it's working we're on the committee will come to order mr brady will be with us in a moment and i want to first of all thank our witnesses for joining us today to discuss the future of newspapers and their impact on the economy and our democracy the newspaper industry has experienced serious financial problems resulting from dwindling advertising revenues falling print  subscriptions and a fundamental change in the way people get their news recently the plight of the newspaper industry has been punctuated by substantial job losses downsizing at various bureaus and the halt halting of either printed additions or business wide operations according to the bureau of labor statistics newspaper publishers cut nearly fifty thousand jobs between june of two thousand and eight and june of two thousand  a record rate of job cuts representing fifteen percent of its workforce regional outlets like the seattle post intelligencer year and the detroit free press have either scaled back or halted printed edition while others like the rocky mountain news and the cincinnati post were closed entirely though a dead though a decline in printed newspaper readership is partly to blame for recent developments there are multiple factors contributing to newspapers declining quality and profitability scuse me technological change has created structural challenges for newspapers which were reliant on subscription and class classified ad revenues to cover operating costs on top of that the current recession as a road advertising revenue substantially between two thousand and six and two thousand and eight ad revenues declined twenty three percent from forty nine point five billion to thirty eight and are expected to fall further during two thousand and nine the way information moves today can make even the tech savvy of new yorkers headspin today kindle pledging i phone toting subway rider who braved the rush hour commute spins every waking hour in a world of nonstop news and information which none of us could have imagined just a few years ago digital media bloggers news aggregators and citizen journalists all on the internet forever altered the speed at which news and ideas are disseminated and while there are many out there chronicling what ails our country's newspapers community dailies and week continue to shut down their presses and not nearly enough is being done find ways to preserve these institutions that are so absolutely critical to our democracy last week i introduced h r three six  two which is carried in the senate by senator cardin a bill which will enable local newspapers to take advantage of nonprofit status as a way to preserve their place in the communities nationwide since the ratification of the bill of rights the federal government has acknowledged that the press is an institution which is afforded special protections by name in this spirit i think that the government can help foster solutions for this industry in ways which protect the independence of newspapers and enables their objective reporting to thrive in a new economic and media climate in so many ways the change brought about by the digital media amplifies what is written in newspapers the internet and mobile devices expand news and information in a way that opens dialogue to more and more aspects of our lives the internet the internet has allowed anyone regardless of background or worldview to express themselves connect with others and that access an entire world of electronic information journalists play a critical role in monitoring the activities of individuals and institutions that are supposed to be working in the public interest as our witness dr star put it they provide a civic alarm system in the absence of a strong media may even allow corruption to flourish unchecked in addition studies show that journalism fosters civic engagement by the poppy population at large a recent study showed that when the cincinnati post shut its doors voter turnout and local elections dropped without our newspapers we lack a critical uniting feature which fosters broad participation in our democracy and community minority owned publications are among the hardest hit by recent trends and more must be done in order to ensure that these institutions continue their important public service the reporting done by no minority owned newspaper is a critical voice in communities across the nation that must be preserved it's clear that we need to explore alternative business models to ensure an independent and vibrant press in the twenty first century i look forward to the testimony of our witnesses and i thank thank you so much for being here today before the committee and i recognize mr brady for five minutes well first thank you madam chairman for calling this hearing and thank you to witnesses for coming today to talk about what is clearly a critical issue in the country i have i will submit my notes for the record but just some thoughts think it's been widely known that the trip to transfer mation in the news business was coming but i for one of been surprised at the speed of it in recent years everyone's been impacted in some way by the mergers and closings and layoffs but i guess i've been troubled most by the loss of so many good knowledgeable highly respected journalists and reporters many of whom have the widest base of institutional knowledge and they are gone and it places even a greater burden on those left behind to cover ever broader and more complex range of issues after state and national and local level there are a lot of ideas floating around about what the next business model is this is saying a bill for the future anxious to hear about those ideas myself today one word of caution i think the freedom of the press is too important to rely upon philanthropy or the government all ideas ought to be explored thank those that touched the government should have the greatest scrutiny and most thoroughly examined for example nonprofit status i serve on the ways and means committee that deals with tax treatments of all types of businesses nonprofit status for news institution raises important policy questions is the political speech from a pulpit including endorsement to be viewed differently than the political speech from a publication in the politicians that bestow nonprofit status also threaten to rescind it if they don't like the opinions or the endorsements or the views in report from those publications a special tax treatments like an exemption from the payroll tax and also raise questions about preferential treatment versus other types of free enterprise as as raising questions about the continued viability of some of our key programs like social security medicare that already face a bankrupt future and as you open that door reason that hasn't been opened for example is is there is no good determination of where to stop when she votes and that door the point is this that congress i think as we sincerely look for ways to help smooth that transformation we just need to tread carefully examine all these issues it is as every bit as complex as the witnesses today will tell us plus more and it deserves i think some real again thoughtful look at in the in the day i'm really hopeful that the next sustainable business model can be sooner rather than later so madam chairman thank you very much this is a great issue for us to be looking thank you so much mr bur i was going to say as usual my microphone is not working probably feeling a little differently than my colleagues appear in the interest of full disclosure my middle child is a journalist she's now retired and teaching school for which i'm grateful but it did give me a little bit of a peek inside the schooling and then the work that carries on it a large daily newspaper dr star i have contributed to your well being in the past by buying your book albeit fifteen years ago but i still have it in my in my office at a certainly a well researched well researched volume and for someone who came from a medical family whose father and grandfather were physicians it was very interesting to read the history even going back now the last two centuries but i gotta tell you it's i used to be a student of medical irony now i'm just a student of irony at large here we are a year after the bush bailout bill for which some of us still bear the scars i voted against it was for the record and we're talking about a newspaper bailout i think that people in the newspaper business would have gotten the word that bailouts are not really a very popular concept in this country right now in fact there is a significant backlash and then not only did we do the bush bailout did in october the september october last year we did a stimulus bill in february and obligated seven hundred eighty seven billion dollars of americans taxpayers money toward economic stimulus now problematic that we have only spent a small portion of that problematic that we have not made investments in in in what i would consider capital expenditures in infrastructure instead of going for operational expenditures but nevertheless there is a significant feeling out there in the country that this congress this year has spent way too much money has spent way too much money on things that are of questionable value and so now the concept of of bailing out the fourth estate is a is one that's met with considerable skepticism there's no question about the contribution of newspapers and journalism over the course of history and certainly even in my brief lifetime things like the like watergate like iran count contra probably would not have come to the surface of the public consciousness had it not been for for dedicated journalists and catered newspapers and editors who were willing to listen to what the the problems were but  that separation the between the world of the journalist and the world of the legislative body that that is something in my mind that really should be inviolate now i recognize that opinions are what right now dr so much of the of the internet on the blogs and the twitters and what have you but for us to interject the legislative body into what you do  almost seems to it almost seems to defy gravity and it's just something that is to me so it's so repugnant that i almost can't allow myself to think about it couple that with the fact that the bailout the whole concept of the bailout right now and again you guys are journalists you report on this stuff you know what the feeling out there is right now you sought during the long hot summer of what the the feeling is of the american people on the their opinion of congress their opinion of the spending that we've done their opinion of how we've handled ourselves during this recession we should be focused like like bill clinton said we should be focused like a laser beam on jobs right now and we're having a hearing on bailing out newspapers you american people are going to look at this and say what in the world are those guys thinking there are things that we could be doing whether it's with in our tax code whether it's within how we structure the spending in the stimulus that would drive job creation right now and not just in the newspaper world but would drive it in a in a way that would be beneficial for all sectors of society and yet congress has chosen to ignore that now i came to congress in two thousand and three there was a recession on going then then president bush received a great deal of criticism because his recovery was a jobless recovery and obviously he was doing something wrong he didn't understand economics or there would be jobs going on coincident with the recovery well here we are again we're in a jobless recovery and congress is doing nothing that would focus on the number one issue that people out there are concerned about we hear about people losing their health care every day they're lose their health care when they cause they lose their job and they can't afford the cobra payments because oh by the way they just lost their job why are we not focusing on that committee this committee should not be partisan but i feel i should respond to the gentleman when president obama came to office he said when you're driving towards a cliff and her bout to fall off you you change course and he came forward with a series of actions that help stabilize our financial services system so that our economy can move forward he put forward a stimulus package that saved jobs and created jobs and he took steps to reform the subprime crisis that caused many many other problems lots of jobs have been lost that's true and there are many jobs that have been lost in the publishing a newspaper industry well over fifty thousand jobs and hopefully now with the economy turning around the economy of the newspaper and media will improve but as all of us agree the independence and contribution  of the independent press which we all support is a fundamental part of our democracy many americans have become concerned that major publications and their independent research which is then a check on government a check on corruption and abuse of power is in is in is facing many troubling challenges that we are concerned about hopefully with the improved economy the economy  of journalism in the media will improve too so maybe we are moving in the right direction but i think it's perfectly legitimate that congress look at what has been a fundamental part of our democracy since the bill of rights a independent strong media and the entire system has changed dramatically in ways that impact on the economy it's appropriate that we look at the economics of the of the print and media industry and what the changing implications are so with that i'd like to introduce our panel tom rosenstiel is the director of the project of excellence in journalism for the pew research center and served as vice chairman of the committee of concerned journalist and initiative engaged in conducting a national conversation among journalists about standards and values a journalist for more than twenty years is a former media critic for the l a times and chief congressional correspondent for newsweek magazine he is the editor and principal author project of excellence in journalism and a report on the state of the news media a comprehensive report on the health of american journalism paul stoddart is the stuart professor of communications and public affairs at princeton universit woodrow wilson school he received in one thousand nine hundred eighty four to look surprised for nonfiction and the bancroft prize in american history for the social transformation of american medicine and the two thousand and five goldsmith book prize for the creation of the media his most recent book is freedom's power the history and promise of liberalism is the co founder and coeditor of the american and his article goodbye to the age of newspapers hello to a new era of corruption published in the new republic last march has received wide attention for its analysis of the implications of the current crisis in the press john durham is the president and c e o of the newspaper association of america the newspaper industry's largest trade organization in a more than two thousand member newspapers in the united states and canada the majority of which are daily newspapers that account for almost ninety percent of u s daily circulation he joined in from c where he was a vice president of government affairs in the c b s washington office prior to his eight years with c b s he was the national broadcasting company he worked with them as senior counsel in n b c s washington office he is a graduate of university of notre dame and holds a law degree from indiana university of law denice role art barnes's a host of reporters roundtable and publisher of the washington former the leading community newspaper serving the african american community in took over as publisher of the washington informer in one nine hundred ninety four and continues his important legacy serving the residents of the district of columbia she is a member of the board of the national newspaper publishers association foundation she received a bachelor of arts degree from howard university and a law degree from howard university school of law thank you both very much and mr risen still you recognized for five minutes to place your entire statement in the record  summarize your remarks thank you madam chairwoman for the opportunity to testify today in the next couple minutes i'd like to offer an overview of what's occurring in the newspaper industry and what it may mean for our civic life there are first a lot of misconceptions about where we get our news only fifty four percent of americans say they regularly read print newspapers but those service surveys don't tell us much about where the news actually comes from far more of what we knew know about our communities today still originates in newspaper newsrooms and a good deal of what is carried on radio television cable wire services begins in newspaper newsrooms these media then disseminate it to a broader audience in every community in america i've studied in twenty six years of being a press critic the newspaper in town has more boots on the ground more reporters and editors than anyone else in the community usually more than all the other media combined when we imagine the news ecosystem in the twenty first century the newspaper with all its problems a still the largest originating gathering source the second misconception about newspapers a is that th r crisis is rooted in a loss of audience it's not so weekday print circulation last year for newspapers fell by four point six percent but the number of unique visitors to newspaper websites grew by sixteen percent to sixty five million when you combine the print and online audiences of newspapers the industry is faring far better than other legacy media and many newspapers are seeing their audiences grow for the first time in decades what's more the internet offers the potential of a more compelling more dynamic more interactive journalism a better journalism then print coming from these same newsrooms the crisis facing newspapers is a revenue crisis advertising the economic foundation of journalism for the last century is literally collapsing particularly classified print newspaper ad revenue fell by twenty five percent in the last two years and in two thousand and nine is certainly worse meanwhile display online display advertising for newspapers is also now declining last year the traffic to the top fifty news websites grew by twenty seven percent but the price of an online ad fell by forty eight percent the consequence is that the amount of our civic life that occurs in the sunlight of observation by journalists is shrinking the number of city councils and zoning commissions utility boards and state houses governors mansions and world capitals being covered by on a regular basis even by a single journalist is diminishing one out of every five people working in newspaper newsrooms in two thousand was gone at the beginning of this year and the number is d much higher now mild newspaper the los angeles times has half the reporters that did five years ago the problem is more acute and bigger papers than at smaller ones but no one is immune and i venture metropolitan suburban areas may be among the most vulnerable alternative news websites such as voice of san diego minn post in minneapolis are exciting innovations and offer options for the future but the number of people working at these places did not yet come close to the loss numbers and none of these sites has so far found a sustaining business model more of american life now occurs in shadow and we cannot know what we do not know newspapers the industry is more than partly to blame like other legacy industries before them newspapers let a generation of opportunities slip through their fingers from e bay to google to realtor dot to monster dot com the industry is running out of options  i believe some remain purely commercial ones these include charging for content getting tough with aggregators creating online retail malls and meche more no one knows which one of these options will prevail i'm an analyst not an advocate the only thing close to a consensus among experts is that no likely no one revenue source will be sufficient so should we care whether newspapers should survive or should we stand by perhaps we shouldn't care typewriters of come and gone we're still here but i believe we do have a stake as citizens in having reporters who are independent who work full time who go out and gather news not just talk about it and  try to get the facts and the context right and it's not just high flying investigative reporters that i have in mind but perhaps even more so the reporters who simply show up week after week who sit in the front row who bear witness and who simply by their presence say to those in power and by the half of the rest of us you are being watched thank you thank you very much dr star ever since the founding of this country newspapers have been americans principal source of news with the coming of the internet and other new media we're now in the midst of a great upheaval that's bringing us many advantages and access to information but chiefly because of its indirect effects on newspaper advertising revenue the news the internet is also undermining the financial basis of the of the press and the question that we now face is whether the nation ought to provide support for journalism not as a special saver to the news media but to advance the general interest in an informed public although some people may consider support for the press to be inconsistent with our national tradition the founding fathers would have disagreed besides guaranteeing freedom of the press in the first amendment they used cheap postal rates to subsidize newspapers and the creation of a national news network the british singled out the press for high taxes united states congress beginning in seventeen ninety two singled out the press for extensive subsidies through the postal system if we had not repudiated and reversed british policies we would not have had the extensive system of free press that developed throughout the country from the earliest days of the republic in the united states the press has not been regarded and it should not be regarded as just another industry government has sought to advance it because a democratic political system just can't function without diverse free and independent sources of news now for a long time we've been able to take newspapers just for granted because they came to occupy a strategic position between advertisers and their customers and out of the profits from that advertising they were able to cross subsidy as the production of news which really could never have been justified on a strictly profitable basis that system for cross subsidising news has collapsed unlike many other countries the united states has historically had a highly decentralized press spread through every state and city as well as a multitude  smaller jurisdictions my concern is not so much that there will be a shortage of national news coverage the national news media i think will be able to aggregate audiences of sufficient size to sustain competition the situation at the state and local level is altogether different according to a recent survey the number of state house reporters has declined by one third in the past five years and shows every sign of declining further some cities are losing their last daily paper and many more are likely to do so resources for traditional journalism at this level are disappearing far more rapidly than they are being created online and those who are most closely involved in online news at the state and local level see no prospect that that is going to become self sustaining so increasingly the production of news will require a subsidy and the question is really despite what we may think right now the question is going to be where and under what condition those subsidies will come but there is a legitimate concern that any subsidy whether from government of private philanthropy will induce subservience and dependency in the press but we should take encourage mint from the facts that early in our history the federal government aided newspapers through postal policy without impinging on their freedom that in recent decades government at both the federal and state level has helped to sustain a system of public broadcasting that's become an important source of news and public affairs discussion and that besides supporting public perseveres broadcasting democratic government government governments elsewhere in the world notably in northern europe have successfully used subsidies to main again competition and diversity in a free press still to avoid compromising press freedom any public support for journalism in the united states must be approached with great caution and it seems to me at least three principles ought to be kept in mind first any subsidies must be viewpoint neutral they cannot favor one viewpoint of or another second they should be platform neutral they should not favor print media over online media for example and third they should be neutral or at least reasonably balanced as organizational form  taken as a whole they should not favor for profit over nonprofit organizations or vice versa to be sure some policies by their nature may benefit one type of organization but the sum total of policy should be indifferent as to whether the news is provided via a for profit or nonprofit enterprise and nonprofit support of journalism is already increasing and many americans would be more comfortable seeing support from journalism come from a great variety of private philanthropies then from government to facilitate that development congress should seek to remove any legal obstacles that may stand in the way of newspapers receiving tax exempt support or becoming nonprofit tax exempt organizations themselves but here we face a new question from the founding of the republic newspapers have played a central role in politics indorsing political candidates for example it would be a real loss to freedom of the press if in becoming nonprofit newspapers had to restrict their political expression i believe therefore congress should consider creating a new category of nonprofit journalistic organizations that are freed from traditional limitations of five hundred one c three organizations when congress originally subsidized newspapers to the postal system it did not require that they be nonpartisan in fact most of those newspapers were partisan neither should we require newspapers to limit their political expression to gain the advantages of that status financial support of journalism could take a number of other forms direct grants however might allow for political manipulation of the flow of funds unless there was some intervening professionally run organization strongly insulated from political control the public broadcasting system offers a model and rather than create an entirely new structure congress might simply broaden the mandate of the one that exists in direct forms of subsidy through the tax system also ought to receive consideration as i mentioned many other countries  provide support they exempt the press from the value added tax the quid in the united states would be an exemption from the payroll tax or at least the employer's share with however the idea of replacing those contributions to the social security trust funds the general re the platform neutral this tax exemption would have to apply not just to newspapers but to journalistic organizations more generally defining eligible organizations and individuals would be difficult but the same problem arises in many other areas such a state shield laws that provide journalists with an exemption from some demands to testify under subpoena the founders were right to see a robust free press as a bulwark of liberty and they were right in their time to provide assistance to ensure the press develop throughout the country we have to figure out how to keep that tradition going in our own time as well thank you very much mister good morning i'm john sturm president c e o of the newspaper association of america as mentioned  trade association representing most of the daily newspapers in the u s i think my colleagues and i agree today on certainly this one point what's really at issue today is the preservation of local journalism and for decades newspapers have been the primary source and financial support system for local news and investigative journalism among all local media newspapers have the greatest commitment to local news and in from a as a result of the longest recession in our nation's history and intense competition for advertising particularly from internet based services newspapers have experienced declines in advertising revenue of actually now nearly forty percent over the past two years including  classified advertising which is had a severe impact on major market newspapers overall the newspaper share of the local advertising market has decreased to less than fifteen percent when it was once thirty percent interesting really as mr rosenstiel mention while revenues have been shrinking newspaper audiences are actually growing print editions combined with successful local websites have a larger audience than ever and their content has never been more popular unfortunately the dramatic decline in advertising revenue has forced publishers in virtually every market large and small to lay off highly valued veteran journalists and other employees and to take other cost saving measures since two thousand and seven thousands of jobs have been lost in the newspaper industry so what can congress do to help newspapers maintain the type of journalism that local communities deserve and expect what can they do now first i want to make clear that the newspaper industry is not seeking a direct financial bailout or any kind of other special subsidy we don't believe that direct government financial assistance to newspapers is appropriate or wise for an industry whose core mission is news gathering analysis and dissemination often involving that very same government second we would suggest that you pass legislation that would allow all businesses to carry back net operating losses for five years instead of the two years under existing law all that the learned chair and the learned ranking member sponsored newspapers need cash now to preserve jobs next year it's really that simple third allow businesses to spread out future contributions to defined benefit plans if not extended businesses will be required to use cash reserves to fund pension plans to meet statutory requirements instead of preserving jobs and generating businesses we suggest congress give the markets more time to recover and businesses wartime to stabilize their finances here maloney we appreciate the bill that you introduce last week the newspaper revitalization act to allow newspapers to organize nonprofit entities while continuing to generate some advertising revenue i think your heart is in the right place and this is a step in the right direction that could help in a few communities but candidly we don't see it as a comprehensive solution to the many problems in the industry at this time in the near term we recognize that newspapers on their own must adjust as you said their business models to find a way to monetize online content in a way that contributes to local journalism and our companies have been exploring new systems that would allow newspapers to drac detect and license online content which is being used by portals and aggregators for their own commercial gain the creators of valuable content cannot survive without compensation from those who currently use and profit from the creative works of others it doesn't work for music books or movies in the long run it will not work for newspaper generated content either the industry is working on a variety of solutions to address these issues solutions that will make it quite convenient for present an authorized users of newspaper generated content to license a reasonable fees for such use in the future i hope today's discussion will lead to practical actions that will help support local public service denialism now and to sustain it in the future thank you for this opportunity to present the industr views i look forward to your questions bit later thank you thank you very much and ms barnes has indicated she has to leave a lot of the clock but we'll answer any questions in writing if we don't have a chance to get all our questions to her thank you so much for being here to recognize for five minutes thank you madam chair members of the joint economic committee for the opportunity to address you on the future of newspapers the impact on the economy and democracy i salute you for your interest and hearing from  diverse group of newspaper publishers regarding our struggles and how this very unique piece of legislation might impact the future of the newspaper industry as you heard in my introduction my name is denise realized barnes and i succeeded my father that the calvin w as publisher of the washington former when he died in one thousand nine hundred four he and his colleagues in the black press impressed upon me the role and responsibility of the black press which was founded by two friedman families cornish and john b rus publishers of the country's first black newspaper established in new york city an eight hundred twenty seven freedom's journal was published nearly one hundred twenty three years after the nation's first continuously published newspaper and nearly forty years before the u s congress abolished slavery in america in eight hundred sixty five the wisconsin historical society describes freedom's journal as a newspaper that provided international national and regional information on current news and contains editorials the claiming slavery lynching and other injustices freedom's journal circulated in eleven states the district of columbia haiti europe and  in their first editorial to their readers quote we wish to plead our own cause to long have others spoken for us the paper published for only two years due to a lack of advertising support but it laid the foundations for thousands of newspapers who shared a mission and purpose that was no different than their white counterparts to provide clear and truthful information about the actions of those who we put in charge and to revive a voice for those who are affected by their decisions ten years ago i could confidently say that the national newspaper publishers association the trade association serving the black press had a membership of more than two hundred newspapers across the country today attendance at conventions indicates a drastic decline in the number of papers that currently exist possibly half the washington former has also joined the ranks with publishers of other community and metropolitan ethnic newspapers that serve a targeted audience who are also exploring ways to keep their papers alive and viable during these difficult economic times the one thing we all share in common is our dependence on advertising a dad used to say advertising is the lifeblood of every newspaper and circulation is a necessary evil minority or ethnic newspapers have always experienced a recession when it comes to advertising we are rarely top of mind when it comes to ad placements made by advertising agencies nor are we treated equitably when it comes to advertisers except i have or ties or is accepting and paying our rate our operations are small our reporters cover a broad range of issues often for little or no pay and the quality of our publications suffers due to our inability to hire editors to fact check and clean up copy before it goes to print yet the demand from our readers is growing they were mind us daily of how much we are needed to address their particular issues and concerns that are often ignored by the mainstream media issues such as health disparities housing employment discrimination racial profiling and immigration issues to name a few while i applaud you congressman maloney and senator cardin the members of this committee's intentions to address the growing crisis that is affecting the entire newspaper industry i view the legislation before us is just one step towards fixing a problem that is steadily growing worse i would suggest however that since there are no daily african american newspapers that you broaden the language in the bill to include weekly publication also the term general circulation which is often used to exclude minority and ethnic newspapers should be broadened to ensure greater opportunities for equal access to advertising revenue under the legislation i appreciate the fact that you are considering a different kind of business model that is reportedly being used by some newspapers that also suggest that you may be open to consider other options that may prove effective as well what papers like ours need is legislation that will indiscrimination on the part of advertising agencies as it relates to ad purchasing and minority owned media and that promotes diversity in advertising agencies hiring and promotion practices we need to run our businesses on a level playing field whether we are for profit or nonprofit entities the decision makers need to be incentivized to do business with minority and ethnic owned media or else for us there will be no end to the recession the country must maintain a free and independent press to service all the people and as you consider the options this must be foremost in your mind i'm open to taking your questions and sharing more of my experiences thoughts and suggestions if needed once again thank you for this opportunity to testify before you today thank you so much and i appreciate all of your of newspapers often the research done by reporters is very valuable and often the paper's not compensated for it and i'd like the palace to talk about a proposal that some of put forward to charge each individual story similar to how i tunes charges for each song now and before the i tunes the music industry was suffering from its file sharing byte by users but the low prices and easy interference and simple payment system seems to have given more strength more economic strength to the music industry and do you believe that a similar system would work for in really supporting the intellectual property of the research and effort and time that went into creating stories that are now just freely given across the country madam chair  then the revenues from those ads do not go to the creator the content ad networks and the web sites that use the content fortunately and presently there are a lot of ideas out there that are that a revenue stand for in point the more potential is with systems that would track as i mentioned my testimony tracked the use of that content to the use by news aggregators and large portals who make millions and millions and millions of dollars off that content if the if there is a and it's being developed now if there is a convenient way to have that that content license so it is used and it's available to the public this way but nonetheless the revenue goes back to the creators that's indeed what what i think would be great of great benefit to the industry and there are a lot of ideas out there and that new sources around the world can use to charge a daily monthly or annual subscription fees similar to charges that cable or satellite t v companies charge and you think that internet users have become so accustomed to reuse or do you believe that users will pay for online news again i ask anyone to comment or everyone i think measures like this can work for the elite press to clear the financial press where the readers but what i think is really crucial to understand is that the people who have been reading newspapers have never really had to pay for the full cost of the content most of that cost isn't paid by the advertisers the readers have paid a very very small a fraction of it now if you shift more of the burden to the readers if in effect you raise the price of them in the price will be raised even more after this period where it's been a zero there is unquestionably i think going to be a significant drop in the consumption of that news and so what may be our look like a solution from the newspapers point of view is really not a solution from the point of view of civic literacy a couple of points first of all to to add to what paul just said newspapers make only twenty percent of their revenue from subscriptions and payments from the consumers the model is very different particularly in europe where as much as seventy percent of the revenue comes from subscriptions we have a model in the united states that depends more heavily on advertising than other countries on the question of micro payments pain per article i think there is a civic problem there which is your discouraging use you're making it more expensive the more knowledgeable more news people consume and i'm not sure from a public policy standpoint or even from  civic standpoint that's really where we want to go the problem that news companies had in charging for content originally was that it was very difficult to charge for one organization to charge for its content if similar content was free from others for this to war i think it's going to have to happen in mass as long as i can get the a p story why would i pay fifteen bucks a month for the new york times story is the marginal difference between the two accounts so much greater what history would suggest consumers said no so it's going to have to be packaged probably to work and that might address paul's concern about what the well might have a high demand for some kinds of content but not others the more that you can sort of bundle the stuff and say here's a fee that you pay on a monthly basis or an annual basis to the news then you're then you're in that then you're in news land and you can consume what you want that i think may be a way of protecting the news that's that's important but may be less  there's the whether to put material behind a paywall by an individual newspaper is is a matter of great discussion in the in the industry right now and there is no consensus there is some people believe it's right thing to do to charge in some fashion the the consumer others don't think it's the right thing to do what we are concentrating on what the industry doesn't agree on though is that those entities that use newspaper content for their own commercial gain should be paying a fair and reasonable fee for the use of that content and that's what target one is right now and if i can just add to that is that when you're when you're content is particularly specialized like minority publications offer that value is what is being sought after i mean we get phone calls constantly from organizations that are setting up these specialized sites so that they can draw diverse communities to their sites and so they want to use our content for their sites with no compensation to follow others i'll make clear i'm not here today to bail out the newspaper industry here to learn what that sustainable business model could be and i think from the media newspaper standpoint too there's caution i think in that the sense that you feel like you're drowning every lifeline looks good but you have to be careful whose boat you're being pulled into and if it's the government's boat you know there's real repercussions of that from your standpoint as well i think we all recognize that you sort of answered part of the question i have which is why don't you charge what you're worth as an originator of news most businesses that come from a chamber of commerce small business background most businesses struggle when the demand for their product goes down demand for news and information is increasing as you've all rightly said how do you capture the revenue to do that is the question so who who out there has that sustainable business model who is getting closer to replacing classified revenue losses and even some of the major retailers and others who are advertising which is also being impacted you know who's doing the best job of getting close is that you know of that sustainable business model or where we're seeing some success is in niche and elite publications where people are paying for civic knowledge can i just respond to this point that the internet is unbundling the package of things that were put together in the local newspaper and many people bought that local paper not because they're interested in the public affairs or political news but because they were interested in lots of other things of the sports news or business news and but the newspaper was able to collect revenue from all those diverse sources online well that breaks apart and demand specifically for public affairs journalism is shockingly low and so to expect that we're going to have the kind of journalism that keeps the government accountable to keeps a watch on but tensional problems at the local and state level in particular where there in my state new jersey we have an endemic problem of corruption we have and in demick shortage of good news in the state  this is the kind of thing where i think we we have some public problem that needs to be publicly addressed that let me add one other thing in in simplest terms the internet is advertising from news advertisers don't need the news to reach their audiences anymore and so the fundamental question is can we can the news industry find other sources of revenue that aren't basically display advertising and classified average distro thank you i would i would say to to your point about do people pay for the whole amount the answer is as tom mentioned newspapers have traditionally only had twenty percent of their revenue come from from circulation that actually may be changing a bit for two reasons one advertising has dropped off and frankly a lot of newspapers have had to as a result raise the the circulation prices so that that twenty eighty twenty ratio is changing the other point i want to make about the internet versus print from a traditional standpoint of print user reader a subscriber has always been worth a considerable amount of money on an annual basis to a newspaper for viewing for an ads the difficulty with and traditionally all traditional media have had some limit on the number of ads or the amount of time they can sell broadcast magazines radio there's always been a limit with the internet there is no such limit and as a result internet pricing is very very  low advertising on the internet is extremely cheap it has some disadvantages in advantages but it's very very inexpensive so if you take that same newspaper reader and you move them online reading the newspaper online they're worth as a as as a source of revenue drops considerably and in fact well well beyond half so it's just a difficult balancing situation right now because what newspapers are trying are doing in effect is you're replacing some of their print readers with online readers but the money doesn't flow in an equal basis just wanted to add also that the way a minority ethnic newspapers have survived  might be a model that that might work for others i mean when we approach an advertiser many times they have to park it they've got the advertising packet and then they've got this diversity pocket and we happen to always end up in the diversity park in which those dollars are not as great as the advertising dollars but that's the pocket we end up in and to meet their diversity needs this is where they spend money to advertise with us but what we find is that  lot of these advertisers are trying to reach our communities in different ways the advertising for them placing it in their publications may not be as important as how is other ways in which to reach these commute our communities so  know gotten involved in things that are really non journalistic in some ways that we've had to make journalism by sponsoring events and town hall meetings and different things that are better advertiser sponsored  and there happens to be advertising that's attached to that and that has proven to be successful because we're still here but we're still trying to figure out how to open that other door so that we but first i want to be very clear that this hearing is not about bailouts we're not talking about daylight bailouts we are through with bailouts but we should always talk about the best ways to  have tax and regulatory environment that will help businesses thrive and create jobs newspapers are an important business that plays an important role in our economy and in our system of checks and balances but it keeps being characterized as a bailout no one has mentioned a bailout except for my colleague and i want to make clear that that is not the purpose of this hearing our last question or was mr brady so i'll go to mr cummings from the great state of maryland thank you very much madam chair and i apologize for not having been here to hear the hearing earlier and i've got to get to another markup but i just was wondering gentlemen what  can we do to see that media continues to serve the public interest as a newspaper and history transitions to a new business model and start that start well i'm not entirely sure that the newspaper industry as a whole will arrive at that destination of a new business model there certainly will be some and i think particularly the more elite newspapers with a national yes they'll be those with niche audiences they will be able to survive very well i think in this new environment what i am much less confident about is that the ordinary political public affairs coverage at the state and local level that that will survive because it's not clear to me there is going to be a business model for that yeah it's worth probably noting that in the twentieth century when we with the development of radio and then television we had a rise in what social scientists call incidental news acquisition or incidental knowledge about civic life in other words if you watched interested in you you would find out about things that you would in a newspaper have skipped and the technology that we have now of the internet which is putting more power into the hands of the end user the consumer increases the consumer's ability to say i'm not interested in that and it's extremely difficult to imagine how we're going to you know we the age of force rather than later we were living through a very difficult recession as you know and we are living through norma's drop in advertising revenues that support local journalism as a result to answer your question very practical scale we would like to see the congress pass some legislation that would do things like let us write our losses back over a five year period instead of a two year period that's something that was part of the stimulus bill and the last minute it was made to only for small business we like other businesses would like to have that ability because that would give us cash to save jobs today we would like to be able to spread our pension refunding obligations out over a longer period of time that too would give us cash to save jobs now that's what's really on our minds at the present time you know and we watched  the sun paper in baltimore i mean it's been amazing to watch you have to year or really month that the month the loss of employees  and to see how the paper has shrunk and when i talk to my constituents what they say is that you know they read the sun paper only to try to get the local news and i've been that they will go to the new york times or the washington post when they want to get because they find that they can get much more news now you know when you when i also look at the cable shows and this is not just the internet it's a cable show that means they're constantly putting out news with  commentary and i think that perhaps i mean when you look at i'm not going to name any of the shows but sometimes i think that commentary is what i track people too i mean so you know it's one thing to get some straight news it's another thing to have a whole host of conservative moderate liberal folks talking about that news and interpretating it and giving people insight because the average person i mean if you look at jay jay leno is a lot of shows a lot of people don't know the difference between a city councilman and a congressman but to have that kind of further grim aspect to this whole picture and that is that newspapers are living off their aging readership they are not replenishing that readership with younger people at the right that they would require and so we are probably only seeing the beginning of this crisis it is in fact likely to intensify there's a very sharp difference today that did not exist thirty years ago in the rate at which people in their twenty's versus older people follow the news in any medium whether it's online print broadcast and so forth and  really are facing a future in which there's likely to be a diminishing audience for news i would like to add something to that and and counter it slightly and that is that what we what i see in the research is that younger people have a different approach to news they are on demand news consumers they want to know what they want to know when they want to know it and there been a big price i'm with the delivery system of old media for those audiences television and print we we've seen for fifteen years or longer younger people are not gravitating to those old platforms and they do get news on the internet and the chance that these older media institutions can survive by attracting new audience is actually enhanced by the new technology by the internet because they can deliver news to a new generation of people on a platform that the that generation wants to receive it if they can find a way to monetize that so although this is a dark aspect there is a there is some light on that horizon just one quick comment newspapers have traditionally been on print product a one to one time a day operation now with the web sites the papers and they wouldn't print it if it wasn't true doggone it letterman brought up an interesting point she talked about the taxing regulatory environment for for print journalism valid concerns last week  we were back in town after few weeks of being gone and the number of constituents small businesses were through my office i had the lady who owned the saddle making shopping for a cardiologist someone who did financial services a man who rebuilt the compressor years of automobile air conditioners and exported them to countries in latin america so it's sort of a varied group of entrepreneurs and small businesses in my district and i asked them how they were doing a valve easily all are struggling but maybe some things are starting to turn around for them and i said well are you planning on adding any jobs because i'm really concerned about where the jobs are going to come from and everyone said no because we don't know what you members of congress are going to do to us with the financial services bill with the health care bill with the energy bill the cap and trade bill so a lot of anxiety out there in the small business community about the next steps that congress is going to take and how that will affect their ability to maintain their businesses and their profitability and i suspect the news paper businesses is not immune to that and likely is suffering from some of the same things so perhaps if we were to look at this critically we say how do we set the regulatory and tax environment so all businesses might benefit not just picking winners and losers in the equation so let me ask you a question dr star you've been a prolific writer on health care and and health policy we are looking at bills on the house side the senate is looking at bills on the senate side and the president has committed to signing something if not this year this this congressional term but there's some anxiety out there about what the impact of this will be now if we sought to set up newspapers insulate them from some of the slings and arrows of congressional regulation and taxation should we go so far as to insulate the newspaper business from the eight percent payroll tax that possibly could be enacted if the house bill is for load to the letter i don't think the case for health care reform ought to rest on it's particular effects on on one industry or another but i could make a case although it's not really appropriate for this hearing that health care reform will be good for the economy as a whole that for example many people are reluctant to change jobs face job lock because of the potential loss of coverage if they go out and start a new business for example and we would see an improvement in productivity if people weren't limited in that way  because we could we could debate the merits of health and then clearly not the scope of this hearing or order or nor the time but i think again that the point is out there that there there is concern not just in the newspaper industry but in business across the board that what is congress going to do to us and and how our future is uncertain because of some of the things that we are we are observing in the united states congress stream i apologize i was out of the room when you gave your testimony and certainly  u dealt with the concept about the of the bailout but just for my edification perhaps you could just briefly run through that that concept again of what but the newspaper industry is asking for and what they're not asking for let me start with what we're not asking for as i said earlier we don't believe direct government financial assistance to newspapers is appropriate or wise for an industry's core mission is gathering analysis and dissemination often involving that very same government that was part of panel and as well as a better opportunity a lot longer opportunity to fund pension plans as practical cash generating steps that would indeed help retain jobs antitrust exemption may allow newspapers to develop collective pricing policies for online subscriptions without fear of government or private industry antitrust in your view is this  exemption needed or warranted let's start with you mr from the dealing with the any trust laws as currently interpreted  is a difficult situation for the industry right now principally because the department of justice has always held the relevant market for newspapers to be other newspapers and that is a a huge constraint out of date and indeed if we if other newspapers were the only competitors we faced we wouldn't be having this hearing today because we'd be in fine shape so i would i would suggest to you that the any trust laws do need to be interpreted differently in order for some of these for for industry wide solutions to emerge that could be pro competitive and could really help the newspaper industry and the comments i don't disagree with mr starr about that point about reinterpreting the scope of the market but i think the experience that we've had with the antitrust exemption so the newspaper industry should  cautionary lesson the newspaper preservation act of one nine hundred seventy gave the industry an antitrust exemption suppose so as more competition could be preserved but it really has been pretty much a failure in doing that and i would really be very concerned about giving the industry as a whole the authority to set prices for news which would set possibly lead to prices that would interfere with the distribution of news throughout the society and again what may look like a solution for the industry could actually be a problem for the country thank you mr rosenstiel you mentioned that young people are not reading newspapers or news as much as others and i recall in my eighth grade government class in a public school u s news and world report gave free magazines to every government student and we were required to read it and report on it every week to this day i cannot get through a week without reading the news magazines my week is not complete until i have read them  and thought about them a habit that i got into in the eighth grade now in france every eighteen year old is offered a free one year subscription to one of the country's major newspapers and do you think th would be an incentive or would this work to get our young people reading what ideas do you have to engage younger people in a habit of reading news magazines newspapers blogs essential news to analyze what is happening in their country in the world there is a growing movement in what people are beginning to call literacy which is somewhat different than media literacy in that it's focus newspaper business became more difficult the tendency was for newspapers to pull back on the first thing to go since it didn't generate any revenue and the readers were not coming along for another thirty years or twenty years after after the program so the newspaper industry has pulled away from that and the educational industry has pulled away from that journalism programs in high schools are now somewhat malnourished correct in what they've said it's also worth noting that the players here that the news industry is going to increasingly deal with aggregators internet access providers and where they're going to consider either issue you know is on the horizon you've got a very dispersed news industry a relatively dispersed compared to an industry of four or five companies in the other comments for the record whatever we might program thank you for your clarification and my time is expired mr brady enjoyed this question today i think i think you're going to solve the distribution problem i think you already are you know whether we're getting it from  and i still think and i've heard today sort of that for the public good pricing may not be the option that you desire but in the long be the elite that will pay for it i disagree with that consumers are smart getting more knowledgeable every day on new sources information credibility you know there's a there's a check and balances out in the internet that's amazing today almost immediate real time devices of your question let me say that there are there are a lot of devices out there now there will be more in the future there's a lot of development going on both in the u s and in europe for example several companies are working on a flexible tablet which would be very thin that would reload on a on a fairly quick basis it would it would lay out both newspapers and magazines and indeed books in a manner that you're more familiar with this more comfortable was describing the one time i think accurately that the devices you're talking about now tend to be a lean forward device this would be more of a lean back device like you used to with a newspaper or magazine or a book and so these things are coming in color so they'll be they'll be ways to distribute the news it'll be more comfortable for everybody and provide better business opportunities for those who create the  news is there anyone out there pushing the envelope well i wouldn't say that and i think this year is going to mark a change but the real innovation in news in the last couple years has been on the content production side in newsrooms exploring how to produce news that's more compelling online in a newspaper you only have a limited number of options of how you can cover an event you have a main narrative you can have a headline graphic on line and i have a slide in a presentation i do there i might slide currently has something like fifty one different ways that you could create content that would be appealing to user to describe an event the potential exists for a better journalism online and that i think is where if you look at the new york times website you see interesting use of the technology that's where the energy has been the efforts to try and innovate on the business side have been swamps to a significant degree at least in the last year and a half by the recession as john said just trying to cope with how to deal  with you know the next quarter and the next year and that has certainly made it more difficult to try and innovate and experiment you know pilot projects that you were going to try and give them a couple of years to see how they work how every profession has its schools but you've got some amazingly bright people who around here back home who are so knowledgeable on the issues institutional knowledge amazing i mean they match any member of congress plus the many local leader plus and when he finally figure out what their salary range is it's hard to believe they're still in the profession i don't know how that fits in the overall model but boy you've got to pay people to keep good people in this day and age with other options they can go to i'm sure that's a worry of the panelists but it's it's just sort of appalling what what those salary levels are and represented they are going down because what has been happening with the  change in and the financial condition of newspapers is not only that newspapers have been cutting newsrooms but they have been firing or are buying out their oldest employees their veteran reporters and often replacing them with junior reporters with interns in order to cut their labor costs and there is a real question as to whether or not there is going to be a career in journalism of the kind that it would give me an idea of the if if we were to proceed with the house or senate bill on the creation of the non profits for the for the news industry what what sort of savings with the newspapers be looking at or contrast the way of looking at that what would be the cost of revenue to the to the i r s does anyone have a good idea about that i don't think we were here s part of me wonders if you know looking at the a lot we're not this not a hearing on the legislation the legislation is still a backdrop for this hearing and what would that in fact even be enough or likely face with the automobile industry when in december when we were asked to to pump some more money in that direction what there is is is there enough money available in the taxing and regulatory environment to to save the industry i can tell you i mean i don't know if this is helpful or not but the newspaper industry last year took in if you take subscription and advertising revenue about forty five billion dollars in revenue and made on average about eleven percent profit so it cost with current expenses about thirty nine billion dollars to operate the industry if you go entirely on line you would lose ninety percent of your revenue but you'd also reduce your cost by roughly that is you can debate it but maybe you forty forty five percent by not having to print and  deliver those big numbers and that's you know and the industry is trying to figure out how can you have an industry that has improved over the last fifty years i mean we all complain about the press with good reason i'm a press critic i make my living doing that but the reality is that in the last fifty years we began to have more journalism because we had more commercial advertising and that's rapidly collapsing but even the extent that you can tell us are there are there any unique features to those that are doing better than others is there a best practice concept emerging from those that are remaining profitability of in this environment  i think even in this most difficult environment it's fair to say that individual properties have maintained at least some profitability and that is particularly true with regard to small  medium size and small market daily newspapers and community newspapers have weathered the storm a lot better or easier if that's a good word i'm not sure of as opposed to the major market dailies  principally it's because the major market papers did very very well with classified advertising for a very very long time and it was low cost and the and the revenue from classified advertising tended to drop pretty much to the bottom line or an awful lot of it to the bottom line and then along came the internet and particularly craig newmark and suddenly could get classified ads for nothing and that really did attack the rise revenue base of classified advertising so where once upon a time for example not so long ago newspapers sold classified advertising in print and then for an extra little bit you could you could get the classified ad on your website that's now turned around newspapers are selling on their website classified ads or classified ads system and then for an ad on you get the print ad with it so it's that's and that's in the demonstration of how the world has been flipped up upside down by the internet mentioned the smaller market a medium sized market but in a big market like new york city you have to side by side to york times wall street journal is one doing better than the other from a financial perspective well the two papers you you cite are both really national papers the wall street journal has a has a broad audience across the country for to think of them as new york papers interestingly enough if you look at their subscription and where where the people buy those papers you'd be surprised how what a large percentage of the new york times audience is outside the city of new york or the fact the matter is in this is no of course is the new york times coverage new york local news but the truly local papers in new york are probably the daily news in the post but look at it could you make a statement about the financial status of those two national new york papers companies i don't have that data in front of me they are they are notably different business models have roughly these numbers may be a little out of date but roughly half the readers of the new york times are around the metropolitan region of new york and half are dispersed around the country so some of their revenue is national advertising and some is local the wall street journal is a national newspaper and has financial a lot of financial advertising that wouldn't appear in any other newspaper and that's relevant to investors all over the country so there it's very hard to compare them in terms of businesses and then if you take any local newspaper its business model is drastically different than that of the new york times because they're their circulation and advertising base is almost always entirely local and the internet is a challenge that because if you're a local newspaper and you've got readers suddenly in europe your advertisers think well well what do i care that you've got the readers in europe but within that environment i mean clearly there are there are institutions that are doing ok and there are institutions that are not and is there any sort of general observation that you have within the industry that that leads you to believe that in general the big city metro papers that are not national and are not hyper local are the most vulnerable because they're caught in between the new york times the wall street journal on one hand and a community newspaper on the other models of those that would be successful in this environment in newspapers and in television station and so forth and there has it is now tax deductible as a business expense is the business is buying advertising they can deduct it there have been a number of proposals before congress to change that status to have the advertising taxed and i'd like to add what kind of impact would that have on the industry if if advertising business advertising was no longer tax deductible why does whatever bills before congress now to change that stat i mean i couldn't i couldn't we haven't studied to see what the financial impact of that would be but obviously anything that creates further disincentive for  advertisers to to spend money on newspaper advertising would probably depress those revenues further the reason that there's a lot of reasons that  advertising is vanishing from newspapers because there are many different sectors of advertising in newspapers john talked about what happened with classified changes in retailing had a huge impact on newspapers the and and and others that don't advertise in newspapers because they discount all their prices every day and people know that so if you look at the newspaper the advertising that was in a newspaper twenty years ago who those advertisers were and you look at the same newspaper today and who's advertising there you'd be shocked at the difference of who's not there anymore and who's who's replacing them mr stern you had your yes the answer i think to your question about deductibility of advertising across all media would be devastating it would be sensually the end of much of media it would be a horrible thing the only bills i've seen in the past and i don't think there's anger live right now has been too good to deny the deductibility of a certain category of advertising a particular prescription drug advertising was the one that popped up as as that's the beginning right but i think the congress would might want to go very carefully on and view those ideas was some concern not only as to the effects on the media but the fact that it would be favoring one kind of business duction over another kind of business deduction and i would suggest that that's probably not fair chairman chairman maloney and in my written testimony i emphasized the unwritten precedent that developed right at the founding of the republic as a result of the resistance to the british stamp act in seven hundred sixty five president that there would be no special taxes imposed on the press and if you look through american history that has actually been our practice very different from other countries we have not singled out the press for particular taxes and a tax on advertising would in effect be a tax on the media and therefore i think it really would run against what has been this unwritten precedent thank you and i agree with all of your testimony in that respect i was talking to a reporter earlier this week who works for a paper in a major city that is facing tremendous economic challenge and he was telling me how expensive reporting is that they started on a story involving the e mails of government officials at city hall and that it was extremely expensive to get those e mails extremely time consuming that resulted in a story that was important in some people's minds towards government reform and public policy that's important to the locality and he was into sizing how important independent creative original research is and how very very expensive it is and that a great deal of it comes from the media most of it comes from the media all of it comes from the media most of it certainly in newspapers in televisions and magazines and  many people are concerned about keeping that independent strong vigorous activity going that's part of our democracy is very important and one proposal that has come to me is to help news organs organizations is  the establishment of a blind trust that would accept donations from foundations and other individuals and the pooled funds collected by the trust would be shared among nonprofit news among news organizations profit or nonprofit that meets certain criteria and the government could also provide some funding or matching funding as they do for public television in your view would this work what would be the pros and cons and the start with this just i think with all due respect like to take a close look at something like that and analyze it carefully but i would it would make one comment in terms of scale and that is and this probably applies to somewhat to the idea of not funding and nonprofits if you take it newsroom and gentleman our board of directors from the dallas morning news testified senator kerry's committee in the senate in june along these lines i recall is testimony dallas morning news spends about thirty million dollars a year on their newsroom and if you look at that that's a lot of money and that's an every year kind of thing and it's probably not going to go down it's probably going to go up so if you if you if you're talking about foundation and support and all of that  typical foundation gives what five percent of their corpus per year they're required to do so if you look at it from just a scale standpoint that would require six hundred million dollars of foundation corpus to support and all of that would be directed that one newsroom support on an annual basis a newsroom the size the dallas morning news as so again i think there might be some great ideas out there we'd like to take a look at them but there is a scale issue here i would i would add because we've looked at this even though the estimates are low because you mention the news budget that you didn't mention the h r department and all the other things that are required to support the new budget so the numbers actually are even higher than most of the estimates but i don't think anybody is suggesting or shouldn't suggest that this would completely replace all of the sources of revenue i think what we're talking about is ending to revenue that hopefully will not totally disappear and that might be the difference enabling a news organization to undertake the kind of investigative projects that you mentioned and i think there are there certainly is a role for nonprofit foundations and i would say possibly also for some kind of govern subsidy we do already have a mechanism with public radio and  public television and maybe we should think about expanding the mandate for those organizations and broadcast television is provided free access to the public airwaves in exchange for licenses to use the public spectrum broadcasters are expected to provide programming in the quote public interest end quote however the requirements to meet the public interest standard are quite lax and some some common some people have suggested charging broadcasters for the use of the public spectrum and the fund could be used to support local journalism and independent news gathering and do you think  he system could support the industry what is your response to that idea anyone well the television industry is full of sort  of vestige ill rules and regulations also to the two to eighteen year old news consumer of the future the distinction between broadcast and cable  doesn't really exist there is they all come through the cable system but they have drastically different business models the broadcasters are getting no fee from the cable operator no there is no subscription for n b c and c b s so all of their money has to be made from advertising but every cable channel generates roughly fifty percent of their revenue from subscription fees that are embedded in the cable but they are now direct competitors in many ways and in many practical ways a single cable system so and i think that business is in many ways is looking at a landscape  already very few people who watch television are actually getting the signal over the air they're getting the signal by cable or by satellite and so the question is really risen among a lot of the networks whether they whether they need their local stations i mean maybe they'd be better off of being a cable channel i think the notion of charging for the spectrum  you know may just be too late thank you my only comment is having frankly represented traditional media for thirty some years both broadcast television and newspapers is i would i would respectfully suggest that the government broadly speaking be very careful about continuing regulation of traditional media yet  worrying and actually in some ways insulating new media from any kind of similar treatment when for example the congress has chosen to insulate the internet from taxation i don't disagree with that but  i do think that that traditional media is still burdened with regulation that others don't encounter and that makes life for the traditional media charter i want to thank the panelists for your time you have certainly given us a great deal to think about i would say that the members on both sides of the aisle support an independent strong vigorous news gathering organization that has been equally critical of democratic presidents season administrations and republican administrations and caused equal pain in both sides of the aisle and raised very important issues that need to be considered and thought about you play a vital part in our democracy and we thank you and this this meeting is adjourned thank you very much