Sunday, March 1, 2009

Did the Newspaper Preservation Act encourage newspapers to ignore the competition?

The Rocky Mountain News' failure represents the fall also of the joint operating agreements (JOAs) enabled by the Nixon-era Newspaper Preservation Act of 1970.

Catherine Tsai writes for the AP:
The joint operating agreements that were meant to save dying publications in two-newspaper cities like Denver are themselves dying off.
What are the JOAs about? Is their impending death a tragedy? Consider:
  1. The Newspaper Preservation Act allows an antitrust exemption if two competing newspapers, via JOAs, merge business/printing to stave off the failure of one of them. Questions to ponder: (a) Is two newspapers thus maximizing revenues by controlling price an affront to the free marketplace? (b) Does it potentially affect choices available to readers/advertisers? (c) Does it affect our expectation of the press as watchdog? (d) Does it create an uneven playing field for magazines and other journals in the market?
  2. For approval of a JOA, the newspaper publishers must apply to the U.S. attorney general. Questions: (a) Is that akin to an 18th century printer applying to the British monarch for a license? (b) Does it contradict our understanding of the First Amendment in which starting the 1860s a lack of prior restraint -- discriminatory taxes, licenses, injunctions, whatever -- is a precept of the freedom of expression?
  3. JOAs have killed many competing papers compared to the few benefited. Question: Did the Act defeat itself by catalyzing the very monopolies it was supposed to preempt?
Ms. Tsai further writes:
The [A]ct assumed that the costs of putting out a newspaper every day were so high that two newspapers wouldn't be able to survive in the same town, [Michigan State University journalism professor Stephen] Lacy said. But the real issue, he said, has been ad sales.

Advertisers tend to pour dollars into the paper that draws the most readers. The more popular paper would use its cash from advertisers to gain more readers, thereby drawing more advertisers in a spiral that eventually weakened the second newspaper.

So why are newspaper managements overwhelmingly in favor of the Newspaper Preservation Act? History offers a clue.

American newspapers' record of supporting expressive freedom may be overrated. John Lofton has found that newspapers tend to favor efforts to suppress deviations from political orthodoxy over any right to dissent -- except when their own freedom is at stake. In The Press as Guardian of the First Amendment, his provocative tome of 1980, Mr. Lofton writes, "In the matter of war and political ideology the press has been reluctant to defend freedom of expression when the challenged material offended the dominant views of its own constituency" (p. 281).

With their bottom line on the line, accepting the protection of the law must seem like a no-brainer. The Newspaper Preservation Act offers the newspapers a mirage of security, but it probably makes them take their eyes off the ball -- the multimedia competition.

Look where that has got them.

We will miss you, Rocky.

Also read:
Why, oh why did the Rocky Mountain News die?

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