Pando

Taxing Broadband to Save Journalism is One Big, Stupid Idea -- We Need a Thousand Small, Smart Ones

By Paul Bradley Carr , written on September 24, 2012

From The News Desk

David Leigh was first to be right about many things.

He was first to identify the potential of WikiLeaks to revolutionize transparency in the digital age. He was also first to realise that Julian Assange's hypocrisy and drive for personal publicity would ultimately doom the project to failure. As the Guardian's Investigations Executive Editor, Leigh has exposed corruption at BAE and sent British MP Jonathan Aitken to jail for perjury.

It's almost heartening, then, to discover that Leigh isn't right about everything. In fact, on one subject in particular, he's about as wrong as it's possible to be. Ironically, that subject is the future of journalism.

Writing in his own newspaper, Leigh has called for the British government to levy a tax on ISPs -- to the tune of about $3 per subscriber -- which would be used to compensate UK newspapers for the fact that no one wants to pay for news online. The spoils would be allocated to newspapers based on how much traffic those newspapers attract: some $100 million each to the Guardian, the Telegraph, and Associated Newspapers (publisher of the Daily Mail). The deal would pay considerably less to Rupert Murdoch's Times newspapers, which publish all of their editorial behind a paywall.

The first thing to note is that the idea isn't new. For years, the more lunatic fringe of the music and film industry has been proposing a simialr tax to offset their own losses due to piracy. The theory is the same as Leigh's: Certain types of "content" are the beating heart of the Internet, even though most people are reluctant to pay directly. By taxing one thing that people do pay for -- Internet access itself -- the balance can be restored and the public can continue to bank on a ready supply of news and music and film and the rest.

The second thing to note is that the idea is a very British one. TV owners in the UK already pay almost $200 a year for a "TV license" which subsidises the BBC to "educate, inform, entertain" the nation.

And yet.

I cry a tear for the journalism industry. Really I do. In a right and proper world, news -- not porn or virtual sheep -- would be the driving content force behind the World Wide Web. Households willingly would go into debt to feed their paid news habit, and newspapers like the Guardian and the New York Times would be so awash with money that they'd have to build an ark to survive the financial deluge. Women and sports columnists first!

But that's not the reality. The reality is that the newspaper industry is pretty well fucked. Regardless of the importance of their product, readers seem to be able to either forgo it entirely, or at the very least to survive by reading the aggregated, bastardised version of it that fills the pages of sites like the Huffington Post and Gawker. Some publications, like the New York Times, are less fucked than others. By all accounts the paper of record's porous paywall is doing fine business, as are the stricter walls around the Financial Times and Rupert Murdoch's Times in London. The torrents of traffic pouring into the coffers of the Guardian, the Daily Mail, and the Washington Post are helping to prove the ad-supported model too. But digital profitability remains a distant dream, for paywalled and pageview sites alike.

AND YET.

A tax on ISPs is just a ludicrous suggestion. For one thing -- where does it end? $3 for newspapers? How about another couple to save the record companies? Another buck-fifty for Hollywood? What about the poor booksellers? Let's throw them a dollar too. Live theatre is always struggling -- why shouldn't Internet users, who gladly trade "Avenue Q" and "The Book of Mormon" clips, not stump up to ensure the show can go on? Is there a single industry that can't make a convincing case that the Internet has affected their bottom line? Teachers, encyclopedia salesmen, strippers... Bail them all out, and pretty soon the average household broadband bill will dwarf Mitt Romney's tax return.

And even if the journalism tax was levied, who gets to decide how the cash is allocated? Leigh says it should be apportioned based on traffic, which pretty much ensures that every cash-strapped newspaper will ditch its Pulitzer prize-winning coverage in favour of a flotilla of cat videos and SEO headlines. Oh, brave new world.

Journalists like to think what they (we?) do is special. That without it, democracy will crumble. If that's true then, for an industry whose raison d'etre is to shape public knowledge and opinion, journalism is doing a really, really bad job of communicating its own importance. If you can't get people to voluntarily pay $3 a month to keep democracy alive then either a) democracy really isn't that important to people or b) you've got your messaging wrong. Either way, a tax is not the way to win over a public already unsure if it needs you.

And so we reach the point in an op-ed column when the writer is expected to reveal his  one big answer. But the truth is, there are no big answers when it comes to saving journalism. And nor are there likely to be. Instead, what will save journalism is a whole raft of small answers: paywalls certainly being one of them, smarter advertising certainly being another. But we need dozens, maybe hundreds, more. And it's the responsibility of every publication, small or gigantic, to dream them up.

Next week, my own modest contribution to the struggle -- NSFWCORP -- will announce another raft of small answers that we hope will fuel our continued growth. We've already committed to a paid subscription strategy that attracted over 3,000 subscribers in a little over a month. We piloted a sponsored subscription program, where companies could pay for free subscriptions to hundreds of readers at a time, in exchange for a whole load of social media gratitude. We've created innovative ways to allow readers to share articles without breaking down the paywall, and we've opened up our editorial discussions to reader scrutiny in the hope that increased trust will lead to a more loyal readership.

Those small answers have put us on a path towards profitability and have allowed us to pay a team of great writers and journalists to do fantastic work. The next batch of answers will -- insh'Allah -- propel us past our break-even point and begin to hopefully prove some wider principles about the future of journalism (with jokes).

For a publication of our size, the number of small answers required is far smaller than for a global newspaper -- but that's the neat thing about an entire industry focussed on creating small answers: Eventually we have enough to guarantee the future of even the largest publication.

The Guardian says it's committed to keeping its journalism free to the end user, and so it will need a thousand small answers in that area. Advertising, sponsorship, events and, yes, all manner of grants and tax breaks are all likely to be amongst them. What definitely won't be is forcing an entire country to pay a dumb, indirect tax to subsidise "free" journalism.