Thoughts, Ideas, Opinions ... » Murdoch, advertising, social media and democracy

At a time where people have already forgotten the dismal participation rate of the June European elections (less than 40% of people voted) and the fact that people got killed weeks later in neighbouring Iran (if Turkey joins the EU...) for the right to fair elections, it was interesting to see that many magazines ranging from Wired to .Net all reported the comments by Murdoch last May that people will have to pay for content online. These are worrying news for democracy.

Many now say that the newspaper industry is on the verge of collapsing unless it charges more for content. Coming from the CEO of News Corp who runs influential papers going from the Sun to the Wall Street Journal and is reknown for his business acumen, it crystallizes what many already believe: the revenue structure of a news website does not allow it to fund the long and insightful articles that a “traditional paper” is expected to produce, and these off-line papers, themselves suffering from the loss of classifieds revenues and the decline in ad spent, can’t subsidize websites anymore.

There is a big issue if advertising can’t finance content : access to (close to) independent opinions is a key pillar of equality in front of  information and analysis and thus the ability to forge one’s mind  at (almost) no cost, it-self a  crucial ingredient of a proper democracy.  Knowing that professional people are paid to check and think through what is done and proposed is an absolute imperative for the necessary checks & balances in a grown-up society. It is absolutely fantastic that people can have a running discussion about Obama’s policies or religion on twitter or in a facebook group but we also need the five pages analysis of his first 100 days in office like I read in the print edition of the New Stateman last month. And for these to happen, off-line or on-line, you need advertising to fund the delivery of this free information. And I am not even mentioning the effect of offering something for free as a disruptive model that shakes industries as mentioned by London-based VC Fred Destin in his last column in NMA.

Something that is too often overlooked is that “consumer society funds democracy” : it is because people compete to tell you about their new shampoo or cars that you can access a wealth of information at no or close to zero cost.  Free press  -both in costs and in independent opinions- cannot exist in a country that has a weak advertising industry. It is fitting to see that the MP expense scandal in the UK was published by the Daily Telegraph, a paper which derives half most of its revenues from advertising (the rest being cover price). This would not have happened in a country where papers cannot count on advertisers, meaning the appetite of their audience for ads.

The issue here goes way beyond off-line vs on-line, bloggers vs journalists:  We simply need a thriving advertising business to fund debate in a democracy. And that is where social media comes to play : by allowing readers to contribute, create their blogs or even manage entire communities under their colors, which users are usually happy to do for free, papers can not only reduce the average cost of producing content and distributing it, but they can also generate additional sellable inventory.

To maintain a model where it is possible to get content for free, papers need to go even further by finding models where readers pay to use services. That was the case with classifieds, where you pay to publish content, which many media groups have lost to other companies for reasons I have never understood. At a time where the appetite of the audience to publish seems endless, from micro-blogging to private social networks, papers could think about providing publishing services to their readers, whether to generate advertising or subscription revenues.
There are certainly other models; what is key is that papers, online and off-line, diversify revenue streams enough so that they maintain the ability to give news to everybody for free. We cannot have a world where getting informed is the privilege of those being able to afford it.