Half Past the Month: ‘False’ News

December 20, 2016

“Newspaper editors separate the wheat from the chaff and print the chaff.” — Adlai Stevensen

by Craig Ladwig

You won’t read any of this in your morning newspaper but Indiana is hurting for news, “false” or otherwise. The Associated Press Bureau here is minimally staffed. The capital city newspaper, once the state’s arbiter of sound public policy, has pulled in its horns. In sum, Indiana no longer has a statewide information system. It will need one.

Indeed, if you ever wanted to own your own information system, be it a blog, web site or newspaper, now is the time. Circulation and readership figures for your established competitors are heading to the floor. Worse, believability and trust, on which their advertising rates are ultimately based, have deflated.

The reasons are complex and hotly debated by the various players. Be forgiven if you are confused by the inside-baseball distinctions between “false” and “real” news. The important thing is that the industry, as has been the case with most industries in a free market, is entering a period of fragmentation. That means prices, whether you are buying an established business or creating a start-up, will never be lower.

It also means risks will be high. To minimize those risks, there are certain things an investor should know about private-sector information systems.

The Niche — Traditional systems, newspapers specifically, belong to that once-important classification of businesses that went directly into the home, a niche now being revived by Internet technology. That means that if you want to appeal to significant aggregate buying power, your content must appeal to the home of a middle-class family. Boring? Perhaps, but a 1970s advertising textbook explains the logic: A consumer might not be put off by the frightfully strong super heroes or even monsters on a cereal box she buys off a supermarket shelf, but milk (once delivered to a family’s doorstep) was sold by the charming and innocuous Elsie the Cow. A current example would be the success of HGTV, where the average viewer is a college-educated, suburban woman with household income of $83,600 a year, just who advertisers want to reach. Newspapers have forgotten this; the new media will have to learn it.

Management — Information systems are exciting places to work, utilizing a variety of talents, both practical and creative. Wages, though, are inordinately low considering the required skill sets. Positions tend to be filled by the young and energetic, subsequently those of a liberal bent. Until the 1980s, for reasons explained above, this tendency was checked by senior editors directing authoritarian copy and news desks. Think of those editors as adult supervision; you will need some if you intend to be influential.

History — Digital revolution or not, Western Civilization defines three types of information systems. You will have to choose one of them: 1) The “Official” model, to represent the wishes of a king, a pope or central government; 2) the “Corruption” model, beginning with the Protestant Reformation, to use the new printing press to oppose arrogant rule with a stress on accuracy and specific detail; or 3) the now predominate “Oppression” model, beginning with Joseph Pulitzer and Horace Greeley and their conviction that the journalist must see that social and political problems arise from externalities and not from personal corruption, their job being to spotlight injustices and wrongs. Its rationale, according to Dr. Marvin Olasky, a journalism historian, is “if man’s environment is changed, man himself changes, and poverty, war and so on, are no more.” It now is being suggested that such a high-minded responsibility be publicly funded in some way.

Profits — As ambitious as are the goals of the current Oppression model, the Corruption model was actually the more expensive. It required the ways and means to ferret out the truth in the mazes that invariable wind through a city hall, a statehouse or a capitol, not to mention a crony capitalist’s executive suite. It costs money to be predictive and therefore trustworthy, which is the coin of any information system. The Corruption model began to be abandoned in the 1960s and 1970s as individual publishing families, pressed by inheritance taxes and regulations, sold marginally profitable or labor-pressured properties to corporate chains. The new owners, sitting on monopolies, adopted the more practical Oppression model and insisted on higher profits. For example, we are told that the Pulliam family, which put a value on its statewide influence, would suffer profit margins below six percent. In contrast, the succeeding Gannett chain pushes its managers toward 20 percent margins even at the expense of staffing, statewide circulation and legislative coverage.

Organization —The reason that corporate management has failed to either maintain information systems or make a profitable transition to Internet-based ones is that such systems need on-site individual owners, e.g., a publisher. Widely held corporate owners and their revolving management teams are not meant for an industry with such a delicate link to constitutional liberty. For the First Amendment is written to protect the rights of individuals, not boards of directors. More practically, any information system has a political cliff or boundary to the edge of which reporters and editors can feel free to gather news without fear of retribution. That must be proscribed by an individual, an owner, preferably one with roots in the community; it cannot be continually shifting as new managers arrive from outside.

Politics and Principles — The owner of a local information system must be willing to define the product politically when principle is at stake. That means taking courageous positions (risking both advertisers and news sources) and not fudge differences. For the trustworthiness of your information system will depend not on whether readers share all of its particular positions but whether they believe it is designed to pursue the truth, however imperfectly. Attempts to manipulate or soften political disagreements or boost special interests negate that value. In this regard, the owner would be wise to write down the creed that will guide his or her efforts. To get you started, I refer to one of my favorites, written by Walter Williams, the first dean of the University of Missouri School of Journalism. It serves nicely even today more than 100 years later in delineating “false” and “real” journalism:

A Business Plan — The scope of the new information systems must be large. Steel mills do not begin with someone hammering together nails in a back yard or, to our point here, effective information systems do not begin with would-be Citizen Kanes tapping away at a computer keyboard in pajamas (Matt Drudge and Rush Limbaugh aside). A business model for Indiana must correspond to formidable operational challenges. Its users will expect a comprehensive product. That means when they hear a siren in the night the pertinent report is in the next news cycle. It means that over time and throughout the state they feel well-informed and prepared for major events. They expect to see expertly reported stories relating their children’s’ triumphs on track and football fields, basketball and volleyball courts and all manner of stage and forum. They resent having to pay advertising rates to place obituaries. And they need objective, measured and dependable assessment of changes in their natural, political and economic environments.

All of this is being played out in microcosm as Facebook tries to make a painful transition from being a technology platform, for which it is well suited, into a news provider and decider, for which it is not. If you follow Mark Zuckerberg’s stumblings as a self-styled editor, it will become clear that the Internet revolution has not changed the nature of information systems, only their delivery.

For it boils down to this: Trustworthy information remains expensive to collect and difficult to organize. Even so, a statewide newspaper, blog or whatever, is desperately needed. Indiana will not work well without one — as good a reason for you to get into a business as you will find.

Craig Ladwig, editor of the quarterly Indiana Policy Review, is a veteran of 50 years in community and metropolitan newspapers.

Note: The author does not include broadcasting media in his survey of the state of journalism. Broadcasting, because of its structure and delivery, functions as an echo chamber carrying information developed by the other information systems or, worse, as a tool of posture and posing (the exception being disasters and fast-breaking events). And since the early days of Dan Rather, the first anchor chosen in a screen test, who pretentiously rolled up the sleeves of a perfectly starched shirt with a carefully disassembled tie to pose for the cover of “The Camera Never Blinks,” it is better understood as a system of competing celebrity cults.


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