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March 10 2011

17:00

“Journalists have lost control of the story”: Twitter, tech bubbles, and the nostalgia of the technology press

Editor’s Note: I’m very happy to welcome Tim Carmody — who you may know from Snarkmarket, kottke.org, Wired.com, Twitter, or elsewhere — as a contributor to the Lab. Here he looks at how the increasing speed of media opens us to manipulation — and false nostalgia.

There’s nothing new about speculation bubbles, especially in the technology industry. It’s nearly impossible to be certain which new ideas or products will be able to do what they’re supposed to be able to — let alone whether they’ll be able to do so at cost or scale, if they’ll be adopted by the market, or if a competitor will get there first and better. And when everything’s happening quickly and everything seems exciting, it’s nearly impossible to tell a bubble from a real boom.

The only sure strategy for an investor or inventor is to get in early, push the company as hard as you can to attract attention and investment, and try to sell high, neither too late or too soon. When the economics of money and attention move too far past the economics of the underlying value, you get a bubble. When the money and attention slow, then stop, then rush in the opposite direction, the bubble bursts. The boom is over, if it ever existed at all.

There’s also nothing new about the press’s role in helping to inflate bubbles, worrying over them, and watching them burst. What is new, according to Federated Media’s John Battelle and Thomson Reuters’ Connie Loizos, is how the accelerated news cycle of blogs, Twitter, and other digital media forces the technology press to work at the same speed as the investors they cover — with the same worries about getting in early and beating competitors trumping the real value of the product. In this case, though, the product is their own journalism.

“For several years now,” writes Loizos, “savvy investors have been effectively gaming Twitter and mastering the ability to trumpet their investments in 140-word sound bites.” The credibility (in both senses) of the technology press, when mixed with Twitter’s easy ability to quickly pass on information without comment, gives those trumpet bursts an amplifier. “Journalists have lost control of the story. In rushing to retweet the latest auction results from SharesPost, we’re not thinking about what we’re writing or questioning what we’ve been told.”

Loizos elaborated on her argument in an email. “Thanks to Twitter and, to a lesser extent, other social media like Quora, information about startups and financings has become much more porous,” spreading good and bad information equally quickly, and in volume. “The first story out wins. For example, that first ‘scoop’ is what gets the most real estate by powerful aggregators like Techmeme, while every other story gets scuttled underneath it.” It also changes the relationship between a reporter’s sources and her audience. “[Now] we’re not just competing against one another as journalists but also against savvy investors and entrepreneurs who know they can reach just as broad an audience by delivering their news themselves via Twitter and their blogs.”

Loizos is a veteran of the last tech valuation boom and bust, reporting for the first-generation tech magazine The Industry Standard, founded by Battelle. Battelle’s Federated Media has since gone on to partner with a who’s who of current tech culture and business sites, from Boing Boing and TechCrunch to Business Insider and GigaOm. He sees a problem too, possibly bigger than VCs driving their investments.

The real bubble, or at least the more troubling one, is the “Internet interest bubble.” Here the press is not peripheral but central to the story.

In the new media landscape, “we have migrated to a more free-wheeling discourse driven by any number of interested parties,” Battelle writes. In addition to investors, we see “bankers trying to influence any number of outcomes, and sources within all manners of companies pushing their own agenda on Twitter, Quora, or in private conversations with bloggers and other media outlets…The tweets, conference utterances, and blog posts of these sources are instantly turned into ‘news stories’ by the post-cambrian publishing explosion of sites covering the narrative that was once the province of first-generation Internet magazines” like Battelle’s Standard.

Churnalism, in other words, is a much bigger problem than just press releases and wire stories. It’s everywhere — and creating an echo chamber unprecedented in its size and reach.

“Millions upon millions of people visit these tech news sites, because the narrative they chronicle is more important than it’s ever been,” Battelle writes. “Our industry impacts a huge swatch of society and culture, and increasingly is understood to be the core driver of pretty much all of business today.” And apart from contributing to a tech bubble, Battelle and Loizos think that the echo chamber crowds out better analysis and better stories in our news sources:

But where’s the bigger picture? Where’s the hold-on-a-minute-let’s-think-this-through-and make-a-few-phone-calls-and-see-how-it-develops approach? Where’s the conceptual scoop? The second-day (or even second week) analysis?

“There are stories about healthcare startups that are transforming lives that no one is reading,” Loizos told me. “I think behind-the-scenes profiles of employees who truly make Valley companies valuable are fascinating, but people don’t make time to write them because there’s still this unquenchable thirst for the same stories being written again and again: about the hottest new startup, the hottest new venture capital firm, the hottest new valuation, the hottest new application.” There’s also the comfort of the familiar: “in the tech universe, people could read about Twitter and Facebook” — or Apple and Google, etc. — “all day long and journalists — saddled with driving eyeballs — are giving them what they want.”

“It’s an exciting time, but it’s also pretty screwed up,” she adds.

Both Loizos and Battelle show some nostalgia for the tech coverage produced by magazines like the Standard in the 1990s — partly for the quality of the reporting or at least the relative sanity of print’s slower pace. But Owen Youngman, Knight Professor of Digital Media Strategy at Northwestern University’s Medill School of Journalism, is skeptical that things were any better a decade ago.

“In my memory,” Youngman told Loizos, “a lot of glossy magazines back then were by and for the same people that are running up valuations today, and they could make even the wispiest of ideas seemed substantial.” In an email, he added that “the nostalgia is more about the former number of high-gloss, high-profile, high-paying outlets for tech journalism, not necessarily for the journalism itself.”

In a recent article for The Atlantic, James Fallows voices a similar skepticism about our ability to accurately measure journalism’s present against its past.

“When I recently talked to people in the news business, historians, political scientists, and others about the current predicament of the news, every previous era looks innocent,” Fallows writes. Flux in journalism isn’t the exception, but the rule; and what seem to us like venerable staples like Time, Nightline, or NPR are both younger and were more radical than we typically remember. Ultimately, even that is the wrong question: “While it’s interesting and even useful to know whether today’s journalism marks a descent from past standards, what matters more is how it suits today’s needs.”

At the same time, even VCs themselves are balking at the speed of the market and how social media are disrupting their own practices. AngelList plays a similar role for investors and entrepreneurs that TechMeme plays for journalists and readers, using aggregation, filtering, and social media to manage the flow of information and create new opportunities for both. In “Why I Deleted My AngelList Account,” influential VC Bryce Roberts detailed how this approach conflicted with his own investment strategy and style:

At the earliest stages, it’s nearly impossible to pick the next Google so throw a lot of darts in the dark and hope you hit it. That high velocity, light touch style is certainly a viable approach to investing. It’s just not my style.

I tend towards a more concentrated approach to seed investing where we make fewer, larger, investments and take an active role in working with the companies we fund. Frankly, I just don’t buy the notion that making an investment is akin to throwing a dart in the dark. Worse, I think it’s a dangerous idea to promote…

Real or perceived, organic or manufactured, AngelList is in the business of generating heat. As I’ve said here and elsewhere, I tend to be interested in ideas and companies that most investors aren’t, so heat is generally a false signal for me.

Johnson’s post quickly drew a sharp response from Internet entrepreneur/provocateur Jason Calacanis. “Let’s be honest and just say what’s happening here: you’re pissed that you now have hundreds of angels swarming on deals that you used to be able to snap up at half the price…There are now *hundreds* of qualified and unqualified angels who are driven by sport and not return! They are betting with their own money — not some LP’s” — limited partners who invest in a venture capitalist’s aggregated fund rather than make individual investments — “and [they're] more excited by private companies than 4% muni bonds.”

The language is very different, but it’s not dissimilar to Youngman’s critique of journalistic nostalgia — or for that matter, Nick Denton’s defense of Gawker’s approach to web journalism to Fallows. People want what they want — and what they want is low-opportunity-cost fun. Nobody wants “to eat their vegetables,” to use Denton’s phrase for high-substance, high-prestige investigative journalism. These outlets need the support of institutions or nonprofits, not advertising and eyeballs alone.

It’s clear that both technology companies and technology journalism are on the cusp of something. Whether it’s a bubble or a boom, we can’t know. In the meantime, we have all of the problems of indeterminacy: practices and standards held over from an earlier period jostling against emerging conventions which offer something new.

Blogs and social media offer both entrepreneurs and journalists new modes of engagement with each other and a different kind of conversation with their readers. At the same time, the demands of traditional news formats can actually push us into stories that privilege new forms of manipulation. Reporters seeking a news peg for an analysis-driven story about a popular company can find quotes from blogs, Twitter, or Quora as easily as they can from a company’s press release, putting the same texts and voices into circulation.

Finally, news outlets have to recognize that a big part of their readership is driven by popular speculation, particularly if their coverage focuses on hot startups, big IPOs, and new deals. If a valuation bubble bursts, those eyeballs vanish too. Investing in deep analysis, conceptual scoops, alternative content, experimental storytelling — and the reporters who can produce those stories — is a terrific hedge against that dangerous future.

January 15 2010

15:00

This Week in Review: Who’s responsible for local news, and Google plays hardball with China

[Our friend Mark Coddington has spent the past several months writing weekly summaries of what's happened in the the changing world of journalism — both the important stories and the debates that came up around them online. I've liked them so much that I've asked him to join us here at the Lab. So every Friday morning — especially if you've been too busy to stay glued to Twitter and your RSS reader — come here to recap the week and see what you've missed. —Josh]

Who reports local news?: Pew’s Project for Excellence in Journalism released a study Monday that aimed to find out “who really reports the news that most people get about their communities?” In studying the Baltimore news media ecosystem for a week, the study found that traditional media — especially newspapers — did most of the original reporting while new media sources functioned largely as a quick way to disseminate news from other places.

The study got pretty predictable reactions: Major mainstream sources (New York Times, AP, L.A. Times) repeated that finding in perfunctory write-ups. (Poynter did a bit more with it, though.) It inspired at least one “see how important newspapers are?” column. And several new media thinkers pooh-poohed it, led by CUNY prof Jeff Jarvis, who said it “sets up a strawman and then lights the match.” Steve Buttry (who notes he’s a newspaper/TV exec himself) offered the sharpest critique of the study, concluding that it’s too narrow, focuses on stories that are in the mainstream media’s wheelhouse, and has some damning statistics for traditional-media reporting, too. Former journalist John Zhu gave an impassioned rebuttal to Jarvis and Buttry that’s well worth a read, too.

(A couple of interesting tangential angles if you want to dig deeper: New York Times media critic David Carr explains why blogs aren’t geared toward original reporting, and new media giant Gawker offers a quick can’t-we-all-just-get-along post saying web journalism needs more reporting and newspapers need to get up to speed.)

My take: I’m with CUNY’s C.W. Anderson and USC’s David WestphalOf course traditional media organizations report most of our news; this finding is neither a threat to new-media folks nor ammunition for those in old media. (I share Zhu’s frustration here — let’s quit turning every new piece of information into a political/rhetorical weapon and start working together to fix our system of news.) Clay Shirky said it well last March: The new news systems won’t come into place until after the old ones break, not before. Why would we expect any different now? Let’s accept this study as rudimentary affirmation of what already makes sense and keep plugging away to make things better.

Google talks tough with China: Citing attacks from hackers and limits on free speech, Google made big news this week by announcing it won’t censor its Chinese results anymore and is considering pulling out of the country altogether. The New York Times has a lucid explanation of the situation, and this 2005 Wall Street Journal article is good background on Google/China relations. Looking for something more in-depth? Search engine maven Danny Sullivan is your guy.

The Internet practically blew up with commentary on this move, so suffice it to say I’m only scratching the surface here. (GigaOm has a nice starter for opinions outside of the usual tech-blog suspects.) Many Google- and China-watchers praised the move as bold step forward for freedom, like Jeff Jarvis, author of “What Would Google Do?”; China/IT expert Rebecca MacKinnon (twice); New York Times human rights watchdog Nicholas Kristof; and tech guru Robert Scoble, to name a few.

TechCrunch’s Sarah Lacy was more cynical, saying this was a business move for Google. (Sullivan and Scoble rebut the point in the links above.) Global blogging advocate Ethan Zuckerman laid out four possible explanations for the decision. The Wall Street Journal and Wired had some more details about Google’s internal arguments over this move, including their concerns about repercussions on the China employees. The China-watching blog Imagethief looked at the stakes for Google, and the Atlantic’s James Fallows, who got back from China not too long ago, has a quick take on the stakes from a foreign-relations standpoint.

Jarvis also took the opportunity to revisit a fascinating point from his book: Google has become an “interest-state,” an organization that collaborates and derives power outside of the traditional national borders. Google’s actions this week certainly seemed very nation-like, and the point is worth pondering.

Fox News ethics: Fox News was the subject of a couple of big stories this week: The biggest came Monday, when the network announced that it had signed Sarah Palin to a multiyear deal as a contributor. Most of the online commentary has focused on what this move means from Palin’s perspective (if that’s what you’re looking for, the BBC has a good roundup), but I haven’t found much of substance looking at this from the Fox/news media angle. I’m guessing this is for two reasons: Nobody in the world of media-thinkers is surprised that Fox has become a home for another out-of-office Republican, and none of them are taking Fox very seriously from an ethical standpoint in the first place.

Salon founder and blogging expert Scott Rosenberg found this out the frustrating way when he got an apathetic response to his question of how Fox will cover any stories that involve her. As I responded to Rosenberg on Twitter, I think the lack of interest in his question are a fascinating indication of media watchers’ cynicism about Fox’s ethics. It seems to be a foregone conclusion that Fox News would be a shill for Palin regardless of whether she was an employee, simply by virtue of her conservatism. Regardless of whether you think that attitude is justified (I do), it’s sad that that’s the situation we’re in.

Fox News was also involved in a strange chain of events this week that started when The New York Times published a front-page profile of its chief, Roger Ailes. It included some stinging criticism from Rupert Murdoch’s son-in-law, British PR bigwig Matthew Freud. That led to speculation by The Daily Beast’s Lloyd Grove and Murdoch biographer Michael Wolff that Ailes’ days were numbered at Fox, with Wolff actually asserting that Ailes had already been fired. Then the L.A. Times reported that Ailes was still around and had News Corp.’s full support. Um, OK.

Facebook says privacy’s passé: In a short interview last week, Facebook founder Mark Zuckerberg gave a sort-of explanation for Facebook’s sweeping privacy changes last month, one that ReadWriteWeb’s Marshall Kirkpatrick recognized as a dramatic break from the privacy defenses Zuckerberg’s given in the past. Essentially, Kirkpatrick infers, Zuckerberg is saying he considers us to now be living in an age where privacy just doesn’t matter as much to people.

Kirkpatrick and The Huffington Post’s Craig Kanalley give two spirited rebuttals, and over at the social media hub Mashable, Vadim Lavrusik says journalists should be worried about Facebook’s changes, too. Meanwhile, Advertising Age media critic Simon Dumenco argues that we’re not getting enough out of all the information we’re feeding Facebook and Twitter.

Reading roundup: These last few items aren’t attached to any big media-related conversations from this week, but they’re all worth a close read. First, in the Online Journalism Review, Robert Niles made the bold argument that there is no revenue model for journalism. Steve Buttry filed a point-by-point rebuttal, and the two traded counterpoints in the comments of each other’s posts. It’s a good debate to dive into.

Second, Alan Mutter, an expert on the business side of the news industry, has a sharp two-part post crunching the numbers to find out how long publishers can afford to keep their print products going. He considers a few scenarios and concludes that “some publishers may not be able to sustain print products for as long as demand holds out.”

And finally, Internet freedom writer and activist Cory Doctorow explains the principle “close enough for rock ‘n’ roll,” and how it needs to drive our new-media experimentation. It’s a smart, optimistic yet grounded look at the future of innovation, and I like its implications for the future of journalism.

Photo of Sarah Palin by The NewsHour used under a Creative Commons license.

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