When no news is bad news

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The rise of blogging, "citizen journalism" and free online content has been held as partly responsible for the demise of the newspaper industry. Dave Crouch argues the media corporations' greed is to blame for the thousands of journalists losing their jobs

Away from the newspaper headlines about the damage done to parliament by the scandal of MPs' expenses, democracy is under threat in the press itself. The recession is tearing great chunks out of the industry, which has already been squeezed by a long-term decline in readership.

On the national daily papers hundreds of jobs have been lost so far, with at least two titles teetering on the brink of collapse. In the local and regional press there is turmoil as the bosses' knee-jerk response to the crisis is to wield the axe. There has been a spate of disputes - at the Yorkshire Post in Leeds journalists have taken 13 days of strike action over jobs, with three and four-day strikes at the Glasgow-based Daily Record. But the sheer scale and speed of the slump has seen union activists struggling to convince their colleagues that we can halt what seems to be the industry's inevitable decline.

There is also a chorus of predictions that the internet means the end of the newspaper. The rise of "citizen journalism" is given as another reason why journalists should give up fighting for their jobs. One newspaper boss says he can produce a better product "done by enthusiastic amateurs for next to nothing".

At first glance, the newspaper crisis does indeed look like a high-speed car crash. Between 3,500 and 4,000 workers - about 10 percent of the workforce - have lost their jobs in regional and local papers in the past six months, while some 70 titles have closed down since January 2008. Enders, the media consultants, say half the jobs in local papers - that's 20,000 people - could go in the next five years. In January the London Evening Standard was sold off for £1.

Thanks to soaring unemployment and the slump in the housing and car markets, the three mainstays of classified advertising for regional and local papers have disappeared. Advertising revenue is predicted to fall by a quarter this year - media analysts say it will halve between 2007 and 2012. And national daily newspaper circulation fell over 10 percent between 1995 and 2005.

Things are so bad that the government has said it is considering subsidies for regional newspapers. More likely, however, is that it will relax the media competition laws so that two of the "big four" conglomerates that dominate the regional sector can buy up the other two. The result will be even more job losses as the surviving duopoly centralises its operations and churns out identikit newspapers across the country.

Collapse

Over the Atlantic the newspaper crisis looks even worse. By the end of this year US daily papers will employ between 20 and 25 percent fewer journalists than in 2001. Big name titles have gone bankrupt or closed and gone online, while the New York Times is on the brink of financial collapse. According to a recent Pew survey of more than 250 papers, well over 60 percent reported cutting the space given to foreign news - at a time when the US is involved in two wars and the economy is a huge global story. National news had suffered almost a 60 percent cutback in many papers, and business coverage had been reduced in a third of the papers.

So things look pretty bleak. And with less information on fewer pages, so the argument goes, there will be less democracy too. Is there a way out?

First, as in any economic crisis, the bosses are using it as a smokescreen to get their way. They exploit the dismal outlook to attack jobs, wages and conditions, and boost profit margins. When you look beyond the short-term panic - often being whipped up by newspapers themselves - at the underlying situation, you find that most papers are still profitable. The difference now is that profits are lower than before.

It is a widely acknowledged fact that for decades newspaper companies have enjoyed profit margins unrivalled not just by other news media but by most other industries - 20 or 30 percent was considered usual, when Tesco, for example, would be satisfied with a 6 percent margin. The recession has hit these margins, but they are still high compared to other industries.

Take Johnston Press, for example, the owner of the Scotsman and 17 other daily papers in the regions, plus over 300 weeklies. The company slashed over 1,100 jobs last year alone - over 17 percent of its workforce. Yet its profit margin was 24 percent in 2008, down from 35 percent a few years back, but incredibly high all the same. And still it recorded a loss last year of £430 million. This brings us to the nub of the newspaper crisis - Johnston Press made this huge loss because it was up to its eyeballs in debt, the cost of which has shot up because of the credit crunch.

Johnston is not alone. From the 1980s as neoliberalism let rip, newspapers, like other media, came to be seen by shareholders as just another source of profits and dividends. Because they had good cash flow, companies could borrow huge sums against that income, which they used to buy yet more newspapers, magazines or TV stations. This crazy buying spree by megalomaniac management has now turned sour.

There are newspapers that have healthy readerships and make money despite lower advertising, but their parent companies are being dragged down by their debts. The National Union of Journalists calculates that local papers could break even by sticking to the traditional advertising model, but that this would require that bosses stopped using their titles as "cash cows" and started pumping money into quality journalism.

Another consequence of the neoliberal onslaught on the press was that revenue left over after servicing debt went into massive payouts to senior managers and shareholders.

The result of "harvesting the assets" in this way is that the newspaper crisis is largely one of chronic underinvestment - they are often empty shells from which the value has been sucked out. Instead of using the good years to invest and put aside money to help papers through the bad times, owners just looked at the bottom line at the end of each year and dished out the mega-million bonuses accordingly.

Pay in the press is low - over 50 percent of journalists in Britain earn less than the national average. They are often reduced to "churnalism" - tied to their desks and churning out flimsy news stories based on press releases or centralised wire services. Media bosses' almost blind faith in the internet also means that newspaper journalists are increasingly expected to produce written, audio and video material for the web, but with no extra resources.

The result is that quality has suffered. As the BBC's Andrew Marr puts it, real news is being squeezed out: "The biggest new area of mass reporting is simply shopping - 'news' as thinly disguised advertising." With more journalists office-bound, says Marr, with reporting seen as expensive and with the massive global PR industry pumping out ready-made stories, it's no surprise that you can leaf through seven or eight papers and find the same "news" in each. No wonder newspaper circulation is falling.

Flimsy

The process of cuts and speed-up has been going on ever since the print unions' defeat at Wapping in 1986. What is more, the papers have often got the big news stories wrong. On Iraq they largely - with some honourable exceptions - swallowed the government line on weapons of mass destruction. For years the press encouraged readers to load themselves with debt and play the property market, but how many of them predicted the credit crunch?

Papers are all too often guilty of pursuing the "flat earth news" stories identified by Guardian journalist Nick Davies in his bestselling book of the same name. They repeat flimsy lies or distortions and fail to dig out the truth, partly because the truth comes at a price that media owners are not prepared to pay.

These problems put the hype about internet and citizen journalism into perspective. It's one thing if you can go online to get news that you can't find in the papers, but it's quite another when the internet merely means free access to the same old dull stories you get in the press. Good bloggers can winnow some of the wheat from the online chaff and provide comment or analysis that is missing from the mainstream media. But there are obvious limits to the information you can uncover while sitting at a computer screen.

"Citizen journalism" is a fancy name for what readers have always done - provided information or eyewitness accounts. Journalism is a skill. For the voices of ordinary people to be heard, society needs people trained to compile, package and project stories into the mainstream. There is also a downside to citizen journalism. Under the slogan of "democratisation", the BBC is opening up its coverage to the unrepresentative, rabidly right wing "citizen journalists" who dominate the interactive pages of its website.

So newspapers are reaping the whirlwind of 25 years of neoliberalism, and it's little wonder people feel we could do without them. It's only when they do their job that we realise what we are missing. Last month the Daily Telegraph became essential reading for socialists as its reporters blew the lid off the cosy world of MPs' expenses. After the death of Ian Tomlinson at the G20 protests in April, Guardian journalists - with the help of campaigning photographers and a citizen journalist - revealed brilliantly how the police had lied.

Allowed to do their job, journalists provide a public service that is essential to democracy. But the free market is destroying this service. Where newspapers are on their financial knees we have to argue that the government must step in to transfer control to people who are committed to journalism as a public service. Those people should be accountable to the community they serve and to their staff - not to shareholders.

With parliament in turmoil, some trade unions are proposing to stand candidates against corrupt or right wing MPs. But they should also be supporting newspapers and journalists that report on the labour movement, providing essential oil for the wheels of working class democracy.