NEW NEWSPAPERS FLOURISH DESPITE GOVERNMENT-SPONSORED MONOPOLY
May 20, 2005
The Newspaper Preservation Act of 1970, signed by Richard Nixon, allowed ?joint operation agreements? (JOAs), in which a single entity could handle the business operations for two or more newspapers, such as the San Francisco Chronicle and the San Francisco Examiner, for example.
The law, which was designed to support struggling newspapers and provide multiple editorial voices to cities, has done little to prevent newspaper closures, says Reason.
- Out of the original 28 JOAs, 15 have ended with just one newspaper left standing.
- Since JOAs are permitted to fix prices, thereby bypassing anti-trust laws, smaller newspapers have been reluctant to enter the market.
However, the market is changing, explains Reason. In one case, the founder of Qwest Communications bought the failing San Francisco Examiner and converted it into a free tabloid. Cities such as Chicago, Dallas, New York and Washington, D.C., are gaining daily newspapers after decades of losses.
- Free tabloids, or broadsheets, typically have 40 employees or less and run on budgets of less than $10 million a year.
- Most come in English and Spanish, run about 40 pages, and are distributed along public transportation lines.
- While the average readers are white, middle-aged men, two-thirds are under the age of 45 and half of readers are female.
Critics are leery of entering a market with a dominant newspaper, but the Tribune Company has started tabloids in Chicago and New York, and Knight-Ridder is expanding into the market as well. In fact, after New York Times publisher Arthur Sulzberger referred to free papers as "degrading" a year ago, the Times recently launched a bid to purchase 49 percent of the Boston Metro for $16.5 million.
Source: Matt Welch, "Free at Last," Reason, May 2005.
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