Bailout Mania

First there was the mortgage industry bail-out, then the auto industry bail-out - what's next? Well in at least one state it could be newspapers!

NEW YORK (Reuters) - Connecticut lawmaker Frank Nicastro sees saving the local newspaper as his duty. But others think he and his colleagues are setting a worrisome precedent for government involvement in the U.S. press.

Nicastro represents Connecticut's 79th assembly district, which includes Bristol, a city of about 61,000 people outside Hartford, the state capital. Its paper, The Bristol Press, may fold within days, along with The Herald in nearby New Britain.

That is because publisher Journal Register, in danger of being crushed under hundreds of millions of dollars of debt, says it cannot afford to keep them open anymore.

Nicastro and fellow legislators want the papers to survive, and petitioned the state government to do something about it. "The media is a vitally important part of America," he said, particularly local papers that cover news ignored by big papers and television and radio stations.

Now my friends Gary Gross and Ed Morrissey have both said their piece on the story and I agree with them both (to an extent) as to whether we should bail them out. However, as Gary, Jazz and I started to discuss on our Blog Talk Radio show this morning, there are things the news media CAN do to stave off the necessity of bail outs.

The first and most important thing that they can do is to unblur the line between their news coverage and the editorial page. A classic case in point can be found almost daily in the NY Times - specifically this story from the business section.

T-Mobile and AT&T contended in their responses to Mr. Kohl that the pay-per-use price of a message is relatively unimportant because most messaging is done as part of a package. With a $10 or $15 monthly plan for text messaging, customers of T-Mobile, AT&T and Sprint can effectively bring the per-message price down to a penny, if they fully use their monthly allotment.

T-Mobile called Mr. Kohl’s attention to the fact that its “average revenue per text message, which takes into account the revenue for all text messages, has declined by more than 50 percent since 2005.”

This statement seems like good news for customers. But consider what is left out: In the past three years, the volume of text messaging in the United States has grown tenfold, according to CTIA — the Wireless Association, a trade group based in Washington. If T-Mobile enjoyed growth that was typical, its text messaging revenue grew fivefold, even with the steep drop in per-message revenue.

If the core reason for the investigation is the high cost of text messaging and the cost of text messaging has gone DOWN how can that be anything BUT GOOD for the consumer. It should not matter to the NY Times reporter if people are texting more and thus causing the the revenues to the cell providers to go up. It is simple supply and demand! As costs of the goods go DOWN, the demand for that good goes UP!

The second step is the papers need to go back to reporting on local issues! One reason why the USA Today newspaper is successful is it fills a niche for national and world wide reporting. We don't need the Star Tribune or the Salt Lake Tribune regurgitating the same information. However, during last years transportation debate (in MN) the local papers never did talk about what was IN the bill - they just reported who said what about the bill. It took the efforts of local bloggers to uncover the nuts and bolts of the bill. Some (myself included) ended up live blogging many House floor debates so that our readers could see what was being said on the issues by the Legislature. We did the work our newspapers have abdicated!

Third they need to go back to being a real watchdog. If a Republican elected official is caught with his/her hand in the till report it, but by God if a Democrat is caught in the same position that too needs to be reported! Don't play favorites in your reporting. Right now the media picks and chooses which stories to report on based on who it embarrasses. A classic case in point is the flap over Caroline Kennedy Schlossburg. The media has been raking Mrs. Kennedy Schlossburg over the coals for her lack of qualifications to hold office - just as they did to Governor Sarah Paline. Yet they never said anything much about Senator Barack Obama's wafer thin qualifications to be President. Until they become a real watchdog again, they will find themselves targets of another watchdog....bloggers!

Personally - I love newspapers. There is nothing I enjoy more than sipping a cup of coffee while reading the morning paper. However, that does not mean that I will read the paper just to read a paper. I did not subscribe to the Star Tribune, but I did subscribe to my local paper. Why - because they reported on the local issues that the Strib never covered! They would talk about what was in the education bill that was being debated in St. Paul - something the Strib never did. I, like many other news consumers, will buy a paper IF it gives me a product that I wish to purchase! It is that simple. If the papers are bleeding red ink, maybe they need to re-evaluate the PRODUCT that they are putting out, rather than putting a hand out. Fix the product and I guarantee that the revenue stream will follow....

It is, after all, simple supply and demand.