Daily Archives: December 27, 2009

The struggle over values in the online news world

Posted on December 27, 2009 | 1 Comment

Week of December 21, 2009

The toughest challenges facing the news business may have more to do with values than finances.
There’s reason for optimism about its economic future. The appetite for fact-based reporting and topical commentary is keener than ever, and the number of people with the skill and desire to feed it is greater than ever. Demand is high, supply is high, the economic fundamentals are solid.
Even the business uncertainties causing so much heartache right now—how this new news industry will pay its bills—is solvable. It won’t be tidy and it won’t be tomorrow, but some layered blend will emerge of direct payment and subsidy via advertising, NPR-type fundraising, profit-making spinoffs, offline activities, and sweat equity from pro-am journalists working on the cheap.
News will survive. Whether it’ll be good and whether it’ll do good—that’s what the public should worry about.
Now, you hear a lot of wailing about the sunny age of journalistic excellence that is supposed to be rapidly setting. Some of that is the familiar, “the older we get, the better we were” nostalgia. True, the children of Watergate—and I was one—had their brave and brilliant moments, and as a result some things changed for the better.
But while post-‘60s media venerated Watergate, they didn’t really emulate it. The wide-angle view is less complimentary: a newspaper industry of chain-owned monopolies that flattered the powers-that-be, milked their advertisers dry and muscled the local competition into submission; conglomerate-run TV networks allowed to grossly under-serve the world’s most powerful democracy with 22 minutes of national news a day; unimaginably profitable local TV affiliates whose journalistic imagination was confined to shootings and car crashes; local radio that gave up news altogether.
By the end of the George W. Bush years, the country’s best journalism wasn’t in the news media, but in books.
So today’s Internet upstarts are right to be skeptical of the generation that’s now cleaning out its desk in newsrooms throughout the country. We didn’t always uphold core precepts of honest journalism against the pressures of market, ambition and expediency. There was arrogance, deference to authority, reliance on formula, and over time, a craven wish to avoid offending.
But there are disquieting signs that the new newsfolks—including the online operations of legacy media—are falling victim to new pressures. For all their repudiation of the old mistakes, they may be succumbing to new ones.

Practitioners congratulate themselves on the medium’s power, mindful that online scoops can indeed rattle the right cages, but they don’t want to accept the truth that this power includes the capacity to do harm.
Take the idea that it’s right to post information nobody’s really tried to verify. Post what you have, fix it as better information comes to light—that’s the new creed. The notion that some threshold of veracity needs to be met before you publish is some quaint relic, as one news blogger put it, “Journalism 101, not Journalism 2010.”
But falsehoods hurt people, and while corrections can mitigate that, they don’t undo it. Why should online news sites ignore the basic injunction to avoid doing unnecessary harm? Shouldn’t there be a good reason to go public with unverified information, some imminent peril, a tornado possibly heading your way?
How about posting damaging allegations without seeking a response from the people being defamed? Why doesn’t basic fairness still require giving the person a reasonable shot to be heard now, not later, when there is no assurance the denial will catch up to the accusation?
Online news has brought fresh concerns with such values as transparency and humility along with a vast new willingness to listen and allow others to speak. But in other respects, instead of righting the wrongs of the legacy news world, the 24/7 cycle risks deepening them and intensifying their potential to misinform and to harm. No, don’t blame the technology; there’s nothing about digital media that prohibits care, respectfulness, scrupulous handling of information, fairness—basic principles of journalistic professionalism.
The damage isn’t done by the new tools, but by the old villain of market calculation, the belief that haste pays, that racy and sensational disclosures drive traffic and now, if they’re incorrect or one-sided, actually increase interactivity. Getting it first trumps getting it right.
Funny, that’s something the corrupt old press barons believed too.
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A news business with a future after all

Posted on December 27, 2009 | Leave a comment

Week of Dec. 7, 2009

Because I don’t have enough misery in my life, I decided last week to see how much I could take of the two-day Federal Trade Commission symposium in Washington with the somber title, “How will journalism survive the Internet Age?” The media circuit offers a generous number of such open-casket affairs, but the turnout for this one looked stellar, so I settled down at my desktop and clicked in to the video feed, ready for the wailing to begin.
And it wasn’t like that at all. On the contrary, although the 70-some journalists, academics, analysts, financiers, flacks and entrepreneurs didn’t agree on much, they had in common a quality of thought and depth of commitment that couldn’t fail to impress.
Headliners included Rupert Murdoch, multinational news mogul; Arianna Huffington, online diva; Leonard Downie, ex-editorial chief of the Washington Post; Jeff Jarvis, prophet of entrepreneurial journalism; Paul Steiger, head of Pro Publica, the investigative reporting startup; Steven Brill, who’s about to launch an innovative payment system; Robert Picard, an eminent media economist, and Josh Marshall, whose Talking Points Memo is one of the rare online news sites that’s both solid and solvent.
To be sure, there was the familiar litany of woes that have pushed the legacy news industry down a steep slope toward financial ruin and civic obsolescence: its ravaged advertising base, reader melt, staff and coverage cutbacks, extravagant acquisitions that crippled profitable operations with debt, a ready availability of free online alternatives.
Still, there was recognition that the winds of change that are blowing their roofs off are, to a great degree, modernizing ones. Those cloudless days of bottomless profitability were the product of industrial privilege that nobody would applaud as socially optimal: Traditional newspapers and local TV network affiliates owed their larcenous profit margins—and their teeming newsrooms—to the monopolies and near-monopolies they wielded, and to the reality that their audiences, and their advertisers, were starved of choice.
Suddenly, thanks to the Internet and the explosion of digital technologies, barriers to entry have been leveled and distribution costs slashed to zero. Anyone with a laptop and a WiFi has instantaneous access to more information than the entire Washington Post newsroom back when Nixon was facing impeachment—and can reach a vastly larger audience too.
The upshot: As one speaker noted, all those enormous fixed costs (printing presses, delivery fleets, broadcast transmitters) that once kept rivals out of the water are now, for legacy news organizations, little more than an anchor around their neck.
So now what? Paradoxically, the person at the workshop with the greatest business success in the online world was also the one with the most conventional answers. That was Rupert Murdoch, chief of News Corp., whose Wall Street Journal online operation has more than a million paying subscribers. His solutions: Invest in journalism, then invest some more; charge readers what your content is worth; keep government at bay (that, a rebuke to calls for media-friendly changes in tax laws and antitrust rules.)
And move aggressively against those who help themselves to your content, the reviled news aggregators. By that he meant both the mammoth search engines like Google and Yahoo and the purpose-built news sites that post digests and steer readers to where the news originated, such as his papers. What the aggregators do, he says, is “theft.”
This is key. Contemporary thinking about the future of journalism divides fundamentally over the question of whether online news is, or can be, owned and sold. And I’ve come to conclude that although in some cases it can—when the information is unique, time-bound or especially valuable—the overall reality is that technology has kicked down the door of the proprietary model. News will be publicly available, either in original or derivative forms, even to a public that doesn’t pay for it.
As Arianna Huffington, whose Huffpost.com relies on unpaid contributors, put it, “Free content is not without problems. But it’s here to stay, and publishers need to come to terms with that…”
And that, it seemed clear, is where the fun starts in the new news industry—in coming up with allied informational offshoots that are worth top dollar (ask newsletter publishers); in building fresh sources of cross-subsidy by creating affiliated profit centers to replace ad revenues which, even with robust online growth, will never match the treasures of the lost kingdom; in collaborating with the emerging generation of journalism irregulars who hunger to carry on traditions of civic engagement through public reporting and commentary.
So it wasn’t quite the funeral I expected.
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Giant media poised for a growth spurt

Posted on December 27, 2009 | Leave a comment

Week of Nov. 23, 2009

“Big media today wants to own the faucet, pipeline, water, and the reservoir. The rain clouds come next.”

So wrote Ted Turner, the media entrepreneur who sold off CNN and the rest of Turner Broadcasting to Time Warner in 1996, in a remarkable Washington Monthly article five years ago that remains as compelling a case against media consolidation as you’ll find anywhere.

Turner was exaggerating a little when he described the unending, predatory longing of industry players to drag more and more media operations under a single roof. Exaggerating a little, but not much.

Vertical integration—owning the whole shebang, the entire media loop from script creation to program production, on to distribution channels, exhibition venues and syndicated re-runs, and nowadays on to DVDs, director’s cuts, re-releases and sequels, streaming video, cartoon spinoffs and action figures—has been the Holy Grail for as long as there has been a media business.

It’s why the great movie studios of the silver screen insisted on having their very own nationwide theater networks. (The government stopped that.)

It’s why the broadcast TV networks of the so-called golden age insisted on buying programs from companies they owned. (The government stopped that too for a while—and a fourth broadcast network, Fox, emerged thanks to the bumper crop of shows from newly emancipated producers.)

And vertical integration is why Comcast, the country’s biggest owner of cable systems, the company that decides which networks reach one of every four U.S. homes, is drooling over NBC Universal. The deal, if it happens, would be a staggering one.

NBCU, owned by General Electric (whoever decided that was a good idea?) is a powerhouse that comprises NBC—one of the storied Big Four broadcast networks—a major movie studio, theme parks, 13 cable networks—including USA, CNBC, Bravo, SyFy, MSNBC, CNBC, Oxygen, the Weather Channel—the No. 2 Spanish-language network, Telemundo, and 33 local TV stations.

NBCU, in short, is a mammoth content machine. And, Comcast, though chiefly an immensely rich operator of cable pipes, isn’t just the $34 billion-a-year utility whose bill you bellyache about every month. It too covets content. It tried to buy Disney in 2004, and it owns all or part of 20 cable networks, including E! Entertainment Television, Style, G-4, the Golf Channel and a bunch of national and regional sports channels.

And now it wants NBCU. One analyst estimated that combining the content arms of the two companies would bring roughly one-quarter of the country’s TV programming under a single owner. Another said the merged entity would control one of every five hours of programming. Who knows. Clearly, this would be big.

The usual objections to such deals have to do with the outsized economic clout the resulting colossus would wield. Scale emasculates market discipline. When you control access to 24 million homes, you aren’t ruled by prevailing prices, you set them. Recession? Comcast is squeezing $6 more per household now than it was a year ago, and its profits were up 22.5 percent last quarter.

Very nice, but when you own the programs too you can make sure your networks get delivered even when that means elbowing other producers aside. You can strong-arm your competitors—satellite companies, for instance—by threatening to withhold popular networks or forcing them to carry the dogs as well. You can cut deals with other distributors who want the shows they control flowing through your pipes. You get your way.

Naturally, you’ll resist innovation unless you control it. Comcast would get a 30 percent stake in Hulu, the upstart distributor of first-run Hollywood programming via the Internet—a huge potential threat to cable operators. Subscription cable is Comcast’s bread and butter, and a business that makes $944 million on quarterly revenue of $8.8 billion is some business. Comcast will make sure online’s future doesn’t endanger its own.

Sure, the government can demand conditions to keep some of the worst excesses from being realized. Comcast may agree to carry the programs of outsiders on roughly the same terms as its own, may have to shed some NBCU holdings.

But pigs don’t fly. The whole point of vertical integration is to secure unfair advantage, to unlevel the playing field. And besides, since when is avoiding the worst the best we can hope for? It has been longstanding public policy to encourage localism, diversity and competition in the media business. It’s time to dust off that policy and give it some teeth by blocking this ridiculous and dangerous deal.

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