Desperate times for the newspaper industry have sparked a rash of terrible ideas. The overwhelmingly left wing industry flaunts its ignorance of the way markets work, and its collectivist/monopolist mentality. The latest embarrassment comes from Tim Rutten of the Los Angeles Times, who sees economic redemption in a cartel arrangement, to control the dissemination of information.
Washington ought to extend to the newspaper industry the same sort of antitrust exemption that Major League Baseball has enjoyed since 1922. ...
... as long as some major newspapers are giving their online journalism away... nobody can risk charging for theirs. That's where the antitrust exemption would come in: It would allow all U.S. newspaper companies -- and others in the English-speaking world, as well as popular broadcast-based sites such as CNN.com -- to sit down and negotiate an agreement on how to scale prices and, then, to begin imposing them simultaneously.
An information cartel! What a spectacularly stupid idea. Does Rutten understand what he is advocating? Perhaps not, as the comparison he makes later is entirely incorrect:
We have, in our own recent history, a striking example of a free information medium that moved easily into the pay category: Thirty years ago, if you wanted to watch television, you went to the store, bought a TV set, came home, plugged it in and that was it. You didn't have to pay for the content. Now, however, most of the country pays fees for cable or satellite hookups. It's true, of course, that those transmission systems also added value to the viewing experience -- uncut, commercial-free movies, live local sports, 24-hour news. Newspapers need to think harder about how they too can add value.
Apparently Mr. Rutten didn't notice that no cartel was involved in establishing the pay model for television content. Providers who charged for content provided extra value that consumers were happy to pay for. There was no need to sit down with broadcast stations and impose a cartel.
The fact is, most metropolitan newspapers have enjoyed de facto local monopolies for decades. Despite this position (or perhgaps because of it), they have persisted in using an outdated business model.
Is it any wonder an industry characterized by such poor thinking is on the brink of disaster?
Hat tip: Ed Lasky
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