online. and it really basically calls the question for the first time in perhaps 100 years of what are you willing to pay for news. and the answer may be, not much. and then you have some interesting dilemmas of what happened in the world where there is, you know, people willing to pay for something we nonetheless think is important social value. the other thing that has been kind of coming back, coming out is over and over again is a confusion and that's developed between, you might called abundance of media outlets, and an abundance of journalism. i've often hear people say how can you say that there's a crisis or shortage? there's news, tons of news outlets, tons of new websites. you can get information more ways than ever before. you can get on your phone, you can get it traditional ways.

and so it has the feeling that we are in an age of abundance, and in many ways we are. and yet if you trace back information that you get in all these different, many different outlets, you find it is actually a small and shrinking number of journalists that are providing the information that go out to an ever larger number of outlets. so you have both this era of abundance on one part of the media, and and and a shortage, scarcity on another part. and it's very important to kind of disentangled these two forces if you want to think wisely i think about public policy. >> thank you. that was a great start. barber, i'm going to turn to you next as someone who represents a very important media company. how do you see the situation

described by the two previous speakers? and how did we get there? >> well, i have to say, susan really hit the nail on the head. and i think the workshops that you've been conducting have been quite informative. and the points that you made, steve, as well are very profound. but in terms of the economic, those of you who don't know, gannett is a company that publishes 82 daily newspapers, including u.s.a. today. and we have 26 television stations around the country as well. and in terms of how we got here, it's hard to know where to begin. but if you are just, you do, top three. what susan pointed out is exactly correct. decline in classified advertising has had a huge impact. because as you said, 80% of newspapers traditionally have

been supported by advertising. of that 80%, 40 to 60% has come from classified advertising. and so the decline in classified advertising has had a profound impact on the dollars available for news gathering. and secondly the news streams of revenue online simply don't pay as well. as the old streams did. and there have been a lot of formulations of this, but i think probably the most precise is the one that mark mentioned that one of the workshops, which is that in print a pair of eyeballs is worth about $500. but online those eyeballs are only worth about $75. so it's hard to see the lines causing with the emergence of the online products emerging and growing. and we are growing audiences

online. at a very good clip, but the dollars that we derive from those audiences are smaller than those that we derive from the traditional print product. and also the fixed cost nature of the business can't be discounted. you know, print is capital intensive, distribution is very expensive. and we have to maintain that cost structure, whereas a new entrance government and they don't have any of those expenses. so i think it's a confluence of really those three major developments that has found us where we are today. >> okay. andy, you have some thoughts about whether in all of this there is an appropriate role the government can play. sure. first of all, i find myself in the odd situation of green with everybody here in what's been

said so far. so let me hypothesize somebody who is not here, someone like clay art arianna huffington, people who talk about citizen journalism and people in their proverbial pajamas blogging away and somehow provided a function that replaces traditional journalism. and i would disagree with that person, because there is this the reducible role for these people, quote journalists. and these people quote editors who create these products that tell us things we didn't know we wanted to know until we saw the headline are a we saw the story there, and found it. it's very important and produce with professionalism. i think this is a public good. i think there's a very serious of market failure. and there is a tradition which

susan alluded to, going back to the very start of the country it is inherent in the goals of the framers of the constitution and the first amendment to create a well-informed electorate to making sure that voters are informed about issues of the day and able to make wise decisions in the democratic process. i'm going to actually lead a couple of sentences from professor michael john talking about the affirmative role of government in this context. congress he said is not be barred from all action of freedom of speech and the legislation which bridges that freedom is forbidden, but not legislation to enlarge and enrich it. the freedom of mind which the members of a self-governing society is not a given fixed fact of human nature, it can be

increased and established by learning by teaching by the unhindered flow of accurate information by giving men, i will add, and women, help security by bringing together communication and me to understanding, although the federal legislature is not forbidden to engage in that positive enterprise cultivate the general intelligence upon which the successes of self-government. so obviously depends on the contrary in a positive field, the congress of the diocese has a heavy and basic responsibility to promote the freedom of speech. now i do subscribe to this very robust view of government's role in using the first amendment as a tool to promote civic discourse. we have done it since the beginning. people like paul starr and robert have written wonderfully about postal subsidies, incredibly important role that they played in creating a robust

and effective journalism. and how really for the last 100 years there's been an accident of technology that we have a profitable cross subsidized journalism created by large advertising revenues in the newspaper and broadcasting industry, and how we are now facing a real dilemma. and i think it is entirely appropriate for government in the tradition of these neutral subsidies, advertisements for public notices, postal subsidies, in a noncommercial space public radio which barbara can speak to, there are ways to do this and that do not impede and go to promote first amendment values. i will do to barber, but i don't think in her years at npr the fact that some of in the arts funding came from the government

impeded the figure or the effectiveness of npr's of there are some terrific models. we can talk about them. people have proposed. we certainly want to incubate. i'd like of something like a national endowment for journalism like the nea in any age to take new models and try them out to assist people trying to develop new and different ways to do it. it may well be that we will not come of in this new environment for a journalism that is truly self-sustaining without some governmental role. i think this need to be a very important part of this discussion, singtel government can do this in a proactive way. >> thank you. in the next part of our discussion will get to some of the specific proposals. i won't pressure on that now. i want to give gene a chance to get in. gene has first amendment in the

title of his job. >> i'm going to run with that idea and try to take the sort of longer view, larger perspective which is fairly easy when you work with a paragraph that was ratified in 1791. you are sort of drawn to that aspect. so let him back a little bit to what's been said here. i think, steve, you answered no. i might begin to do at on bailout no and never. but with some i will admit, some questions. the concept of public funding for laboratories and experiments. for new development to assist in industry and frankly has never been all that good innovation, quite honestly. you know, we change the width of the columns. we congratulate ourselves when it adopted color 50 years after technology made it possible. there's never been an innovative industry. i think and we talk in this context there are a few things to think about. we in some ways we're talking about a crisis of mechanics, of

the corporate suite, that is in terms of acquisitions and expansions versus the core product of news. we are not talking necessarily about a crisis of -- was interested to me in terms of the market model is that we have this incredible, i think for me force excess in terms of a free press. and that is that we have a tremendous and maybe even growing need for information to do with an incredibly complex world. we have new mechanisms which to deliver it, and we have an incredible thirst by all accounts because of the explosion of users and websites and all the rest, for that information on the consumer and. so from that sort of basic model if you're setting up a mom-and-pop store somewhere and picking a product, you couldn't pick a better product than journalism. and an environment in which a free press can function. i think again in the longer view if you think about free speech, freedom of press, we have gone to what -- evolution. maybe a circle.

i got from the village green to the village of screen. wimberley circumvented it in some ways, these entities that grow up starting about the late 1800s and robustly into the 21st 21st century. that will we are in position between the consumer, the news gatherer or the news itself and then a consumer. so we have this marvelous innovative period. having said that, too many of my colleagues are out of work, former colleagues are out of work. to me industries are doing things like a week furlough without pay. to me local stations have been redirected to other careers for me not to say in fact there is a crisis. but again i think when we talk about this subject, and i'm struck because we have done other panels on this subject as well. we are in a transition if we are in from a model that worked for 100 years, 80 years, six years, to something new. and i, with all respect to the

studies going on, we are getting cuts into the waterfall right now. we are trying to find industry minutes long environment that and i were if we come up with a solution today that won't be an appropriate solution for tomorrow in terms of what happens with, forgive me, and and treatment of government. however, we believe protection, entailment of government with a free press. and i think we need to be very cautious about this. not try to ignore the fact that everyday fewer journalists may be employed and we're also losing a high-end spectrum of journalism. senior people with the most experience are leaving in numbers that we wouldn't have anticipated ever. and certainly would never have occurred in a natural cycle. we are losing that talent pool at the top that has that 30 years, and not just at a national level. i grew up really start in a smaller newspapers before went to the world largest neighborhood. and what i learned there was

often from somebody with that 20 years of experience who knew more about the county budget, municipal working's, and anybody holding office because they had been there through all of those administration and all those transitions. i think we talk about the grand solutions, we look at these mega- solutions, but we need to think about preserving somehow that kind of thing as a viable industry. most newspapers and standalone operations, i think television station still our bible entities. community newspapers were they don't face the craigslist deprivation of classified, and parcel also seen as important news conduit because you can't punch in your zip code and get the weather forecast for all of tennessee. you get for national. those are the places where there's robust journalism going on. when we look at these i hope we will consider that and, and what do we need to enlarge their role to assist the role, community newspaper at that level is still i think very robust. and i think we need to worry

again through all this. and i understand and i read the report and i read our friends who published who published a report. but the founders were very specific that the 45 words are out there and it does say well, there is no barrier. congress shall make no law. and i think the implicit there was to keep government out of not only restricting, but directing. and with all due respect i never thought i would be quoting jerry falwell this often, but from the shackles to the shackles are connecting to my how one structures internet or direct subsidies i know we don't with, the first aggregators with the colonial newspapers who mailed each other for free. they were aggregators in 1791. but we need to be very cautious about stepping forward on this, because we also do with the big unknown, the skeptical public.

who will see any assist as they have with other industries as a hand of government somehow tilting the objectivity or pushing the objectivity, or lack thereof that already exists. so i tnk we need to be very, very cautious. i really don't have one foot in the tarpaper don't like is the innovation. i think subsidizing universities and other places is a good idea what i worry about that intrusion of the news product. >> barber, did you want to add something? >> yes, and i really does want to interject very briefly that we have been burying the newspaper industry. this quarter i think around the country you see the numbers improving. we still think we have a very viable and vital business. it was exciting last fall, gannett invited most of its editors to our headquarters and the first time we've been able to do that financially and a

while. and there were three days of meetings. and the message was relief watchdog journalism is our future. local watchdog journalism is our future. and we think we have the future. you know, we recognized i think that bailout notion is a little far-fetched. but even government subsidies of journalism, i think, are pretty radical when there are much smaller steps that could be taken to improve the financial health of newspaper by the government. i'll just mention a couple. one is, you know, the growing wisdom seems to be the postal subsidy has benefited newspape newspapers. but, in fact, something of the reverse is true, because the periodical rate a place to weeklies, primarily, the

beneficiaries our magazines and the weekly newspapers. but for the daily newspapers its academic postal trend that has hurt us quite significantly. and that is that the postal rate commission has given much, much lower rates to saturation mayors. now why does that matter? saturation mayors are like the advertisements out to an entire community. like we do at the newspaper is we take the same ads, we call him answers and put them in the newspaper and for those people in it and who don't subscribe, we mail. so that's called high density mailing. and huygens link mailing which is selected by address, is much, much more expensive than saturation mailing. and when the increases come through, we see very low increases for saturation and much higher for high density. so that's a very small thing

that but it could benefit newspapers i'm and particularly the advertising revenues streams that is essential to the survival. quite significantly. so there are a lot of, you know, i won't, with cameron on the panel i'm not going to talk about crossownership right now, but let's face it. we are treated like the dominant voice and the d.o.j. applies a market definition that basically considers us monopolist. so again if we're looking at ways to maybe have and sorcerers or joint ventures, et cetera, and be able to have them approved through the department of justice, there are very small steps which involve looking slightly differently and looking more realistically at the market that could help us again along the way so that there wouldn't be a need for a handout from the government. >> i saw susan making a note when you are talking about the postal rates. and i want to return to you and ask, what kinds of policies,

policy changes and policy adoptions are you thinking that the ftc might be considering? >> well, it's not necessarily what the commission will end up considering, but we did have actually the chairman of the postal rate commission come and speak at our workshop in march. and unfortunately the postal rate commission and the postal service, as you may have noticed, is not doing well financially. so they are really not that enthused about any ideas that would include lowering rates for anybody actually. >> making them even might be a starter. >> yes, yes. and, you know, more power to you. >> just a thought expect it is a valid thought that it is a valid thought. i think the general notion is postal rate subsidies get a lot

more for newspapers at the beginning of the country when the founding fathers really had a notion that they needed to subsidized newspaper delivery to help bring the country together, and to also inform citizens and help get democracy functioning. they are not helping newspapers or news organizations in particular these days. another idea that has probably the idea that has most readily at interest is the full notion, not just how do you increase revenues to news organizations, but how do you reduce the cost of newsgathering. and so we had presentations on some of the works that is being done to make government data more readily available and more easily manipulable. and that is a trend that is

going on in a lot of areas, including at the securities and exchange commission. we had somebody come in and explain to us how they have developed new types of financial reports that companies are now required to submit that allow you much more easily to compare across companies what the various, you know, factors, or whatever those financial terms are. and as more and more that can be done that certainly facilitate some of the watchdog reporting that you were talking about as the future. of news. we did also discuss there have been discussions about new types of organizations that would be either a hybrid of nonprofit and for-profit, or for-profit but

with a social purpose. and the thought is that news organizations might fit in to that kind of an organization, which would allow newspapers to thrive, maybe a five of 6% return on investment, but would allow -- >> a lot of executives clutching their chests. >> but that's not the kind of person who would be running this organization. these are organizations that would be run for the purpose of getting some return on investment, but also for having a social purpose. and there would be specific bylaws that would allow members of the board of directors to take into account social purpose in making decisions. >> this is the llc structure? >> the llc has got a lot of press but it is by no means the only organization that is out there. this is part of a big movement

that has -- just a minute. >> i'm just going to be quiet in the corporate. >> i can figure kind of chomping at the bit. but there's a much broader, there's a much broader movement for these, what are sometimes called for benefit corporation, to help out and economic development zones. and newspapers might be a beneficiary of that. now, the problem is the irs is -- has not been brought along, shall we say, on some of these issues. and they are significant that there are significant tax implications that need to be worked out there. the corporate side of the law is being worked on and developed. the tax side of the law not so - i let other people talk of a. >> jeanne, give you a little? >> again, i think the concept of

you've outlined, public focus energy reporting this information on the surface sounds really wonderful. i worry that again, going back to 1791 or earlier, that we had a system of government determination of social purpose. and we see that replicated in today's society holds licensing. you know, printers were licensed. and again, i don't want us to engage in hyperbole just for the sake of recounting history, but when i hear it an entity defined by social purpose, as a news organization, as a newspaper or television, radio, whatever, i think we open that door for what pushes the limit. if it's watchdog journalism to take a look at how well congress

is doing, that's fine. but where in something approach is that line, right now they set up the free market, they set up a stall in the market place ideas, they succeed or fail by their marriage. i do business. and i'm worried about the zone in the middle, the little tiny zone or that large zones were suddenly they approach the things that there's great debate of whether it is a proper orbit official, social purpose. and where again in terms of a free press are we going to draw that line? >> i just want to be clear that these organizations nobody is talking about licensing them. >> i was going to say, they are licensed. >> the fcc is a different issue. >> the want to talk about some of that? >> first, a broader point. we're talking as if the debate is whether or not the government should for the first time get involved in regulating medium that right now all the tv stations in american and all of

the rate of stations in america got their licenses from the public through the ages of the federal government. the government decides what kind of wireless spectrum is auctioned off. the government decides how much of the satellite spectrum should be set aside for educational program. the government decides how much of cable should be set aside for public access. the government decides how many radio stations, single company can own. how many towns can have crossownership between newspapers and radio stations, and on and on and on. and i'm not defending any of these policies in particular. i'm just saying the current reality is that government is involved in the media world in all sorts of ways. so the goal should be to make sure that this is done in a wise way or. there tends to be a bit of a newspaper centrism to some of these conversations. and it gives a little bit of misleading press because

newspapers are the least regulated part of the media ecosystem. broadcast what is a different thing. and so one of the things that we are looking at with the fcc as there has historically been what's referred to as the public interest obligation for broadcasters. and that's been a subject of argument, a debate back and forth for decades about what that means, what the governmengovernments role is in and forcing something like that. it is tricky. but it is very tricky. the theory is sensible that unlike someone who sets up shop with a printing press and there's an unlimited number of printing presses back inhabit that there is not an unlimited amount of spectrum. the spectrum belongs to the public. the government is the one that is charged with the task of deciding who gets some of this spectrum. and for a long time the government said okay, because you're going to get this scarce public resource, you have to serve the public interest in some way.

and that is traditionally had, you know, an education in terms of news public affairs programming. but one of the things were looking at, what does that mean now, what does it make of a public interest obligation now? is that there's a public interest obligation to fight against broadcasters when their competitors don't necessarily have it? is a public interest obligation for wireless is and most importantly, is there a way of we conceding our notion of a public interest, public interest obligations for the 21st century in a way that would help this problem next. >> and everyone will want to know how does the current discussion of broadband and reallocating spectrum, and having broadcasters even feel back some of the spectrum, how does that fit together with an inquiry