Government subsidies to legacy media prevent evolution of the industry, discourage innovation

Federal Support for Journalism

The Internet has disrupted media models in place for the last century, in part because it has reduced barriers to entry and new entrants have innovated in ways that legacy media have difficulty competing with. However, in a democracy the government is not well placed to reverse those disruptions. The media, like any other business, continually evolves. As each innovation enters the market, it displaces audiences for the legacy players.

But does that innovation mean we should prop up services that fewer people consume? No. We allow other industries to adapt to new market conditions. Sometimes that means certain industries and companies close. But they are replaced with something else.

As much as it might sadden us to see traditional news organizations and their employees disappear, it is simply untenable that the government try to “save” this sector. So far, the attempts have not resulted in saving either reporter jobs or news organizations. Subsidizing the media has not brought back the former audiences. Innovation must come from media organizations themselves and individual content providers. If the current players can’t do it, new ones will step in, so long as government doesn’t get in their way.