Tragedy of the Commons?

This begins with the assertion that great journalism can create immense societal value. This isn't always easy to quantify, but if one uses the example of graft which results in inflated contracts on a local level, there's at least some sense of magnitude.

Imagine that a journalist exposes this situation. A local official grants a contract to a firm without proper purchasing protocol, resulting in millions of wasted dollars for a community. For arguments sake the estimated waste is $5M. Let's assume this occurs in a moderately large city, like an Atlanta or Phoenix. Just for ease of math, the population is around 5M people in the metro area. Under this circumstance, this expose just saved each man, woman, and child $1 of wasted tax dollars.

This argument sounds a lot like one that is made when journalists talk about how important they are to democracy. It fuels their drive to expose wrongs, and has lead to some great and honorable works.

The question on the table is: Who receives the monetary benefit for this effort?

In a "fair" world, some of the "savings" might be shared with the newspaper and journalist. These types of incentive systems exist in corporations who reward employee suggestions for cost savings with a portion of the savings. However, this system is entirely internal and the corporation is free to use such a system. The example we have used is funded publicly, so no such freedom exists. City governments are not (nor should they be) free to reward whistle blowers with a portion of this savings. This makes since since it would potentially encourage false expositions of wrong. For that matter even the reported story could be false, since it doesn't have the same due process of a trial or even a peer review.

Presumably, the populace each becomes one dollar richer because of this. If they had the option, would they reward the paper for this important work with a portion of their new found wealth. The answer is likely a resounding no. Simply put, they have no incentive to do so. Furthermore, the benefit is uncertain and difficult to prove. Waste is far more theoretical than cash in a person's hand. If asked, they would guess the benefit to be far less than the actual savings.

In some ways this is one of the reasons that people refuse to pay for news. Their perception is that any value created is difficult to measure, and thus worth less than it really is. This example is for a quantifiable benefit, so reporting on a car accident or sports team is that much more difficult to measure. Consumers are free to take the benefit and don't feel they need to pay it back.

They would also feel that the face value of the paper paid for a portion of the their benefit, and recognize the advertising component as part of their payment as well, even if they know they didn't pay for it directly.

True investigatory journalism is very expensive. Facts need to be checked very well to avoid lawsuits. The company exposed in our example is likely to lose far more than the excess price in its contract, they may be barred entirely from doing business with the city. Any holes in the story will be an excuse to sue the newspaper for its perceived losses.

So if consumers don't value it enough, and its expensive to do; why do it at all? Certain companies look at this as part of their civic duty, but it's not hard to reduce it to deminimus nonetheless. Its far cheaper to republish wire stores that are interesting and edit slightly for local content than spend weeks or months working on a story that could get your paper sued. It's cheap to follow police reports and press clippings.

As revenues decline, the most expensive items will get cut first. Unfortunately for society, that is often the stories that deliver the most value. When journalists complain about the cuts - they often miss out on this part. I don't need to read yet another review of the latest movie from the "local" perspective, I need to make sure that my political system is responsible. These exposes are often very compelling pieces and examples of bold and brave storytelling. What's left as the investigations are limited is bland and generic. This is true commodity news and exactly the type of stuff that can be found EVERYWHERE on the internet.

The places that seem to be picking up on this lack of ... um... gravitas are places like the alternative press. They often produce one or two stories a week, and don't have to appeal to the same broad demographic as the main paper. The limited deadlines make the pressure to produce a daily update much lower, and instead they can focus on longer and bigger. Blogs have also been active in this area, but with a few exceptions, are rarely taken as seriously as mainstream press.

Newspapers need to get back to telling the stories that matter with bravery. It is the unique and valuable story that get people to pick the thing up in the first place. Even if consumers don't think they want to pay for it, this value creation is one of the key drivers of consumption.