Wednesday, March 18, 2009

Cartels are bad except when they’re not

House Speaker Nancy Pelosi has written a letter asking the Justice Department to exempt Bay Area newspapers from customary antitrust restrictions. I'll leave aside my cynicism about someone who normally rants against business control and monopolies flacking for a local paper that provides fawning coverage.

However, the reality is that for major American newspapers, antitrust exemptions — in the form of joint operating agreements — have failed and always will fail.

The Seattle Post Intelligencer (now defunct) was part of a joint operating agreement, as was the Rocky Mountain News.

The JOA is supposed to allow business cooperation but editorial competition to allow multiple papers to survive in a given city. However, towns with multiple dead tree newspapers are an anachronism that will eventually go away.

In some towns, there are multiple attempts at building alternative media. For example in San Diego there are two online alternatives: the non-commercial Voice of San Diego will be joined today by the advertiser-supported San Diego News Network. Both are up against the local news monopoly, the San Diego Union-Tribune — which is still for sale.

As has been true for a decade, the firms don’t need to find ways to save their dying 20th century business models, but to instead find a new business model that acknowledges the impact of the Internet and Google on their traditional business.

No comments: