come up with a back of the envelope guess. According to Nielsen in June 2008 there were 220,141,969 US internet users. If we tax each a dollar a month that's about $220 M a month, or $2.6 B a year to pay content producers.

This cannot replace existing revenue to content providers. Total ad revenue for US newspapers in 2008 was $37.85 B, more than ten times as much. I don't think a tax of $10 / month per internet user would be acceptable. On the other hand existing revenue won't go away completely.

Posted by: jedharris | July 11, 2009 6:50 PM | Report abuse

I'd like to see something like this applied to candidates for Federal office, as a way of counteracting pols' dependence on corporate campaign contributions, and to reduce the amount of time they have to spend on the phone, raising money. Give every taxpayer who's a U.S. citizen over 18 a $50 voucher every other year that they can split up as they want - between House, Senate, and Presidential primary and general election candidates.

If 100 million adults used their vouchers, that would be $5 billion per cycle that pols didn't have to kiss up to business interests for. And that money, effectively $2.5 billion a year, would be a drop in the bucket in terms of the budget.

I think it's been tried in a few localities, FWIW, but I don't think it's ever been tried on a state or federal level.

Posted by: rt42 | July 13, 2009 9:06 AM | Report abuse

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