A Grattan Institute report released today finds Australian governments spent A$34 billion, or 21%, more on transport projects completed since 2001 than they first told taxpayers they would. And as we enter the era of megaprojects in Australia, costs continue to blow out.
Transport projects worth A$5 billion or more in today’s money were almost unheard of ten years ago. Today, as the chart below shows, megaprojects make up the bulk of the work under way across the country.
We are also hearing calls to add to this bulging pipeline. In June, the transport and infrastructure ministers of all states and territories said they were “clearing the way for an infrastructure-led recovery” from the COVID-19 recession.
Almost half of the projects with an initial price tag of more than A$1 billion in today’s money had a cost overrun. These projects overran their initial costs by 30% on average. The extra amount spent on some megaprojects was the size of a megaproject itself.
Cost announcements before governments were prepared to commit formally to a project were particularly risky. Only one-third of projects had costs announced prematurely, but these accounted for more than three-quarters of the A$34 billion overrun.
When early costings of infrastructure turn out to be too low, it distorts investment planning in three ways:
underestimating the costs of transport infrastructure can lead to over-investing in it relative to other spending priorities
if governments misunderstand the uncertainty in a project’s cost at the time they commit to it, their decision to invest in that project was made on an incorrect basis
because unrealistic cost estimates are more prevalent for larger projects, governments are more likely to over-invest in larger projects.
There’s also a fourth and no less important problem: when unrealistically low cost estimates are announced, the public is misled.
Despite the experience of the past 20 years, the costs of big projects continue to be underestimated. The chart below shows A$24 billion more than first expected will be spent on just six mega megaprojects (that is, projects with an initial cost estimate of A$5 billion or more) now under construction. Overruns on other megaprojects have been reported too.
With megaproject costs continuing to blow out, governments should take immediate steps to manage better the portfolio of work under way — particularly if they are looking to add to it in the name of economic stimulus.
Each state’s auditor-general should conduct a stocktake of current projects. This would give the public and the government a clear picture of the situation.
Ministers should begin reporting to parliament on a continuous disclosure basis. Any material changes in expected costs, benefits or completion dates of very large projects should be disclosed.
Steps should be taken to put decisions on the incoming batch of projects on a sounder basis, too. When announcing a cost, ministers and government agencies should disclose how advanced the estimate is. If the proposal is at an early stage, they should quote a range of estimates.
Governments should also require their infrastructure advisory bodies to at least assess — if not approve — large proposals before funding is committed.
Looking further ahead, action is needed to stop the pattern of spending billions more than expected on megaprojects. State departments of transport and infrastructure should devote more resources to identifying modest-sized transport infrastructure proposals.
The World Health Organisation has always been interested in housing as one of the big “causes of the causes”, of the social determinants, of health. The WHO launched evidence-based guidelines for healthy housing policies in 2019.
Australia is behind the eight ball on healthy housing. Other governments, including in the United States, United Kingdom and New Zealand, acknowledge housing as an important contributor to the burden of disease. These countries have major policy initiatives focused on this agenda.
In Australia, however, we do housing and we do health, but they sit in different portfolios of government and aren’t together in the (policy) room often enough. Housing should be embedded in our National Preventive Health Strategy.
The COVID-19 pandemic has forced us to rethink how we approach health and protect our populations. It has amplified social and economic vulnerability. The pandemic has almost certainly brought housing and health together in our minds.
Housing – its ability to provide shelter, its quality, location, warmth – has proven to be a key factor in the pandemic’s “syndemic” nature. That is, as well as shaping exposure to the virus itself, housing contributes to the social patterning of chronic diseases that increase COVID-19 risks.
Housing affects health in many ways. At the broad scale, housing disadvantage, unaffordable housing and housing of poor quality have been the focus of much recent Australian research. More specific housing drivers of health, such as household mould, injury, overcrowding, noise, cold and damp, have received renewed global attention.
However, capturing the combined health effect of housing is difficult. It’s hard to measure and has many components, and everyone has slightly different housing (and health).
But epidemiologists can provide us with a useful way of estimating the “burden” of various risk factors for population health. Housing risk factors have rarely been examined in Australia, but our estimates flag that the increasing health burden of housing demands attention.
For example, we estimate the health cost (measured in disability-adjusted life years) due to respiratory and cardiovascular disease that can be attributed to mouldy or damp housing is about three times the cost attributable to sugary drinks in Australia. Damp, cold and mouldy housing generates a substantial health burden and could be an easy target for public health prevention strategies. These housing conditions stand alongside many of the classic risk factors such as diet, smoking and obesity.
This estimate of health burden does not even factor in the important role housing plays in mental health. Housing affordability, security, suitability, location and condition are all associated with good mental health.
With rates of eviction likely to increase once moratoriums are lifted across the country, the housing-related mental health burden will almost certainly increase too.
Simple housing-focused interventions could reduce the sizeable health burden from housing-related problems. As the WHO advocates, this requires policy and research that have an eye on both health and housing.
In practical terms, a preventive health strategy would include:
minimum rental housing standards to protect occupants’ health, which would target structural factors related to damp and mould, ventilation, heating and cooling, injury hazards, maintenance and repair
good-quality public housing that is easy to access as a foundation for healthy lives
help with fixing problems, such as mould removal and servicing of heaters, for people in poor-quality housing
insulation to maintain indoor temperature and increase energy efficiency.
COVID has caused us to rapidly rethink public housing, nursing homes, share houses and small inner-city apartments. When choosing our current housing, few of us would have factored in the potential for isolation and loneliness, the need for separate working and study spaces, access to private green space, or the infection risk of shared lifts.
The experience of many Australians during the pandemic has almost certainly changed our view of the housing that we need, and what we consider to be healthy. It is time to harness this knowledge and learn from our COVID-19 experience.
Many have lamented the missed opportunity to create economic stimulus in our nation’s COVID recovery plan by building more social housing. But social housing is only a small part of the story. Australia needs to embrace a future where good population health goes hand in hand with good-quality, affordable and secure housing – where health is at the forefront of housing policy and public preventive health strategies harness housing.
Rebecca Bentley, Professor of Social Epidemiology, Principal Research Fellow in Social Epidemiology and Director of the Centre for Research Excellence in Healthy Housing in Melbourne School of Population and Global Health, University of Melbourne and Emma Baker, Professor of Housing Research and Deputy Director of the NHMRC Centre of Excellence for Healthy Housing
As Australia begins to relax its COVID-19 restrictions there is understandable debate about how quickly that should proceed, and whether lockdowns even made sense in Australia in the first place.
The sceptics arguing for more rapid relaxation of containment measures point to the economic costs of lockdowns and appeal to the cold calculus of cost-benefit analysis to conclude that the lives saved by lockdowns don’t justify the economic costs incurred to do so.
Their numbers don’t stack up.
To be able to weigh the value of a life against the economic costs of forgone output from lost jobs and business closures, requires placing a dollar value on one person’s life. This number is called the value of a statistical life.
What are the benefits of the shutdown? This is the value of lives saved plus any indirect economic or health benefits. Lives saved are those excess lives that would be lost if government relied on a strategy that allowed enough people to get infected to result in so-called herd immunity.
How many extra lives would be lost under this second strategy?
To answer this, we need assumptions about the virus.
The lives lost if we let it rip
The initial reproduction rate of the virus, R0, was thought to be about 2.5. This means that every 2 people infected were likely to infect another 5; producing an average infection rate per person of 2.5.
Herd immunity for COVID-19 is estimated to require roughly 60% of the population be infected before the curve begins to flatten and the peak infections fall.
This happens when the reproduction rate, R0, falls below one. Because of subsequent new infections, the total number infected over the course of the pandemic is closer to 90%.
Given a population of 25 million people and assuming a fatality rate of 1%, this would produce 225,000 deaths.
An assumption of a 1% fatality rate is low from the perspective of those making decisions at the onset of the pandemic, at a time when crucial and reliable data were missing.
Those lives are valued at $1.1 trillion
Converting those fatalities to dollars using the Australian value of a statistical life of A$4.9 million per life yields a cost of A$1.1 trillion.
In rough terms, that’s the amount we have gained by shutting down the economy, provided deaths do not skyrocket when lockdown measures are relaxed and borders re-open.
It is about three fifths of one year’s gross domestic product, which is about A$1.9 trillion.
What are the costs of the shutdown?
These are the direct economic costs from reduced economic activity plus the indirect social, medical, and economic costs, all measured in terms of national income.
A starting point is to take the lost income that occurs from the recession that has probably already begun.
What will the shutdown cost?
Let’s assume that the downturn results in a 10% drop in gross domestic product over 2020 and 2021 – about $180 billion – consistent with IMF forecasts of a fall in GDP of 6.7% in 2020 and a sharp rebound of 6.1% growth in 2021, and comparable to the Reserve Bank of Australia’s forecasts in the latest Statement on Monetary Policy.
Comparing this cost from shutting down – about $180 billion – to the benefit of $1,103 billion – makes the case for shutdown clear.
But this calculation grossly overestimates the costs of the shutdown.
The recession is a consequence of both the shutdown and the pandemic.
We need to attribute costs to each.
Most of the economic costs of the recession are likely to be due to the pandemic itself rather the shutdown.
Many costs would have been borne anyway
Even before the shutdown, economic activity was in decline.
Both in Australia and internationally air travel, restaurant bookings and a range of other activities had fallen sharply.
They were the result of a “private shutdown” that commenced before the mandated government shutdown.
Even in a country such as Sweden, where a shutdown has not been mandatory, there has been a more than 75% reduction in movement in central Stockholm and a more than 90% reduction in travel to some domestic holiday destinations.
To be generous, let’s assume the costs attributable to the government-mandated part of the shutdown are half of the total costs, making their cost A$90 billion.
In reality, they are likely to be less, one important study suggests much less.
It is hard to imagine a much bigger private shutdown not taking place had the government decided to simply let the disease rip until its spread was slowed by herd immunity.
Support is not a cost
It is also important to note that the government’s spending of A$214 billion to support the economy during the shutdown is a transfer of resources from one part of society to another rather than a cost.
It creates neither direct costs nor benefits for society as a whole, other than the economic distortions coming from raising the revenue to service the spending.
With long-term government bond rates near 1% (less than inflation), the total cost of distortions is likely to be tiny.
Of course, this discussion simplifies what are incredibly complex social, health and economic questions. There are clearly further costs, from both relaxing restrictions and keeping them in place.
Other costs are not that big
These costs are worthy of serious study and should rightly be part of a comprehensive public policy discussion. But looked at through the lens of a cost-benefit analysis these combined effects are likely to be small relative to the value of preventing mass death.
Among them are the incidence of mental health problems and domestic violence under lockdowns. They are important concerns that should be addressed by targeted and well-designed programs.
Weighing against that is evidence that economic crises are associated with declines in overall mortality rates.
While suicides rise, total mortality, including deaths from heart attacks and workplace and traffic accidents, falls.
In the specific case of this pandemic there is survey evidence based on respondents from 58 countries suggesting that strong government responses to the pandemic have been reducing worry and depression.
Also, we have to acknowledge that recessions and educational disruption have health and economic costs that are unequally spread.
The shutdown disproportionately impacts more-disadvantaged people including short-term casual workers, migrant workers, those with disabilities and the homeless.
The most-disadvantaged suffer, either way
This skewing will also be present in the herd immunity option. As New York City makes clear, a rapid spread of the disease also disproportionately impacts disadvantaged communities. One can only speculate about the disease burden should some of our remote indigenous communities get exposed.
To this we should add further achievements of the shutdown:
elimination of mental trauma and grief from losing our loved ones
avoiding the costs of possible longer-term implications of the disease, which we still know little about
avoiding a collapse in the capacity of the health system to deal with other emergencies through the sheer numbers of COVID-19 infected combined with staff shortages due to illness
Those advocating cost-benefit analysis of this kind have to apply the principle systematically. It is difficult to see how the total of these sorts of considerations on each side of the ledger could compare to the benefit of lives saved. They will be an order of magnitude, if not two, smaller.
$90 billion, versus $1.1 trillion
In the cold calculus of cost-benefit analysis, a highly pessimistic view of the economic costs of Australia’s shutdown comes to around $90 billion.
It is a small price to pay compared to the statistical value of lives the shutdown should save, around A$1.1 trillion.
The question we now face is how quickly to relax restrictions. Here, too, there are costs and benefits, and we need to be mindful of the economic cost of a second-wave outbreak, plus mortality costs of disease spread before effective treatments or vaccine become available.
And in all of this bean counting, we should remember that putting a price tag on human life is sometimes unavoidable – such as when a doctor with access to only one ventilator has to choose between two patients.
But we shouldn’t mistake necessity for desirability. We should seek to avoid needing to make such wrenching choices whenever possible.
Dr Jen Schaefer of the Royal Children’s Hospital Melbourne assisted with the preparation of this piece.
Given the very low number of new cases of COVID-19, the assumption we have tested is that there would be a one in ten chance of a new outbreak requiring the reintroduction of restrictions.
We also assume that if there was a new outbreak, there would be a 95% chance it could be controlled by re-imposing restrictions on bars and restaurants and only a 5% chance it could not.
It’s a matter of probabilities
If the outbreak was controlled by reimposing restrictions (the 95% probability) we assume an extra 40 COVID-19 deaths and an extra four weeks of restrictions at a financial cost to the government of $6.8 billion.
If the outbreak was more severe and a broader set of restrictions are required (the 5% case) we assume an additional 200 deaths and extra cost to the government of $17 billion.
(We also assume that 25% of the government spending to support the hospitality industry would remain because a decision to reopen bars and restaurants would not result in the industry returning to it’s pre-COVID-19 state – many people would remain cautious about the risks of contracting COVID-19 or have become conditioned to less frequent socialising.)
When we weigh these costs by their probabilities we get expected costs to the government from reopening of $1.1 billion, compared to costs from keeping bars and restaurants closed for another week of $1.7 billion.
Is the $600 million per week value for money?
It suggests the government would be $600 million per week better off it it reopens bars and restaurants.
We would expect a number of extra COVID-19 deaths. Multiplying the probabilities of the extra deaths under each scenario by the likelihood of each scenario suggests there would be an extra 4.8 deaths if bars and restaurants are reopened this week.
Because the average age of people dying due to COVID-19 is around 80 years, and each might have around ten more years to live, the number of life years per week that would be lost as a result of the $600 million per week the government saved would be 48.
Our analysis leaves much out. It includes neither the negative impact of COVID-19 on people’s quality of life, nor the negative impact of shutting bars and restaurants on people’s health and quality of life.
It gives us an indication of how many life years the government is saving for the $600 million per week it is costing it to keep bars and restaurants closed.
It suggests the government could save many more life years by spending the money in a different way.
When the case for big transport projects is made without due analysis, we risk building the wrong projects. The result is we waste billions of dollars and rob ourselves of the infrastructure our booming cities need to be more liveable. Given how fast our big cities are growing, we simply can’t afford to make decisions based on limited or misleading information. Yet this keeps happening.
The proposed airport rail links show how governments continue to make huge taxpayer commitments to projects before they are able to articulate the costs, benefits and risks.
In the case of proposed road congestion charges we see an important reform languishing. This is because when reforms rest on obscure or unclear analysis they inevitably fail to generate public support.
In the case of the recently announced multi-billion-dollar investments in airport rail in Western Sydney and Melbourne, neither project has a business case. Yet politicians on both sides tripped over themselves in committing to building them.
There are good reasons to be wary of their eagerness. A government study released this year stated that Western Sydney airport rail wouldn’t be needed to cater for customers and workers at the airport until 2036 at the earliest. Without a business case, we have no way to understand the grounds on which the government still believes this project represents value for money.
And Infrastructure Victoria says upgrading airport bus services should be investigated first. This is because, at A$50-100 million, bus services would be a much cheaper way to tackle the same problem. It has also said the rail line should be delivered – but not for at least 15 years.
Touting estimated benefits without showing calculations
The second example of Australia’s transport planning information deficit is different but still damaging. It concerns the way infrastructure experts encourage governments to make worthwhile but politically challenging reforms to how we use existing infrastructure. The idea is to get more value from the assets we already have.
Infrastructure Australia advocates a road congestion tax. This would replace annual registration fees and petrol taxes with a scheme that charges motorists more when they travel in congested places at congested times.
It’s a very good idea. Indeed, a Grattan Institute report last year recommended governments think seriously about road congestion charges for Sydney and Melbourne. But the way Infrastructure Australia has mounted the case leaves a lot to be desired.
Last month, Infrastructure Australia released estimates of the benefits, prepared with PwC, of a scheme to charge motorists more precisely according to the location, time and distances they travel. According to these estimates, in just over a decade, Australia’s GDP would be A$21 billion larger every year – and this would increase to A$36.5 billion a year by 2047.
The problem is that Infrastructure Australia provides little information about how these enormous numbers were calculated. In a flawless example of circular reasoning, IA refers to analysis done by PwC. PwC in turn notes that the estimates were “collaboratively developed by IA and PwC”.
The calculations do not appear to have included the costs of implementing and running such a scheme. And we have been told nothing about how this grand plan might work in practice.
Converting reductions in travel times to increases in GDP
The most commonly cited estimates of the “avoidable costs” of congestion in Australia come from the Bureau of Infrastructure, Transport and Regional Economics. In 2015, BITRE estimated the annual costs for Australia’s eight capitals totalled about A$16.5 billion. This was forecast to rise to about A$30 billion by 2030.
Such estimates have been important in highlighting the fact that congestion is not just aggravating but costly. But such estimates are, as BITRE itself states, “very blunt instruments for estimating and projecting congestion occurrence”.
It is difficult to precisely convert estimates of avoidable congestion costs into changes in GDP, of course. But the new Infrastructure Australia estimates do not even follow some simple, but important, rules of modelling.
First, they don’t make it easy for readers to see the basis for the assumptions used. Second, they don’t appear to have factored in costs as well as benefits. And third, in a situation where significant uncertainty surrounds the estimates, they haven’t published a range for the estimated impacts.
Getting transport projects right is critically important in cities that are already under pressure. Yet too many big infrastructure calls in Australia are based on misleading information or wafer-thin evidence. We need to do better.
Australia loses nearly A$2 billion of GDP every year due to people with cancer leaving the workforce.
A study published today in BMC Public Health showed that 67% of Australians of working age (25-64) diagnosed with cancer reported changes to their employment in 2015, such as reduced hours and stopping work. Around 50,000 people with cancer weren’t working at all.
The authors calculated this equated to a loss of A$1.7 billion in GDP.
Compared to the workforce rates of other long-term health conditions, such as chronic epilepsy, heart disease and diabetes, those with cancer were almost twice as likely to not be in the workforce.
A previous report showed loss of productivity due to cancer diagnosis accounts for around 54% of the total lifetime cost of cancer. This is compared to only 29% in direct costs, such as medical treatment.
Previous studies show around 40% of cancer survivors will return to work after treatment at six months following a diagnosis, and 89% after two years.
The authors called for additional support from government, employers and the medical profession for cancer survivors wanting to return to work.
Lead author and lecturer at James Cook University, Nicole Bates, said returning to work was “an important milestone, both financially and emotionally”.
Australians with a cancer diagnosis who didn’t have a tertiary qualification were nearly four times as likely to not be working as those who did. Other factors affecting work status included having a manual labour job, less flexible working arrangement, and the type of cancer and treatment.
Professor and medical oncologist at Flinders University, Bogda Koczwara, said lack of flexible employment was a significant roadblock to cancer survivors re-entering the workforce. She added Australian systems only allowed people to be either “on or off”.
“In Australia, there isn’t a lot of room for return to employment. Sometimes a person may be willing to return to work but not capable of doing so at full capacity. But they’re better off staying at home and claiming full insurance than going back to work partially because that way they lose their payments,” she said.
Professor Koczwara, who was not involved in the study, also said it was important to not only consider medical ways to assist cancer patients returning to work.
Miss Bates said employers could work with the cancer survivor and their medical professionals to “enable returning to work within their capabilities”.
Director of the Australian Healthy Policy Collaboration at Victoria University, Rosemary Calder, said it would be useful to explore how cancers that shared common risk factors with preventable chronic diseases contributed to the productivity impact.
“Given what we know about the shared risk factors for some cancers and other chronic diseases, if we invested in prevention of these risk factors, we potentially could reduce the productivity impact of cancers related to those risk factors,” she said.
The researchers analysed data from the 2015 Australian Bureau of Statistics Survey of Disability, Ageing and Carers according to education, health condition, and employment status.
The study was limited by its inability to differentiate the rates of workforce participation of those currently undergoing treatment compared to those in remission.
This article has been updated to include other long-term health conditions that affected return to work, and clarify that the estimated loss of productivity due to cancer compared to direct medical costs was from a previous report.
A Senate inquiry has recommended that trials of the Cashless Debit Card be continued and expanded to new sites in other states next year. This is despite Labor and Greens senators providing separate dissenting reports that rejected the recommendation that legislation for the bill should pass.
The majority report’s proposal dramatically contrasts with most of the submissions accepted by the inquiry raising significant concerns and arguing against the trials. These submissions outline a variety of serious issues that have been largely overlooked.
What is the card?
The trials for the Cashless Debit Card began in early 2016 in Ceduna, South Australia, and the East Kimberley in Western Australia.
The card quarantines 80% of social security payments received by all working-age people (between the ages of 15 and 64) in the trial sites. It attempts to restrict cash and purchases of alcohol, illegal drugs and gambling products.
The card compulsorily includes people receiving disability, parenting, carers, unemployed and youth allowance payments. People on the aged pension, on a veteran’s payment or earning a wage are not compulsorily included in the trial, but can volunteer to take part.
The trial of the card has increased hardship in people’s lives. This is not only because of the experiment’s disorganised and ill-conceived implementation, but also due to the trial’s design.
People are being compulsory included because there is an assumption that they engage in problematic behaviours, such as the over-consumption of alcohol, gambling, or the use of illegal drugs. But this is not the reality for most people.
Being put on the card has made people’s lives harder because limiting cash restricts people’s ability to undertake day-to-day activities to help their family’s wellbeing. This includes getting second-hand goods, paying for transport, and buying gifts.
This hardship is reflected in the final evaluation of the trial, in which 32% said their lives were worse since being on the card (only 23% said their lives were better).
Further, 48% of participants reported that the card does not help them look after their children better. This is concerning, as recently completed research into income management programs indicates a correlation with negative impacts on children – including a reduction in birth weight and school attendance.
Getting the assumptions wrong has pushed already vulnerable people into even more vulnerable situations. Medical specialists have raised concerns with the card being used to treat addiction.
Both crime and domestic assaults increased under the card in the East Kimberley. Superintendent Adams of the Kimberley Police District told the Senate inquiry that in the 12 months to June 30, 2016, there were 319 domestic assaults in Kununurra, but in the 12 months to June 30, 2017 (and the time of the trial), this figure had increased to 508.
The government used both the interim and final evaluations as key evidence to justify extending the trials.
Both evaluations have been severely criticised as being methodologically and analytically flawed: from the way interviews were conducted, to having no baseline to test government claims of success, through to an over-emphasis on anecdotal improvements and discarding important issues such as the increase in crime and domestic violence.
The decision to implement the card was not a community decision that represents the regions’ diverse interests or population. And some have had more say than others.
For example, the Miriuwung Gajerrong Corporation noted that, although the:
… Department of Social Services states that the Cashless Debit Card program was co-designed with local leaders in Kununurra … in reality, only four local leaders were consulted in relation to the introduction of the [card] in Kununurra.
In a perverse twist, the only way people can get themselves off the trial is to get a job. Yet in both Ceduna and the East Kimberley, the biggest cause of unemployment is the lack of formal, dignified and secure jobs. Linking to unemployment, some people included in the trial are also subjected to the punitive Community Development Program. This compounds poverty, as the program’s nature induces high breaching rates.
Even if a few support the card, many more have suffered material and emotional hardship. The community has been fractured through such heavy-handed intervention. And the A$25 million spent on it has demonstrated no credible evidence of sufficient benefit to justify an ongoing rollout.
That the card continues to be pursued by government exposes its dogged obsession with implementing neocolonial and punitive policy for some imagined political gain at the expense of vulnerable people.
The author would like to thank professor Jon Altman and Sarouche Razi for comments on earlier drafts.
The link below is to an article that should have Aussies seeing red – we are paying up to 50% more than we should be for IT products, which is of little real surprise to most of us. Right across the board we have been paying more and there seems to be no real reason for it to be so other than the greed of big business.
Should the threat to traditional media from the internet really be a cause for concern?
The new social media — blogging, Facebook, MySpace, Twitter, and YouTube are current faves — revolutionising the publishing world, for better and worse. Let’s look at both the better and the worse in perspective.
The current tsunami of personal choices in communication is slowly draining the profit from mainstream media. These media traditionally depend on huge audiences who all live in one region and mostly want the same things (the football scores, the crossword, the TV Guide, etc.). But that is all available now on the Internet, all around the world, all the time.
One outcome is a death watch on many newspapers, including famous ones like the Boston Globe. As journalist Paul Gillin noted recently: “The newspaper model scales up very well, but it scales down very badly. It costs a newspaper nearly as much to deliver 25,000 copies as it does to deliver 50,000 copies. Readership has been in decline for 30 years and the decline shows no signs of abating. Meanwhile, new competition has sprung up online with a vastly superior cost structure and an interactive format that appeals to the new generation of readers.”
Traditional electronic media are not doing any better. As James Lewin observes in “Television audience plummeting as viewers move online” (May 19, 2008), mainstream broadcasters “will have to come to terms with YouTube, video podcasts and other Internet media or they’ll face the same fate as newspapers.”
Radio audiences have likewise tanked. Overall, the recent decline of traditional media is remarkable.
Some conservative writers insist that mainstream media’s failure is due to its liberal bias. But conservatives have charged that for decades — to no effect. Another charge is that TV is declining because it is increasingly gross or trivial. True enough, but TV’s popularity was unaffected for decades by its experiments with edgy taste.
Let’s look more closely at the structure of the system to better understand current steep declines. Due to the low cost of modern media technology, no clear distinction now exists between a mainstream medium and a non-mainstream one, based on either number of viewers or production cost. Today, anyone can put up a video at YouTube at virtually no cost. Popular videos get hundreds of thousands of views. Podcasting and videocasting are also cheap. A blog can be started for free, within minutes, at Blogger. It may get 10 viewers or 10,000, depending on the level of popular interest. But the viewers control that, not the providers.
The key change is that the traditional media professional is no longer a gatekeeper who can systematically admit or deny information. Consumers program their own print, TV, or radio, and download what they want to their personal devices. They are their own editors, their own filmmakers, their own disc jockeys.
Does that mean more bias or less? It’s hard to say, given that consumers now manage their own level of bias. So they can hear much more biased news — or much less. And, as Podcasting News observes, “Social media is a global phenomenon happening in all markets regardless of wider economic, social and cultural development.”
Understandably, traditional media professionals, alarmed by these developments, have constructed a doctrine of “localism” and, in some cases, called for government to bail them out. That probably won’t help, just as it wouldn’t have helped if the media professionals had called for a government “bailed out” of newspapers when they were threatened by radio, or of radio when it was threatened by TV. Video really did (sort of) kill the radio star, but the radio star certainly won’t be revived by government grants.
Still, the news is not all bad. Yes, new media do sometimes kill old media. For example, no one seriously uses pigeon post to send messages today. But few ever thought birdmail was a great system, just the only one available at the time. However, radio did not kill print, and TV did not kill radio. Nor will the Internet kill older media; it will simply change news delivery. Sometimes in a minor way, but sometimes radically.
Media that work, whether radio, TV, newspapers, books, blogs, or any other, thrive when there is a true need. Today’s challenge is to persuade the consumer to look at alternatives to their own programming decisions.
Denyse O’Leary is co-author of The Spiritual Brain.