Newspapers used to have very geographically limited competition in advertising for things like apartment rentals, for-sale listings, and job listings. They also got a fair bit of national brand advertising, even after TV eclipsed them. The lack of competition enabled them to do things that don't make money -- like in-depth investigative journalism. A newspaper that contained only meaty investigative journalism could not cover its costs with advertising, even back in 1990.
This is similar to how today's high-margin advertising funded companies (e.g. Google, Facebook) can afford to pursue out-there projects with no prospect of making money in the short term. Investigative journalism was a vanity/halo product that usually didn't make money, funded by people overpaying to advertise in the newspaper.
In a case of perfect competition and low barriers to entry, newspapers have to prioritize minimally expensive content as a supporting scaffold for advertising. Newspapers are much closer to this "perfect competition" case now than they were in 1990. (A very few newspapers like the New York Times achieved "escape velocity" to reach a national audience on the strength of their reporting.) Likewise, if Google were up against a dozen other nearly-as-good search engines, neither it nor its competitors would have the luxurious cash surpluses for "moonshot" projects.
The golden ages of AT&T and IBM were also back when they enjoyed monopolistic pricing power. They could afford to do Nobel Prize winning research instead focusing slavishly on cost efficiency. They overcharged everyone, and a bit of that surplus money was reinvested in scientific research and product quality that was higher than what an equilibrated competitive market would converge on.
I wouldn't give AT&T a telephone monopoly again just to bring back Bell Telephone Laboratories. But certain kinds of positive externalities seem to emerge only from businesses enjoying fat margins and high pricing power. One of those positive externalities, in the case of newspapers in the 20th century, was deep reporting.
This is similar to how today's high-margin advertising funded companies (e.g. Google, Facebook) can afford to pursue out-there projects with no prospect of making money in the short term. Investigative journalism was a vanity/halo product that usually didn't make money, funded by people overpaying to advertise in the newspaper.
In a case of perfect competition and low barriers to entry, newspapers have to prioritize minimally expensive content as a supporting scaffold for advertising. Newspapers are much closer to this "perfect competition" case now than they were in 1990. (A very few newspapers like the New York Times achieved "escape velocity" to reach a national audience on the strength of their reporting.) Likewise, if Google were up against a dozen other nearly-as-good search engines, neither it nor its competitors would have the luxurious cash surpluses for "moonshot" projects.
The golden ages of AT&T and IBM were also back when they enjoyed monopolistic pricing power. They could afford to do Nobel Prize winning research instead focusing slavishly on cost efficiency. They overcharged everyone, and a bit of that surplus money was reinvested in scientific research and product quality that was higher than what an equilibrated competitive market would converge on.
I wouldn't give AT&T a telephone monopoly again just to bring back Bell Telephone Laboratories. But certain kinds of positive externalities seem to emerge only from businesses enjoying fat margins and high pricing power. One of those positive externalities, in the case of newspapers in the 20th century, was deep reporting.