Tuesday 9 October 2012

Would You Like A Free Daily Newspaper With Your Free Lunch?

The Power Of One: Sheldon Adelson's personal fortune of $US20 billion allows him to subsidise the distribution of a free daily newspaper throughout Israel. Unable to compete with their far-right rival, Israel's left-wing newspapers face ruin. What would happen to New Zealand's mostly Australian-owned print media if the world's richest woman, Gina Rinehart, attempted to do something similar across the Tasman?
A FREE DAILY NEWSPAPER. Just imagine being able to walk into your local dairy and pick up a big, fat, all-sections, all-subjects daily newspaper without paying a cent. Imagine that newspaper being delivered free-of-charge to your front door. Imagine its impact on newspaper publishers who still expected you to pay for their product.
Impossible, you say. Sure, we have give-away newspapers now, but they only arrive in our letter-box once or twice a week, and because they’re paid for by advertising sales the editorial content is pretty thin. A genuine daily newspaper, with all the editorial content that term implies, simply couldn’t be financed from advertising alone. The revenue from advertising would have to be augmented by over-the-counter-sales and subscriptions. So, a “free” daily newspaper must remain a pipe dream.
Not necessarily. If you were on the streets of Tel Aviv today you could pick up a copy of Israel Hayom for free. The paper was launched five years ago as a five-days-a-week publication, and in November 2009 added what it describes as “an expansive weekend edition”. A free daily newspaper already exists.
But how? What’s the Israelis’ secret? How can such a publication possibly break even? Is Israel’s economy really so buoyant that it can sustain a daily newspaper funded exclusively from advertising sales?
Well, no, it isn’t. Israel’s economy, like every other country’s, is feeling the squeeze of the global financial crisis. Not surprisingly, Israel Hayom runs at a substantial loss.
But who on earth has so much money that he can afford to run a large daily newspaper at a loss? He’d have to be a billionaire.
Indeed he would, and that’s exactly what Sheldon Adelson, the man behind Israel Hayom, is – twenty times over. Mr Adelson made his fortune in the casino business and now he’s using it to support his favourite right-wing politicians. Over the past three or four months he has donated $US10 million to “Restore Our Future” – a political action committee backing the Republican Party’s presidential candidate, Mitt Romney. At home, through Israel Hayom, his money is being used to promote the policies of Prime Minister Benjamin Netanyahu and his right-wing Likud Party.
All a little unsettling. But, in a free country, doesn’t Mr Adelson have every right to set up and run his own newspaper – even at a loss? Well, possibly. Perhaps a more pertinent question might be: Does Mr Adelson, by so ruthlessly under-cutting his competitors, have the right to drive them out of business?
Israel, like the United Kingdom, is a country where most of the daily newspapers take an openly partisan position. Mr Adelson, by under-writing Israel Hayom’s losses is putting this politically diverse media environment at risk. Slowly but surely, the daily newspapers representing the Left of Israeli politics are being driven towards insolvency.
According to McClatchy Newspapers’ Sheera Frenkel:
Haaretz, Israel’s most prominent left-wing daily, didn’t publish a print edition [last] Thursday for the first time in three decades as layoffs threatened much of the staff. Maariv, one of the country’s largest newspapers, has announced that it might switch soon to Web-only distribution with a weekend print version; the alternative, the paper has said, is closing.”
All very sad. But Israel and its newspapers are a long way from New Zealand. Our media environment is quite different. Surely, nothing like Israel Hayom could happen here?
Not here – not yet. But what about across the Tasman? In Australia (where most of New Zealand’s daily newspaper publishers are based) another billionaire, the mining magnate Gina Rinehart, is locked in a very public dispute with one of her country’s largest media corporations, Fairfax Media. Ms Rinehart, currently a major Fairfax shareholder, is unhappy with the corporation’s political and business coverage and is accused by her critics of seeking to influence its newspapers’ editorial direction.
What would happen to Australia’s print media environment if Ms Rinehart decided to adopt Mr Adelson’s strategy? How long could the already financially fragile Aussie media survive the competition of a free daily newspaper, subsidised out of the extremely deep pockets of the world’s richest woman?
And if the Sydney Morning Herald, Daily Mercury and Rupert Murdoch’s Australian were to suffer the same fate that appears to be awaiting Haaretz and Maariv, how would that impact the future of the Australian-owned mastheads dominating New Zealand’s print media?
If the future of the print media belongs to those with the deepest pockets, then perhaps it is time to start thinking about the creation of a publicly-funded, editorially neutral (and that neutrality would need to be guaranteed by statute) national (with a small “n”!) newspaper? Democracy requires a well-informed electorate, which, in turn, requires a truly independent news media.
New Zealand democracy is far too important to be entrusted to newspapers wholly owned and influenced by right-wing billionaires.
This essay was originally published in The Press of Tuesday, 9 October 2012.


KN said...

"perhaps it is time to start thinking about the creation of a publicly-funded, editorially neutral (and that neutrality would need to be guaranteed by statute) national (with a small “n”!) newspaper?"


alwyn said...

If you want a free daily paper I suggest that you move to Wellington. Anyone can get a free copy of the Dom/Post simply by going into Te Papa and picking one up.
To be fair the Dom/Post being free probably reflects fair pricing.

Chris Trotter said...

No, KN, NOT like TVNZ.

To an extraordinary degree by international standards, the publicly-owned TVNZ operates as a purely commercial broadcaster. It has no charter to direct it towards the kind of neutral - but critical - news coverage New Zealand so desperately needs.

I would say: "Like Radio New Zealand".

Adolf Fiinkensein said...

Good grief! like Radio NZ? You mean Radio Pravda, surely!

Michael Wynd said...

Chris, have you looked at the share price for Fairfax, they're doing a great job of running the company into the ground before Gina took a stake in the company. IF anything, she is trying to get them to be less partisan and not a left-wing rag so totally out of touch with its readers. Publishing papers that appeal only to the urbaninstas of inner city Melboure and Sydney doesn't seem to be a sound buisness model. I don't think you need to worry about The Australian fort the moment as Rupert Murdoch will happily support it using the profits from the other sections of the Fox Empire.
As to a publicly-funded newspaper, didn't the USSR try this with Pravda? You know very well that no legal statue would enure neurality as it is a very subjective concept. And why should the taxpayer subsidise a paper that they are not likely to read. Isn't it bad enough that we fund Radio Left Wing presently? No government paper, no government in the media. Chris this is a bad idea. Let the gentleman run his paper at a loss. It's his money he's spending and not the taxpayers as your idea would.

Dion said...

> (and that neutrality would need to be guaranteed by statute)

Problem is everyone's biased to some degree - and both sides of the political spectrum seem to perceive a media bias against themselves. As a right-winger I know I certainly do - and I've heard similar things from the left as well.

So how would you go about legislating for neutrality - to avoid us creating a state funded media outlet with its own partisan editorial direction?

Brendan McNeill said...


Can I suggest that there is no such thing as political neutrality when it comes to the media, and RNZ is a classic example of this, with the possible exception of Jim Moyer's afternoons show. Jim to his credit manages to maintain a neutral position, although some of his guests are highly suspect. :-)

News papers the world over are in a financial death spiral instigated by the Internet.

In NZ the newspapers have long ceased reporting facts and events, and are now simply journalistic opinion pieces. If I want opinion I can find it for free on the Internet. Your blog for example.

If I want to advertise there is trademe, seek or ebay.

If someone wants to invest in a politically biased newspaper and give it away, then good on them. They compete in the world of ideas just like everyone else.

The newspaper is now just one of many sources of information, and I suspect one of the least trusted, just behind CNN or FOX news.

Get a Grip said...

You jest? Radio New Zealand neutral!!! I listen to it from time to time when I want to get a socialist spin on happenings and opinions.
However the interviews with interesting people are interesting.
AND it doesnt have inane advertisements.

Anonymous said...

Printed newspapers have lost their importance. Their primary audience is the over 60's, crossword puzzlers, sports enthusiasts and gossip followers. We will mourn the passing of newspapers as one of life's essentials only as we mourned the passing of horse-drawn transport and pre-decimal currency.

guerilla surgeon said...

Jim Mora neutral?? He's so middle class he might as well live in Key land. Hahahahahaha. Actually I think apart from him and Ryan it's pretty neutral. For about 3 hours a day then.

KN said...

Actually, I was being a bit facetious.

Brendan wrote: "If someone wants to invest in a politically biased newspaper and give it away, then good on them. They compete in the world of ideas just like everyone else."

Substitute 'blog' for 'newspaper' and you have the main source of news analysis for my generation - free and reader-beware.

Jigsaw said...

A newspaper with a right wing point of view-now tht would be a different thing and would help to balance the huge left wing bias we get in the news at the moment. Did someone joke about RNZ being impartial? Presenters like Kym Hill and Chris Laidlaw make no attempt whatever to be anything but left wing and the idea of some differing opinions never seem to even occur to them.

Kat said...

Jigsaw, are you kidding?
If Granny Herald with its majority of editorials, John Armstrong, John Roughan, Fran O'Sullivan, Paul Holmes, Kerre Woodham, is 'not' right leaning then you truly have a revelation for us all. RNZ also has the Morning Retort team with Simon Mercep, Nine to Noon with Kathryn Ryan,all right leaning presenters.

Victor said...

The notion that RNZ is in any sense left-wing defies any conceivable reality check.

The station's choice of allegedly left wing commentators consists of Mike Williams or Josie Pagani. I rest my case!

Anonymous said...

The problem with traditional public broadcasting is that hardly anyone listens to it. If a state broadcaster started doing proper news, viewers would jump ship to TV3 to get their fill of infotainment.

When sufficient media choice exists, you can't make people watch something they don't want to. Real news involves telling people things they would often rather not hear. Infotainment does not. Infotainment wins.

We live in a world of derp, Chris.

Anonymous said...

But if the left wing readers in Israel don't want to see the demise of their favourite left wing newspapers, they should simply continue to buy them as they did before.

Victor said...


Israel is a very high tech orientated country, and I suspect this is truer of its cerebral left-wingers than of much of the rest of the population.

Would it matter if Ha'aretz disappeared as a hard copy publication? Most certainly. But not, I suspect, to a catastrophic extent.

What's important to anyone who values peace, sanity and democracy in the Middle East is that columnists of the likes of Uri Avnery, Amira Hass and Gideon Levy don't get silenced.

And, whatever the technology available, they will use it and won't be silenced! That you can rely on.

Meanwhile, I ponder how effective a nationwide free newspaper is likely to be in influencing opinion.

If you don't pay for it, you may not read it with any intensity or commitment.

Moreover, the closed minds of the Israeli Right are already set in concrete. Would another organ of right wing opinion make all that much difference?

Perhaps it's a pity that Israelis don't share the Anglo-Celtic taste for eating Fish and Chips out of newsprint, as there will be so much more of it available.

So, yes, this is a doleful development. But there are far worse threats to Israeli democracy and to the peace of this pivotal region. And these threats loom much larger with the increasing likelyhood of a Romney presidency.

mugly said...

A great blog that highlights two issues. Firstly, the Ha'aretz situation highlights the power of wealth to influence in a capitalist society. I mean I could go on about the flaw of the supply/demand curve, the invisible hand limitations, the convenient exclusion of the unequal bargaining effect, the monopolistic influence of oligopolies, the psycho/social principles of authority and social conditioning, misuse of the agency agency principle by boards and CEOs etc; things that converge to create problems for Ha'aretz. But is the lack of finances really an obstacle? I'm a believer in that ignorance, lack of self awareness and creativity are the only true obstacles. The power of technology, the Internet has given the masses the power of media, a power previously the exclusive domain of the rich and privileged. That's why after reading the Herald and CNN version, I'd check out Aljazeera's version as well as quality blogs like yours Chris. It isn't money that determines quality, it's the integrity of the medium that does. Let passion do the rest.