A French economist and author argues that an economic crisis is facing media worldwide and the solution is a new from of nonprofit foundation.
She said the growth of the Internet has created an oversupply of advertising that makes it impossible for all but the largest companies — Google, Facebook and a handful of others– to be successful. “With the Internet you have an infinite supply of advertising space,” she explained, causing advertising revenue to fall.
The result has been increasingly smaller news staffs and lower quality publications.
There is no information without journalists,” she said. “You cannot do the same job as a journalist in a much smaller newsroom.”
Alternatives to advertising-supported media include direct public support, which is common in Europe, or signature investments by wealthy owners, such as Amazon Founder Jeff Bezos’ purchase of the The Washington Post. But both come with potentially problematic control over the news agenda, she argued.
Her solution is a new form of nonprofit foundation that can benefit from charitable contributions but also purse commercial activities and re-invest profits.
A number of U.S. publications are already organized as nonprofits, including the venerable Tampa Bay Times in Florida, the new Texas Tribune and Voice of San Diego, but Cagé’s proposal is for a change in tax rules to give such organizations more flexibility while also decentralizing control.
Cagé, a professor of economics at Sciences Po Paris who earned her Ph.D at Harvard University, provided detailed statistics showing the decline of traditional media throughout the world’s developed countries.
Her data shows that the number of journalists at U.S. daily newspapers peaked at around 55,000 between 1990 and 2000, but has since declined by 20,000.
She said this is a challenge for society in general because life is getting more complex, yet there are fewer journalists to explain what is going on to general audiences.
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