The newspaper industry has crawled up Capitol Hill once again to beg for an antitrust exemption it thinks it needs in its fight with Google and Facebook for advertising dollars.
Currently, Google and Facebook collect 73 percent of all digital advertising. Members of the news industry believe that the two tech giants have exploited their dominance of the web to unfairly collect digital dollars that rightfully belong to the news organizations. The Journalism Competition and Preservation Act of 2019, introduced in the House in April, and its Senate version, would allow print and online news companies to cartelize into a united front against Google and Facebook. Washington Post media columnist Margaret Sullivan cheered the bill last week and other newspapers (Chicago Tribune, Cleveland Plain Dealer, Columbus Dispatch, and others) have editorialized in favor of the exemption. Under the new law, which would sunset in four years, the cartel could collectively withhold content from Google, Facebook and other sites and negotiate the terms under which the two tech giants could use their work. Anti-trust law currently prohibits such industrywide collusion.
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This proposed antitrust exemption—being pushed by the 2,000-plus member News Media Alliance trade group—is misguided on several levels. For one thing, it would be wrong to pass a law that would prop up one media sector by selectively bestowing special competitive privileges on it. The bill would not allow broadcasters to join the new cartel. The bill’s supporters also falsely blame Google and Facebook for the newspaper industry’s decay when circulation declines—especially when measured per capita—predate the emergence of the web.
In a notable 1976 Los Angeles Times piece, press chronicler David Shaw wrote in his lede, “Are you now holding an endangered species in your hands?” Shaw’s boss, Los Angeles Times Publisher Otis Chandler, conceded that the Times—or any other metro paper—was “really essential” to not even 50 percent of its readers. In these pre-web days, as newspapers became less popular (and sometimes more expensive), advertisers moved their dollars to radio and television. Nobody in the news industry called for government protection back then just because advertisers started spending money selling their wares on the local UHF station.
The bill’s supporters overstate the predicament of newspapers. Yes, the conventional news business is in decline, with 1,800 titles out of 9,000 going out of business or merging since 2004. Total newspaper advertising revenue has fallen dramatically since 2006. So something is different now. But it’s not all bad, either: According to the Pew Research Center, both circulation revenue and digital advertising revenue are on the rise. Print advertising once accounted for 80 percent of revenue, industrywide, for newspapers. Now, newspapers aren’t just a print business. At the New York Times, digital advertising and digital subscription now bring in about 40 percent of revenue.
The newspapers that are struggling to compete for digital dollars have partly themselves to blame. In 2000, classified ads made up about 40 percent of newspaper revenue, the Minneapolis Tribune reports. By 2012, that figure had dropped to 18 percent, but Google and Facebook played almost no part in this collapse. Craig Newmark built a better—a much cheaper—classified mousetrap for consumers at Craigslist. eBay also took some of the newspaper market share. But the newspaper industry itself undermined the conventional print classified business as much or more than did Newmark. As I’ve written before, newspaper companies were quick to move classified action to the new, online companies they founded. Gannett, McClatchy, Knight Ridder, Tribune, Times Mirror, Central Newspapers, A.H. Belo, and the Washington Post Co. banded together in 1998 to sell automobiles—long a classified print product—on Cars.com. In 1999, Cox newspapers created Autotrader.com. In 2000, Knight Ridder and Tribune purchased CareerBuilder.com, and two years later Gannett bought in. Apartments.com was yet another co-venture of five newspaper media companies.
One measure of how lucrative online classified ads became for the newspaper industry could be seen when the Graham family sold the Washington Post to Jeff Bezos for $250 million in 2013. The Grahams retained their share in Cars.com, which they later got $408.5 million for in 2014.
Never forget that when newspapers were king and held pricing power over advertisers, they gouged advertisers with ever higher ad rates, and they didn’t mind going to Congress to protect their position then, either. In 1980, Washington Post Co. CEO Katharine Graham lobbied Congress to block AT&T from starting its own “electronic yellow pages.” When a senator told Graham that what really worried her was a new product that would destroy her advertising base, Graham said, “You’re damn right it is.”
The backers of the Journalism Competition and Preservation Act of 2019 seem to think that a segment of the news industry has a “right” to the levels of revenue it once enjoyed. That’s almost as crazy as President Donald Trump’s protectionist tariffs! In her column, the Post’s Sullivan argues that we should pass the antitrust bill to give newspapers a breather because they produce a valuable good. I agree that newspapers are the greatest media ever invented. I swaddled my children in newsprint and fed them newsprint porridge as their first solid meals. But my nostalgia for the great newspaper era is no justification for putting a federal thumb on the scales in the direction of newsprint. If consumers are deliberately spurning newspapers en masse and flocking elsewhere for news and advertising, it’s not the business of Congress to steer them back.
Instead of petitioning Congress for special privileges in the Katharine Graham manner, the news industry needs to compete. If it can’t wrangle enough customers, it deserves what’s coming to it.
Send your favorite Katharine Graham story via email to [email protected]. My email alerts tried to sell its 1975 Triumph Spitfire through a Post classified. No takers after three days. In a couple of hours, Craigslist found a buyer. My Twitter feed almost reads like a classified ad. My RSS feed calls for the abolishment of all antitrust laws.