Could BBC-style ‘news tax’ save U.S. press?

Amid growing economic distress at newspapers and magazines, a number of folks have suggested imposing a BBC-style tax on American households to rescue the struggling print media.

Could the idea work? Potentially. Would it help? Possibly. Could it really happen? You be the judge.

Although the idea of a news tax raises a host of troubling questions, it has one powerful argument going for it: It worked great for the BBC.

The British Broadcasting Co. has been supported since 1922 by a tax imposed first on radios, then on radios and televisions, and now on televisions only.

The annual fee, which started at 10 shillings per radio receiver, today is £142.50 (US$227.43) for a color TV and £48 (US$76.61) for a black-and-white set. The fee applies to those who view TV on computers and blind people get a half-off discount.

Assuming the tax is collected on all of the 26.3 million TVs in the UK, the levy generates $3.7 billion a year to help fund eight national television channels, five national radio networks and an assortment of local broadcast and Internet services in England, Scotland, Wales and Northern Ireland.

The tax evidently is one reason the BBC continues to cover Iraq on a full-time basis, while the once-proud American Broadcasting Co. is outsourcing a good deal of its coverage of the conflict to – you guessed it – the BBC.

The BBC tax dates back to the earliest days of broadcasting, when the government decided it was important to ensure that radio service and quality programming were widely available throughout the British Isles. When TV was invented, the tax simply was carried over to it. Today, it supports a number of top-notch websites, too.

In the United States, by contrast, the print and broadcast media grew up as privately capitalized businesses, prospering handsomely for decades until the Internet-enabled media rocked their world.

The notable exceptions to private media ownership in U.S. are National Public Radio and the Public Broadcasting System, which each derive about a fifth of their funding from federal sources; about a fifth of their funding from state and local government; about a fifth of their funding from educational institutions, and the rest of their funding from foundations, corporate donors and listeners and viewers like you.

In the absence of a tradition of government support for the media in the United States – not to mention the constitutional proscription against government interference with the press – a move to impose a fee to fund newspapers would be, to say the least, a sharp break with precedent.

For the sake of argument, however, let’s think about how a news tax would work.

The most popular proposal, which has been discussed but not advocated by such industry leaders as Tom Rosenstiel, the director of the Center for Excellence in Journalism, would "embed" a fee to pay content producers in the bill of everyone who subscribes to Internet access through a telephone company, cable-television service or other provider.

Assuming 75% of the 118.3 million U.S. households subscribe to Internet service and the news tax were $10 per month, the measure would raise the respectable sum of about $10.6 billion per year.

If the tax were allocated strictly to newspapers by daily circulation, then 350,000-circulation papers like the Boston Globe or San Francisco Chronicle would get annual subsidies of $85 million apiece. That would be enough to cover the $1 million-per-week in operating losses that their owners say each paper is suffering and make it possible to reverse some of the recent draconian staff cuts at each publication.

A 10,000-circulation paper would be entitled to a windfall of $2.4 million, enough to cover the pay and benefits for nearly 50 employees for a year.

If the ball got rolling for a news tax, however, wouldn’t magazine and web publishers want a share of it, too?

If the tax had to be divided among the nation’s 1,400 daily newspapers, 26,400 magazines and 75 million active blogs, then the estimated annual subsidy would tumble to less than $50,000 for the Globe or Chronicle, $1,400 for a 10,000-circulation paper and a few bucks for a blog with a handful of page views.

Apart from the apparently negligible economic benefit a news tax would deliver if it were applied broadly to all print and web publishers, a levy intended to assist strictly newspapers would face a number of daunting barriers of its own:

:: Only a third of Americans cared enough about newspapers to read one in the prior day, according to a survey released in August by the Pew Center for the People and the Press. Why would the other two-thirds be willing to pay the tax?

:: The vast bulk of the American population has come to believe that news, information and entertainment are supposed to be free. What would motivate them to be willing to pay the tax?

:: Voters don’t like new taxes and politicians don’t like doing things that voters don’t like. Are there enough brave political leaders to take this on?

You be the judge.