Revolutionizing the Media
By Otto Scott
The world marvels at the sweep and power of our media: their ability to make and unmake celebrities, promote politicians and programs, alter traditions and usher innovations. journalists in many regions, harassed by their governments, hindered by strict laws of libel and accountability, censored and supervised, look at American journalists and commentators with awe.
Never, it seems, has any society been so lavishly served with information by so many free-wheeling vehicles, operated by so many facile, talented individuals. TV places Ted Koppel in position to interview, before an audience of multimillions, the prime minister of beleaguered South Africa and his tormentor Bishop Tutu alike. Our cameramen were in Beijing to film young Chinese imitating an American political demonstration; our sitcoms misrepresent the American people to the globe.
Visitors to the United States find the presence of our "communications" nearly inescapable. They hear echoes of the media in every conversation, the presence of TV and/or radio sets in every hotel room, newspapers under almost every hotel door, magazines and paperbacks in every hotel shop, airport, almost every store - all accompanied by a cacophony of sound at almost every turn, in almost every public and/or private setting.
Private and individual thought has been inundated, on almost every level, by our giant communications industry: our 1,675 daily newspapers, our nearly 1,000 general-purpose TV stations and 300 "educational" stations, our 90 million TV homes, our thousands of magazines with their millions of readers, the gargantuan advertising sums spent by our corporations, the huge salaries paid to our anchormen and women, the immense profits of the communications giants.
Yet hardly anyone outside the ranks of professional media managers and tax experts seems to realize that our immense - and immensely important - media are, at base, the result of a single favorable tax ruling by the U.S. Treasury. Our entire media giant rests upon a single, slender ruling. A stroke of a bureaucrat's pen could shrink the media overnight, alter its attitudes, change its positions, lower its voices and its presence - and restore media control to the American people.
The specific origins of this tax ruling appear to be lost in the mists of time. The Public Affairs division of the I.R.S. in Washington told me that at present, the Tax Code allows advertising to be expensed as a necessary cost of doing business under Section 162 as revised in 1954, and that an expensive legal search would be necessary to trace the specific origins of this decision.
My father, however, recalled that the Treasury decision was taken shortly after World War I, when American corporations which had been forced into war (in that war Washington did not wait for volunteers), and which resumed the peacetime manufacture of domestic products, complained that their brand names had been forgotten by the marketplace. Advertising, they argued, was an expense virtually forced upon them and which therefore should be free from taxation. Treasury agreed, and the entire great pyramid we know today, from CBS's Dan Rather to Woodward of the Washington Post - to go from the ridiculous to the ridiculous - is the result.
Without that ruling, Madison Avenue's advertising agencies would discover that diverting corporate advertising monies into anti-American, anti-business channels would be unwise, because most Americans favor this nation and its private sector.
Publications would no longer be able to sell newspapers and magazines at prices below their costs, while reaping large profits from advertisers. Both the print and electronic media would see advertising revenues plummet, for "image" advertising would hardly be worthwhile if it could not be expensed. Product advertising would, of course, continue - but at a smaller rate.
At present, newsletters exist only on the basis of revenues obtained from readers. Their subscription rates are based upon their production and mail costs, and are, correspondingly, much higher than magazines and newspapers that charge only fractions of their costs to readers because they can extract immense revenues from their advertisers. (Readers of this publication are among the most favored, since only voluntary donations are requested.)
The discrepancies between the immense numbers claimed by many national publications today and what their circulations would become if advertising were no longer expensed would mean that the cost of all publications would immediately soar. Many would be quickly seen as redundant. How many, for instance, would pay five or more dollars per copy to read what the editors of weekly "news" magazines considered worth summarizing from the daily press at each week's end?
If this is true regarding some of our larger publications, what would happen to some of our smaller, or in-between ones? Many would vanish, to the general improvement of the nation.
What would be true of the print media would become equally true for TV/radio stations. At present the networks deny advertisers the right to choose the programs in which their ads appear (with the exceptions of "specials"). They sell time slots. The advertiser can choose bands of time, at accompanying rates, but not programs. But if the advertisers are forced to spend moneys that directly reduce net profits, it is doubtful that they would continue to accept such arrogance. The networks, with diminished revenues, would no longer be able to afford to subsidize "independent" program productions (a smelly collection of interlocks and kickbacks that badly needs investigation), but would have to purchase programs, based on genuine audience appeal, competitively created.
In Britain and Europe, generally, advertising is ruled out of order on the public airwaves. Governments charge TV owners an annual license fee, and maintain governmentally funded channels. I can vouch for the fact that the absence of advertising provides blissful relief from incessant interruptions, but I can also attest that the governmental channels abroad, as at home, are almost exclusively managed by the liberal-left, with its bias in the name of anti-bias.
If the American media were stripped of their tax privilege - a privilege of which many writers, commentators, editors, program directors and even advertising executives seem blissfully ignorant, an entire cascade of changes would flow through this land.
The first changes would be economic. Dollars now controlled by left-leaning ad agencies would shrivel to a trickle, and thousands of artists, copywriters and account executives would have to find other jobs in other sectors. The advertising industry as we know it would not vanish, but would be greatly curtailed. Its practitioners would, like their distant predecessors, have to actually produce ads that brought traceable sales improvements to their clients, or close shop.
Advertising would revert to a marketing arm of sales, instead of the support of a semi-propaganda sector.
Periodicals would find their audiences both diminished and much more cautious about subscribing. That would bring about an editorial revolution, because editors would have to pay attention to the opinions of their readers, and not rely upon Madison Avenue to keep them alive with captive corporate dollars, irrespective of anti-business, anti-American editorial positions.
The Christian community - largest in the land - would discover that its views would be aired, because no publication could afford to openly flout the views of the majority audience if it could no longer afford to inflate its circulation by virtual giveaways. Of course, as the Iliad says repeatedly, "The fool only believes what has happened." The economic consequences of changing the status of advertising from an accepted and necessary business expense to an ordinary investment in the marketplace would have an immediate, if short range, impact upon employment and advertising subsidiaries such as printing, distribution, retailing, paper, ink, electronics and the entire media pyramid. It might be argued that such a change in the Tax Code would be economically disruptive, retrograde and unnecessary. The very suggestion will undoubtedly shock those who have claimed authority over change - and who insist that only changes in liberal-left directions are to be allowed.
But at present the tax ruling, originally intended to help manufacturers overcome a disadvantage occurred as a result of wartime service, has opened the gates to an intellectual and political nightmare. It is not advertising that is at fault in this situation, but the fact that advertising has enabled the growth of a false media - a media that prospers while misleading and misrepresenting this nation and its people; a media that is against the presidents we elect; a media that is against the Christian community, which is the largest in the land; a media that supports our enemies abroad and at home; a media that is intellectually disloyal; a media that is feared and resented; that violates common decency and the right to privacy; a media that uses freedom of expression to keep secrets from the people while denying the right of the government to keep secrets from our enemies; a media that is an artificial creation that plays a very real and destructive role in our political process, that destroys people and institutions by rumor and misrepresentation, that orates about freedom of expression while denying it to the majority of Americans.
The communications monster sits, like a nightmarish inverted pyramid, atop a tiny, slender Treasury ruling. To remove that ruling would bring down a monster that has usurped the voice of the people and replaced it with its own, that has created an intellectual depression that shadows the land.
To fail to withdraw the privilege that has created this monster means that we shall, as a nation and a people, continue to be misrepresented to ourselves and the world, by a media elite that is dividing and destroying us. To say that they control thousands of outlets and millions of pages of arguments and that this represents our collective wishes and wisdom is to repeat the plea of the lemming that everybody is doing it.
The world marvels at the sweep and power of our media: their ability to make and unmake celebrities, promote politicians and programs, alter traditions and usher innovations. journalists in many regions, harassed by their governments, hindered by strict laws of libel and accountability, censored and supervised, look at American journalists and commentators with awe.
Never, it seems, has any society been so lavishly served with information by so many free-wheeling vehicles, operated by so many facile, talented individuals. TV places Ted Koppel in position to interview, before an audience of multimillions, the prime minister of beleaguered South Africa and his tormentor Bishop Tutu alike. Our cameramen were in Beijing to film young Chinese imitating an American political demonstration; our sitcoms misrepresent the American people to the globe.
Visitors to the United States find the presence of our "communications" nearly inescapable. They hear echoes of the media in every conversation, the presence of TV and/or radio sets in every hotel room, newspapers under almost every hotel door, magazines and paperbacks in every hotel shop, airport, almost every store - all accompanied by a cacophony of sound at almost every turn, in almost every public and/or private setting.
Private and individual thought has been inundated, on almost every level, by our giant communications industry: our 1,675 daily newspapers, our nearly 1,000 general-purpose TV stations and 300 "educational" stations, our 90 million TV homes, our thousands of magazines with their millions of readers, the gargantuan advertising sums spent by our corporations, the huge salaries paid to our anchormen and women, the immense profits of the communications giants.
Yet hardly anyone outside the ranks of professional media managers and tax experts seems to realize that our immense - and immensely important - media are, at base, the result of a single favorable tax ruling by the U.S. Treasury. Our entire media giant rests upon a single, slender ruling. A stroke of a bureaucrat's pen could shrink the media overnight, alter its attitudes, change its positions, lower its voices and its presence - and restore media control to the American people.
The specific origins of this tax ruling appear to be lost in the mists of time. The Public Affairs division of the I.R.S. in Washington told me that at present, the Tax Code allows advertising to be expensed as a necessary cost of doing business under Section 162 as revised in 1954, and that an expensive legal search would be necessary to trace the specific origins of this decision.
My father, however, recalled that the Treasury decision was taken shortly after World War I, when American corporations which had been forced into war (in that war Washington did not wait for volunteers), and which resumed the peacetime manufacture of domestic products, complained that their brand names had been forgotten by the marketplace. Advertising, they argued, was an expense virtually forced upon them and which therefore should be free from taxation. Treasury agreed, and the entire great pyramid we know today, from CBS's Dan Rather to Woodward of the Washington Post - to go from the ridiculous to the ridiculous - is the result.
Without that ruling, Madison Avenue's advertising agencies would discover that diverting corporate advertising monies into anti-American, anti-business channels would be unwise, because most Americans favor this nation and its private sector.
Publications would no longer be able to sell newspapers and magazines at prices below their costs, while reaping large profits from advertisers. Both the print and electronic media would see advertising revenues plummet, for "image" advertising would hardly be worthwhile if it could not be expensed. Product advertising would, of course, continue - but at a smaller rate.
At present, newsletters exist only on the basis of revenues obtained from readers. Their subscription rates are based upon their production and mail costs, and are, correspondingly, much higher than magazines and newspapers that charge only fractions of their costs to readers because they can extract immense revenues from their advertisers. (Readers of this publication are among the most favored, since only voluntary donations are requested.)
The discrepancies between the immense numbers claimed by many national publications today and what their circulations would become if advertising were no longer expensed would mean that the cost of all publications would immediately soar. Many would be quickly seen as redundant. How many, for instance, would pay five or more dollars per copy to read what the editors of weekly "news" magazines considered worth summarizing from the daily press at each week's end?
If this is true regarding some of our larger publications, what would happen to some of our smaller, or in-between ones? Many would vanish, to the general improvement of the nation.
What would be true of the print media would become equally true for TV/radio stations. At present the networks deny advertisers the right to choose the programs in which their ads appear (with the exceptions of "specials"). They sell time slots. The advertiser can choose bands of time, at accompanying rates, but not programs. But if the advertisers are forced to spend moneys that directly reduce net profits, it is doubtful that they would continue to accept such arrogance. The networks, with diminished revenues, would no longer be able to afford to subsidize "independent" program productions (a smelly collection of interlocks and kickbacks that badly needs investigation), but would have to purchase programs, based on genuine audience appeal, competitively created.
In Britain and Europe, generally, advertising is ruled out of order on the public airwaves. Governments charge TV owners an annual license fee, and maintain governmentally funded channels. I can vouch for the fact that the absence of advertising provides blissful relief from incessant interruptions, but I can also attest that the governmental channels abroad, as at home, are almost exclusively managed by the liberal-left, with its bias in the name of anti-bias.
If the American media were stripped of their tax privilege - a privilege of which many writers, commentators, editors, program directors and even advertising executives seem blissfully ignorant, an entire cascade of changes would flow through this land.
The first changes would be economic. Dollars now controlled by left-leaning ad agencies would shrivel to a trickle, and thousands of artists, copywriters and account executives would have to find other jobs in other sectors. The advertising industry as we know it would not vanish, but would be greatly curtailed. Its practitioners would, like their distant predecessors, have to actually produce ads that brought traceable sales improvements to their clients, or close shop.
Advertising would revert to a marketing arm of sales, instead of the support of a semi-propaganda sector.
Periodicals would find their audiences both diminished and much more cautious about subscribing. That would bring about an editorial revolution, because editors would have to pay attention to the opinions of their readers, and not rely upon Madison Avenue to keep them alive with captive corporate dollars, irrespective of anti-business, anti-American editorial positions.
The Christian community - largest in the land - would discover that its views would be aired, because no publication could afford to openly flout the views of the majority audience if it could no longer afford to inflate its circulation by virtual giveaways. Of course, as the Iliad says repeatedly, "The fool only believes what has happened." The economic consequences of changing the status of advertising from an accepted and necessary business expense to an ordinary investment in the marketplace would have an immediate, if short range, impact upon employment and advertising subsidiaries such as printing, distribution, retailing, paper, ink, electronics and the entire media pyramid. It might be argued that such a change in the Tax Code would be economically disruptive, retrograde and unnecessary. The very suggestion will undoubtedly shock those who have claimed authority over change - and who insist that only changes in liberal-left directions are to be allowed.
But at present the tax ruling, originally intended to help manufacturers overcome a disadvantage occurred as a result of wartime service, has opened the gates to an intellectual and political nightmare. It is not advertising that is at fault in this situation, but the fact that advertising has enabled the growth of a false media - a media that prospers while misleading and misrepresenting this nation and its people; a media that is against the presidents we elect; a media that is against the Christian community, which is the largest in the land; a media that supports our enemies abroad and at home; a media that is intellectually disloyal; a media that is feared and resented; that violates common decency and the right to privacy; a media that uses freedom of expression to keep secrets from the people while denying the right of the government to keep secrets from our enemies; a media that is an artificial creation that plays a very real and destructive role in our political process, that destroys people and institutions by rumor and misrepresentation, that orates about freedom of expression while denying it to the majority of Americans.
The communications monster sits, like a nightmarish inverted pyramid, atop a tiny, slender Treasury ruling. To remove that ruling would bring down a monster that has usurped the voice of the people and replaced it with its own, that has created an intellectual depression that shadows the land.
To fail to withdraw the privilege that has created this monster means that we shall, as a nation and a people, continue to be misrepresented to ourselves and the world, by a media elite that is dividing and destroying us. To say that they control thousands of outlets and millions of pages of arguments and that this represents our collective wishes and wisdom is to repeat the plea of the lemming that everybody is doing it.
