Sunday, 11 December 2016

Funding Hard News

The previous post defined hard news (someone wants to kill it off) and argued that it is a public good so we should consider public funding to top-up what the providers might get from other sources.

Before we get into the details of how this might be achieved, let's start with a bit more background. Firstly, "we, the NZ public" do already provide public funds for some kinds of broadcast (not print) media, through NZOnAir which does a great job of promoting local content in that middle space between hard news and PR fluff. To get an idea of the numbers involved, the following chart shows public funding of NZOnAir over the last 15 years (in $NZm): steady on almost $130m since 2009.

This is not a solution to the problem of funding hard news: it helps to build local culture and support local artists, but there is nothing in NZOnAir's strategic framework that even hints at funding hard news. Moreover, international researchers looking at how to fund democracy-supporting journalism tend to cite New Zealand as a serious laggard. For example, this 2011 report from Free Press (pdf) opens it's NZ section with the following statement
New Zealand’s recent history in some ways offers a cautionary tale of how not to structure and fund public media. 
Media researchers NiemanLab also called out New Zealand in their reporting of the Free Press work, sounding a tad incredulous:
In New Zealand, in 1989, the public broadcaster TVNZ lost all its funding and was actually required to produce dividends to pay back to the national treasury.
So we're international laggards on hard news at a time when all journalism worldwide (but particularly hard journalism) is really struggling to be funded. That's the problem, and its a public policy problem.

There are all manner of ways that journalism can seek funding, but if we want to bake in a reliable counterweight to the PR spin of governments and firms, for example because we think it's essential for democracy to function properly, then this activity needs public funding.


There are three parts to the how question: we need to consider the source and destination of the funds, and how much cash to allocate. My initial thoughts on these topics follow - feel free to add/criticise in the comments section!

The default option for sourcing funds is general taxation, but that might not be the best option. We may be able to do better by raising new taxes on particular activities. For example, it is often argued that we should seek ways of un-doing the international tax manipulations of  Google & Facebook. This would help to restore credibility to our tax system, and is worth doing anyway, but then we'd be back to looking for some way of funding hard journalism from (a slightly larger pot of) general taxation revenue.

Given that we have come to this point by massive productivity gains in advertising, an obvious alternative is to raise a specific excise tax on the $2bn spent annually on advertising in Aoteoroa.
Advertisers would hate this of course, and standard economic analysis would predict that there would be less advertising as a result. However there are also sound economic reasons to believe that some industries have far too much advertising, and we could allow tax exemptions for adverts that were obviously in the public interest (e.g. promotion of voting in elections and public health messages).

There could also be a case for other ways to provide fiscal support. For example, in France, everyone with an official press card gets a discount off their tax bill.

I have no strong views on these options but others will have.

In allocating funds to hard news providers there are two objectives. One is to design a system that promotes good coverage across all of the fields in which hard news is valued. The other is to keep the hard news providers on their toes.

To support both of these objectives, I'd favour using competitive processes to allocate funding, monitoring of outputs, and some kind of feedback loop should be developed so that providers can build a reputation for being effective users of public funding.

Structurally, there would be a case for splitting the funds between the longer term (3 - 5yrs) support of one or two dedicated teams and specific grants for individuals. Ideally, this would allow the incumbent team(s) to build strength, cultivate a competitive fringe and provide performance benchmarking data to keep everyone on their toes.

How much should we spend on this? The NZOnAir funding is my only real benchmark here, so my starting point is that we should spend at least as much on supporting hard news as we do on the culture-building outputs funded by NZOnAir. That's about $130m/year. Oh, and both funds (NZOnAir and HardNews) should increase at the relevant rate of cost inflation instead of being fixed in nominal terms as has been the case for NZOnAir recently.


I think we need this for the same reason we need the Reserve Bank Act and the Ombudsmen Act and Public Finance Act. We should require that all governments submit to external scrutiny in ways that ordinary people can understand. Just having these laws helps "keep the bastards honest" but we also need an empowered fourth estate to support our democracy by publicly holding their feet to the fire.

And if that doesn't convince you, spare a couple of minutes for this. Scroll through to 1:35 and then listen to Guyon...

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