Feeds

Gadget tax needed 'to save US newspapers'

The FTC does the sums. And they don't add up...

The Power of One eBook: Top reasons to choose HP BladeSystem

Beware, anybody working in music or movies industries who thinks a levy - one that raises a little pot of money - will save the day. Newspaper tycoons got there first and parked their backsides in the little pot, and won't budge.

They'll be able to do so because politicians still fear what newspapers say about them, and they don't fear what Hollywood or music industry can throw back. Do you think Dizzee Rascal is knocking up some rhymes about the abolition of Capital Gains Tax? If he did, would anyone buy it? I see a couple of hands, but not a Top Ten hit.

When it comes to the barging to the front of the queue for handouts, newspapers will always have the upper hand. Levies are simply indiscriminate stealth taxes, and in Spain I'm told it was the introduction of a levy on consumer electronics that became the lightning rod for resentment.

The levy transformed Spain, where there's no legitimate digital music market, into a cheerful nation of freetards. Now nobody pays for online content, and IDC estimates piracy losses add up to $12bn a year. Not so stealthy then. And not a lot raised.

The message is: be careful what you wish for. And pay close attention to what's happening in the US. There, the telecomms competition regulator the Federal Trade Commission has been conducting some workshops on the future of newspaper content.

The resulting draft discussion paper chews over several ways of helping the newspapers, which have already received a few useful 'hand-ups' from Government. Since 1970, newspapers have been given an antitrust exemption, enabling them to run as monopolies, or as duopolies with Joint Operating Agreements (JOAs). The result has been as stultifying as you would expect.

Among the hand-outs discussed are establishing a 'journalism' division of Clinton's AmeriCorps community service program, increasing funding of the Corporation for Public Broadcasting and a tax form tick box giving taxpayers the option of donating up to $200 to the "non-profit media organization of their choice".

You may call it charity, but the FTC calls them "Citizenship News Vouchers" and ponders whether this "could be structured to apply to commercial, as well as non-profit, news entities". Corporate welfare, in other words.

Another idea is to funnel grants to universities. Amazingly, there are still 200,000 journalism "and mass communication students" in the US. If just 10 per cent of those did real journalism (as opposed to reading about it), the FTC muses, that would make up the number of jobs lost in the professional news sector.

The FTC also mulls piping some of the $700m spent on the Cold War propaganda channels Voice of America and Radio Free Europe - yes, they're still going - on domestic coverage. Take out the recycling.

But the contentious part comes from how the revenue will be raised. The measures outlined above might cost $35bn a year. Tax breaks on spectrum (not applicable to newspapers, obviously) might be worth between $3bn and $6bn. A three-cent a month tax on phones might generate another $6bn. And a tax on consumer electronics would raise $4bn.

So that's not a lot of money. But a lot of angst for consumer electronics purchasers.

The only UK newspaper business to call for tax handouts so far has been, perhaps unsurprisingly The Guardian, which loses £100,000 a day. The Times and Sunday Times papers lose twice as much, Dan Sabbagh notes here.

But the difference is that one of the two newspaper groups has something that might be called a revenue strategy. Murdoch wants people who read to actually pay for it. The Guardian thinks this notion is not in the spirit of the times - take a deep breath:

… a trend about how people are expressing themselves, about how societies will choose to organise themselves, about a new democracy of ideas and information, about changing notions of authority, about the releasing of individual creativity, about an ability to hear previously unheard voices; about respecting, including and harnessing the views of others. About resisting the people who want to close down free speech.

So says Alan Rusbridger.

That's as may be, but he's still asking taxpayers to bail out a business that refuses to help itself, and that's pretty cheeky even in normal times, with a sympathetic administration. These aren't normal times, and the Government isn't particularly sympathetic. It cut public sector recruitment advertising this week by 60 per cent. ®

Download the draft here (pdf, 340kb)..

Top three mobile application threats

More from The Register

next story
Stick a 4K in them: Super high-res TVs are DONE
4,000 pixels is niche now... Don't say we didn't warn you
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
Philip K Dick 'Nazi alternate reality' story to be made into TV series
Amazon Studios, Ridley Scott firm to produce The Man in the High Castle
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Bose says today is F*** With Dre Day: Beats sued in patent battle
Music gear giant seeks some of that sweet, sweet Apple pie
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
Too many IT conferences to cover? MICROSOFT to the RESCUE!
Yet more word of cuts emerges from Redmond
Joe Average isn't worth $10 a year to Mark Zuckerberg
The Social Network deflates the PC resurgence with mobile-only usage prediction
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Application security programs and practises
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Securing Web Applications Made Simple and Scalable
Learn how automated security testing can provide a simple and scalable way to protect your web applications.