Comment: Phone hacking, journalism and the free market

The row over phone hacking at the News of the World reveals why we need journalism to be state-funded.

By Ian Dunt

Rather amusingly, the News of the World's disparaging statements on the New York Times' phone hacking story concentrate on the fact that it involved unnamed sources. Obviously, a British tabloid would never rely on anything of the sort. It's one small irony in an affair that's bursting at the seams with them.

Here's another: it took decent, old school journalism to help reveal what modern journalism may be becoming.

It's not the first time this irony has arisen. Last year, Nick Davies brought the phone hacking story back into the spotlight through some old-fashioned research and cultivation of contacts. Davies' book, Flat Earth News, is probably the most devastating account of the decline of journalism in Britain, so it is quite fitting that he should be at the centre of a media storm that reflects just how shoddy things might have become.

The New York Times dedicated considerable resources to this latest attempt to bring the story kicking and screaming into the daylight. Three reporters were given five months to produce the story, according to the Press Gazette. What was the result?

The director of communications in Downing Street is in seriously deep water. The judgement of the prime minister is being brought into question. The first damaging stains on a new government have been revealed.

Beyond Downing Street, there are serious allegations that Scotland Yard failed to properly investigate the case due to fears over its relationship with the News of the World. The media empire of Rupert Murdoch is under new scrutiny. The ineffectual Press Complaints Commission has been humiliated once again. Public figures from across British society - including politics, arts and sports - may have had their privacy breached. That's a decent news story. That's the kind of thing that is detonated, rather than published.

The News of the World released a statement today alleging the New York Times had commercial rivalry on its mind (Murdoch owns its main competitor, the Wall Street Journal). Perhaps it does. It makes little difference. The New York Times didn't discover the story, it didn't even break it. But it managed to move it forward by being willing to dedicate resources. And that is the really important issue at stake: the resources available to journalists.

A further irony to the affair is that the story put one of Murdoch's publications in the spotlight. Murdoch, despite all his flaws, is at least trying to find a sustainable model for the future of journalism. He is doing this by taking the plunge and putting the Times behind a paywall. So far, I haven't met anyone who believes it will work. The Financial Times can succeed in it, as can business-to-business publications, because the product they offer is exclusive. No one else carries that content.

Plenty of people carry the sort of news and comment the Times carries. There are rumours Murdoch fundamentally misunderstands the internet to the point where he is unable to navigate it without assistance. This is irrelevant. We must all be grateful to the Times and its owner for being brave enough to plough ahead and give it a shot. Now we have a chance to assess the ramifications of such a move and whether there is any chance of it succeeding elsewhere.

Because what we know right now is that advertising does not in general provide enough money to sustain quality journalism. Even with millions of hits, media outlets such as the Guardian are unable to sustain their business model. We are failing to monetise the product.

The consequences of this are monumental. More and more redundancies mean fewer and fewer journalists are available to write the same number of stories. It's harder to sell the product when customers are offered free versions left, right and centre, so the pressure is for even more content being produced by dwindling teams of hacks. With such little time to research and the constant threat of a legal attack under Britain's draconian libel laws, journalism becomes safe. Safe journalism is celebrity stories. Safe journalism is restricted to government pronouncements, which can't prompt a lawsuit. Safe journalism doesn't investigate corporate misbehaviour.

It's a far cry from the sort of thing that got most journalists into the profession. That motive was best summed up, for me at least, by writer Warren Ellis. "Journalism is a gun," he said. "Aim it right and you can blow a kneecap off the world."

For that you need time. Time is the most important quality a journalist can have. That's what lets you blow kneecaps off the world, and by that I mean: damage the police, the governing party and the media - the pillars of the British establishment.

There's an argument - and in the current climate I expect very few people to agree with me - that journalism should be treated in the same way as education or the health service. It should be treated as an irreducible public good and therefore protected from the consequences of capitalism.

Once upon a time, advertisers would attach themselves to serious newspapers because of their exclusives. Very few people would actually read those exclusives. They were essentially a loss-leader. They would suck up resources and only be of interest to a minority of readers. But advertisers wanted to be associated with serious journalism, with important journalism.

It costs a lot to produce that sort of stuff. The Times estimates that the cost of maintaining a Baghdad correspondent is £1 million per annum. When the Israelis went into the Gaza Strip in 2008 and shut out journalists, they resisted liberal protestations with the argument that if the media cared so much about Gaza it would have had at least one journalist there before they went in. Not one British newspaper had anyone there - and this isn't some barely known part of sub-Saharan Africa, this is the main hotspot in the Middle East.

It costs a lot of maintain foreign correspondents, or to put a team of three on research for months. But that's the only way to deliver proper investigative reporting. Without it, the strong celebrate. Governments face less questions, news becomes gossip and tittle-tattle, corporations remain unmolested.

Proper journalism is an essential public good which is too vital to be left to the unpredictable effects of the free market. What we are experiencing is a fundamental market failure, as significant as that of climate change. We need to start debating state funding as the default position for serious journalism in Britain. Either that, or we can keep on allowing foreign newspapers to reveal the cracks in our society for us. Quite apart from any other argument, that seems too humiliating to endure.

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