I fully expect that most tele­vi­sion journ­al­ists will not have dived into a copy of Switch­ing Chan­nels: Organ­iz­a­tion and Change in TV Broad­cast­ing by Richard E. Caves. Freako­nom­ics it is not.

But Caves is the guy (ok, Nath­aniel Ropes Research Pro­fessor of Polit­ical Eco­nomy at Har­vard) who sug­ges­ted some­thing that may be appeal­ing to journ­al­ists when con­sid­er­ing the news media’s cur­rent eco­nomic plight.

In Cre­at­ive Indus­tries: Con­tracts Between Art and Com­merce — yes, another read that’s drier than Rupert Mur­doch’s tear duct — Caves con­cerned him­self only with music, movies and books.

He argued that “cre­at­ive” eco­nomic activ­ity has spe­cial char­ac­ter­ist­ics (some of which may apply to the non-craft end of journalism):

1. Demand Is Uncer­tain “nobody knows”
2. Cre­at­ive Work­ers Care about Their Product “art for art’s sake”
3. Some Cre­at­ive Products Require Diverse Skills “mot­ley crew”
4. Dif­fer­en­ti­ated Products “infin­ite variety”
5. Ver­tic­ally Dif­fer­en­ti­ated Skills “A list/B list”
6. Time Is of the Essence “time flies”
7. Dur­able Products and Dur­able Rents “ars longa”

I don’t think I neces­sar­ily agree with all of Caves’ assump­tions. There are plenty of non-creative examples of work­ers eco­nom­ic­ally over-investing (“caring”) in products or ser­vices (think McN­ulty in The Wire).

But he does start the ball rolling on try­ing to apply eco­nomic argu­ments to issues of qual­ity and resourcing in the changes affect­ing the news media, in terms that have hitherto been dis­cussed in rather woolly ways (e.g. journ­al­ism is a “pub­lic trust”).

Any­way, to cut to the chase, here’s Caves unpack­ing the demise of one part of the news media, broad­cast news, which also embod­ied the most expli­cit “pub­lic trust” con­tract between gov­ern­ment and media:

The broad­cast net­works have been to some degree diver­ted from profit-maximizing policies by a vague social con­tract with the gov­ern­ment, imple­men­ted partly through the fran­chises held by owned-and-operated sta­tions and partly by reg­u­la­tions of the FCC.

Because the broad­cast net­works and sta­tions together long enjoyed mono­poly rents, they could pay some heed to these social-contract pro­vi­sions while retain­ing reduced but still gen­er­ous profits…

As their main trib­ute to this social con­tract, each net­work had main­tained an extens­ive news-gathering organ­iz­a­tion, a badge of “pub­lic trust,” bestowed on broad­cast­ing by gov­ern­ment license and worn with pride by the net­work news organ­iz­a­tions themselves…

As often hap­pens when prof­it­able, oli­go­pol­istic indus­tries must adjust to major adverse dis­turb­ances, incum­bent man­agers were slow to over­haul their busi­ness strategies. The stock mar­ket thereupon exer­ted decis­ive pres­sure for a profit-seeking (profit-preserving) response.

Depressed stock prices attract raid­ers, lead­ing to changes in the man­age­ment of the networks…

This intens­i­fied pres­sure on the net­works to max­im­ize profits could have accoun­ted for some of the moves to reduce qual­ity, thus qual­i­fy­ing the role for the mech­an­ism of endo­gen­ous fixed costs.

Sounds right to me. And maybe it will dry out some of our own wet and woolly thinking…