Could The "News of the World" Scandal Spell the End of the News Media As We Know it?

The British tabloid "News of the World" was recently shuttered due to a phone and voicemail hacking scandal. As of today, it is hard to tell exactly how high up the corporate ladder the scandal goes, but the FBI did announce today that they would be investigating a similar case involving News Corp and the families of 9/11 victims.

Depending on how all of this pans out, we may very well see some of America's biggest news networks radically changed, if not shutdown. However, it is not all doom and gloom. As I see it, this could present a unique opportunity to reinvent the way news is broadcast and paid for in America. Allow me to elaborate:

Since its conception in 1986, the Fox News Network has changed the face of news. Rupert Murdoch's News Corp has been credited with creating the "echo chamber" style news network. Say what you will about Fox, but it has the highest ratings of any news channel in America. Although the creation of Fox was largely in response to a void of mainstream conservative news outlets, it is now a titan of industry, making nothing short of a killing from advertisement revenues. However, if News Corp faces indictment over the alleged 9/11 phone hackings, this behemoth may come crashing down.

This (hypothetical) situation does pose an interesting question: what are the consequences of a publicly traded news company? As we know, a publicly traded company is LEGALLY REQUIRED to act in the interest of the shareholders. In other words, the company is required to keep profits as high as possible. When it comes to news and journalism, should our country's citizenry be trusting ANY public company with reporting the truth and what needs to be reported? This is especially thought provoking when looking at the News Corp model: keep viewership high by being provocative and tailoring stories to the preference of the audience. This has been a very successful model in the eyes of the shareholders; the stock of News Corp (NWS) has risen 500% since going public in the 80's.

But the question is, were the hackings in England (and possibly America) fueled by a need, whether spoken or not, to fulfill the company's obligations to the shareholders? While that direct link may be a stretch, it is clear that nearly ALL broadcasting companies are guilty of inflating provocative stories, misrepresenting crises abroad (such as the Euro-Zone trouble and the "Arab Spring") and marketing to a targeted demographic.

In any event, there may soon be an opportunity for the news media landscape to be radically transformed. If that day comes, I hope those in charge can find feasible model upon which to build their business, that puts honest, insightful, and public serving reporting above profit taking.