Originally posted on Gigaom:
As the traditional media business continues to flounder, a number of people seem to think that Guardian investigative editor David Leigh has come up with a smart new idea for saving journalism and newspapers in particular — namely, a tax on internet service providers that would be used to finance the leading periodicals in Britain. The only problem with this plan is that it is neither smart nor particularly new: as others have noted, the same idea has been floated in the past as a way of saving the music industry, and thankfully never became reality. While Leigh’s proposal seems appealing at first, it suffers from a host of flaws — including the fact that it would likely fail to accomplish what its supporters want it to.
The impetus for this idea (which would levy a fee of two British pounds (about $3.20 US) on every internet account to create a government investment fund), is abundantly obvious: print-advertising revenue, which most general-interest papers rely on for the bulk of their income, has fallen off a rather large cliff over the past several years, and the rate of decline seems to be accelerating rather than slowing. Paywalls may be picking up some of the slack for a few providers, but they are not enough to fill the gap completely — and so companies are cutting back, and in the case of U.S. papers even shutting down print.