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July 21 2011

15:30

The newsonomics of U.S. media concentration

The rise and potential fall of Rupert Murdoch is a hell of a story. It is, though, closer to the Guardian’s Simon Jenkins’ description Tuesday, “not a Berlin Wall moment, just daft hysteria.” Facing only the meager competition of the slow-as-molasses debt-ceiling story, the Murdoch story managed to hit during the summer doldrums. Plus it’s great theater.

Is it just imported theater, though? We have to wonder how much the cries of “media monopoly” will cross the Atlantic. Is there much resonance here in the States for the outrage about media power in the U.K.? Will the sins (its newspaper unit now being called to account by a Parliamentary committee for deliberately blocking the hacking investigation) of News International impact its cousin, Fox Television, the one part of its U.S. holdings regulated directly by government — or can it build a firewall between the different parts of News Corp.? (See “New News Corp. Strategy: Become Even More of an American Company.”)

Certainly, the tales of News International’s ability to strike fear in the London political class are chilling. Our issues in the U.S., though, are largely different. Both come down to who owns the media, and what we need in the diversity of news voices.

The question of media concentration here is tricky, complex, and a profoundly local question. Yes, there are national issues — but the forces of cheaper, digital publishing and promise of national and global markets easily reached by the Internet have spawned much more competition on a national level.

As to what kind of local reporting we get, we see powerful forces at work, shaping who owns what and how much. Likely, we’ll see some News Corp. fallout in FCC debates now re-igniting in and around Washington, D.C. — as the fire of regulating media burns more brightly here, even as Ofcom, the British regulator, grapples with similar issues.

That said, the question of media concentration, or what I will call the newsonomics of U.S. media concentration, will be fought out on two battlegrounds in the U.S. One is at the regulatory level, as the FCC looks at cross-ownership and the cap on local broadcast news holdings by a single national company, like News Corp., and may take into account its U.K. misdeeds. (Especially if the 9/11 victim wiretapping claims are borne out.) Second, and probably more important, sheer economic change is rapidly re-shaping who owns the news media on which we depend. The fast-eroding economics of the traditional print newspaper business are changing the face both of competition and of journalistic practice faster than any government policy can affect.

So this is how our time may play out. Smart, digital-first roll-ups align with massive consolidation.

First, let’s look at the print trade, at mid-year. The numbers are awful, and getting no better. We’ve seen the 22nd consecutive quarter of no-ad-growth for U.S. dailies, the last positive sign registered back in 2006. Further staff reductions, albeit with less public announcement, continue at most major news companies. This week, Gannett — still the largest U.S. news company — reported a 7-percent ad revenue decline for the second quarter, typical among its peers. Its digital ad revenues were up 13 percent, a slowing of digital ad growth also being seen around the industry.

We see a strategy of continuing cost-cutting across the board, with a new phenomenon — roll-up (“The newsonomics of roll-up“) — trying to play out.

Hedge funds — which bought into the industry through and after 14 newspaper company bankruptcies — are having their presence felt. Most recently, Alden Global Capital, the quietest major player in the American news industry, bought out its partners and now owns 100 percent of Journal Register Company. Alden, with interests in as many as 10 U.S. newspaper chains, apparently liked the moves of CEO John Paton. Paton’s digital-first strategies have more rapidly cut legacy costs than other publishers’ moves, and moved the needle more quickly in upping digital revenues.

No terms were announced, but Paton says “all its lenders were paid in full.” That would be a qualified success, given the bath everyone involved in the newspaper industry has taken in the last half-decade.

In JRC’s case, we’d have to say the push of hedge funds for faster change has been more positive than negative. Pre-bankruptcy, it was derided for its poor journalism and soul-crushing budgeting. Under Paton, who has brought in innovators like Arturo Duran, Jim Brady, and Steve Buttry, the company is trying to reinvent new, digital-first local, preserving local journalism jobs as much as possible. A work very much in early progress.

You can bet that Alden’s move is just one of its first. Sure, as a hedge fund, it may just be getting JRC ready to sell; hedge funds don’t want to be long-term operators. Before that happens, though, expect the next shoe to drop: consolidation.

JRC owns numerous properties around Philly, and a roll-up with Greg Osberg-led (and Alden part-owned) Philadelphia Media Network, has been talked about. Meld the same kind of synergies, and faster-moving print-to-digital strategies of Paton with Osberg’s new multi-point, Project Liberty plan, and you have a combined strategy. Further combine the operations into a single company — removing more overhead, more administration, more cost — and you have a better business to hold, or sell, or still further combine with still more regional entities.

It’s not just a Philly scenario.

In southern California, the question is how the three once-bankrupt operations — Freedom Communications, MediaNews’ Los Angeles News Group and Tribune’s L.A. Times (still not quite post-bankrupt, but acting like it is) — will mate. Over price, talks broke down about merging Freedom and MediaNews (both substantially owned by Alden; see Rick Edmonds’ Poynter piece for detail). Yet, everyone in the market believes consolidation will come. Now with Platinum Equity, another private equity owner, putting its San Diego Union-Tribune back on the market just two years after buying it for a song, we could see massive consolidation of newspaper companies in southern California.

Media concentration, perhaps in the works: Southern California, between L.A. and San Diego, contains at least 21 million people — or a third of the total population of the U.K. Philly and Southern California may among the first to consolidate, but the trends are the same everywhere.

So this is how our time may play out. Smart, digital-first roll-ups align with massive consolidation. It’s time to get our heads around that. That won’t necessarily mean that Alden, or other hyper-private owners, keep the new franchises. Their goal probably is to sell. But to whom, with what sense of public interest?

Which brings us back to broadcast, to which newspaper people give much too little shrift.

Both those in the old declining newspaper trade and those in the mature and largely flat broadcast trade (as an indication, Gannett’s broadcast division revenues grew to $184.4 million from $184 million in the second quarter) are beginning to figure the future this way: there may only be enough ad revenue in mid-metro markets (and smaller) to maintain one substantial journalistic operation. Not one newspaper and one local broadcaster. But, one, presumably combined text and video, paper and air, increasingly digital operation.

So, finally, let’s turn back to the FCC. The Third Circuit Court of Appeals just returned cross-ownership regulations back to the FCC, largely on procedural (“hey, you forgot the public input part”) grounds. In addition, it will likely soon take up the national cap on local broadcast ownership. (Good sum-up of FCC-related action by Josh Smith at the National Journal.)

Which brings us back to the News Corp story. The national cap — how much of the U.S. any one national company can serve with local broadcast — is 39 percent. Fox News does that with 27 stations, and, of course, has lobbied for more reach. So, the media concentration issue may play out as the cap is further debated, and as cross-ownership — a News Corp. issue in and around New York/New Jersey — returns as well. Will Hackgate’s winds blow westward, as local broadcast news concentration comes up again?

Though it may be shocking to many newspaper people, though, local TV news is a major source of how people get the news. Some 25 to 28 million viewers watch local early-evening or late-evening TV news, according to the Project for Excellence in Journalism. That compares to about a 42-million weekday newspaper circulation, so those numbers aren’t quite apples to apples. In my research for Outsell, I noted that local survey data indicated that reliance on TV news equaled that of newspapers.

As Steve Waldman’s strong report for the FCC pointed out, local TV news is “more important than ever” — but thin on accountability reporting.

So while much of the media concentration questions centers on print, local broadcast ownership, and direction of news coverage, matters a lot.

Combine that local concentration — 39 percent or more — with the sense that the market may only support single journalistic entitities and we’re back to the theme of media concentration, perhaps on a scale hitherto unseen.

A declining local press, with signs of impending roll-up. Stronger local TV news, weaker in accountability reporting, and pushing for more roll-up. Winds of outrage wafting over the Atlantic. Regulatory breezes gaining strength.

These are powerful forces colliding, and in the balance, the news of the day won’t be quite the same.

January 20 2011

21:00

The shakeup at MediaNews: Why it could be the leadup to a massive newspaper consolidation

[Our regular contributor Martin Langeveld spent 13 years as a publisher in MediaNews Group. That gives him an inside perspective on the company's bankruptcy filing, which he shares with us here. —Ed.]

Back in the early 1990s, Dean Singleton predicted that ultimately there would be just three newspaper companies left standing, and he intended his MediaNews Group to be one of them.

It was an audacious prediction, because at the time, after a decade of wheeling, dealing and sometimes ruthless management, MediaNews Group still consisted of just a dozen newspapers, and the company’s board meetings, as he was fond of saying, “could be held in the front seat of a pickup truck.” But Singleton often repeated his prediction of industry consolidation, and it was the driver behind MediaNews’s growth into the sixth largest newspaper company (in terms of circulation) over the past 15 years. Today MediaNews has 54 daily newspapers with a total of 2.4 million weekday circulation. (On its own site, MediaNews claims to be the “second largest media company,” but that’s a double stretch: Its properties are nearly all newspaper entities, and, by my count, Gannett, Tribune, News Corp., McClatchy and Advance have more daily paid print circulation — and are certainly all bigger media companies than MediaNews.)

MediaNews’s growth was accomplished not only through acquisitions but through innovative regional partnerships such as the California Newspaper Partnership, and was paid for through a complex and ever-changing leverage structure put together by the financial wizardry of Singleton’s associate Joseph “Jody” Lodovic IV.

But over the past few years, opportunities for Singleton to pursue his vision came to a halt. MediaNews could not outrun the ticking clock of debt accumulation; revenues plummeted; newspaper values tumbled; and lenders threatened foreclosure. Lodovic engineered a strategic and very quick bankruptcy that wiped out $765 million in debt by placing nearly all of the company’s stock in the hands of the former bondholders. Remarkably, the bankruptcy reorganization left him and Singleton in charge and with a small equity stake, plus the opportunity to earn back an equity position up to 20 percent. They also had theoretical control in the form of the power to appoint a majority of the board.

The shakeup

It was an unusual outcome — in other major newspaper bankruptcies, the lenders have imposed new management. For example, there have already been several changes at the top in Tribune’s ongoing bankruptcy process; at Freedom Communications, longtime chief Burl Osborne was replaced by Mitchell Stern, whose background includes CEO stints at Fox Television Stations, Inc. and Direct TV; at the Phildelphia Media Network, the publisher of the Inquirer and Daily News, Greg Osberg, a veteran of Newsweek and U.S. News & World Report, was handed the reigns; and at the Minneapolis Star-Tribune, Michael Klingensmith, a longtime Time Inc. executive, became CEO following the paper’s emergence from bankruptcy.

And then there is Journal Register Company, which emerged from bankruptcy in August 2009 and was once known as one of the most rapacious of publishing firms. “Tell me a Jelenic story,” Singleton would ask new refugees from Journal Register hired by one of his papers, referring to the sometimes ludicrous anecdotes of skinflint budget management attributed to Journal Register CEO Robert Jelenic and his lieutenant, CFO Jean Clifton. But under its post-bankruptcy CEO, John Paton, Journal Register Company has become a forward-thinking, innovative organization with a digital-enterprise management style, and has even instituted a profit-sharing plan which was on track, as of October, to make a substantial year-end payout.

So given that the normal pattern is for the post-bankruptcy owners to dump the old leadership team, it should not be surprising that the MediaNews creditors-turned-owners considered Singleton and Lodovic to be on probation. And it turns out that their trial period is over. On Tuesday, MediaNews announced a shakeup in which Lodovic (who has no street-level newspaper or digital operating experience, and whose financial skills were no longer relevant in the post-bankruptcy structure) was ousted and Singleton was reassigned to “executive chairman of the board” — ostensibly with strategic and deal-making responsibilities described specifically as “opportunities to optimize the company’s portfolio of properties and consolidation opportunities in the newspaper industry.”

On the surface, this looks like a way for Singleton to pursue his vision of consolidation, something he alluded to at the time MediaNews emerged from bankruptcy. But in reality, the shakeup robs him of nearly all his clout. The Singleton-Lodovic appointees to the MediaNews board are gone, replaced by new directors representing the stockholders group led by Alden Global Capital, a hedge fund firm which has acquired a large, though not controlling, stake. Several interim executive positions were also filled by people related to Alden or its parent, Smith Management LLC. While Singleton may have ideas for strategic consolidations, without Lodovic he lacks the necessary financial engineering savvy, and without control of the board, he can’t make anything happen. The new title for Singleton looks and feels like a face-saving ambassadorial position.

Consolidation?

So the question becomes, what will happen next? For clues, it is worth digging into Alden Global Capital and a web of investment cross-connections that tie it and several other hedge funds and investment banks to most of the major newspaper firms that have experienced bankruptcies in the last few years.

Consider the following list of investment banks, hedge funds and investment managers that have been reported to be involved in various bankrupt or post-bankrupt publishing companies (note, though, that because most of these are private investments by relatively secretive players, it’s not possible to know whether all of them are still involved as listed, or what their ownership percentages are):

MediaNews Group: A large stake is held by Alden Global Capital; the reorganization was led by BankAmerica and involved 116 lender-creditors.

Philadelphia Media Network (publisher of the Inquirer and Daily News): Alden Global Capital, Angelo, Gordon & Co, Credit Suisse, Citizens Bank, CIT Group.

Journal Register Company: Alden Global Capital, JPMorgan Chase.

Freedom Communications: Alden Global Capital.

Tribune Company: Alden Global Capital, Angelo, Gordon & Company, Greywolf Capital, Oak Tree Capital Management, JPMorgan Chase. (Note, in this case, the players are not on the same page yet, with Alden and others filing suit against JPMorgan and others.)

Minneapolis Star-Tribune: Angelo, Gordon & Company, Credit Suisse, Wayzata Investment Partners.

Postmedia Network Inc.: The Canadian group acquired the newspaper holdings of bankrupt Canwest Global Communications Corporation with backing from Golden Tree Asset Management as well as Alden Global Media and a number of smaller investment funds. John Paton, CEO of the above-listed Journal Register Company, serves as an advisor and recruited its CEO, Paul Godfrey, a media executive who also did a stint as CEO of the Toronto Blue Jays.

Morris Communications: The lone publisher with no apparent overlapping investors shared with the others; its principal creditor in bankruptcy was Wilmington Trust FSB. But Wilmington is a bank, and in most of these cases the banks have been flipping their holdings to the hedge funds.

Clearly, Alden is the outfit with the most skin in the game, having investments in MediaNews, Freedom, Philadelphia Media, Journal Register, Freedom, Tribune and Postmedia. (Incidentally, as a further extension of this network, JP Morgan Chase, which has been involved in the Tribune, Freedom and Journal Register reorganizations, is the largest stockholder at Gannett, with a 10.2 percent “passive” investment.)

With all these interrelationships among investors and “distressed” newspaper firms, it’s not hard to see why Dean Singleton might say that achieving some kind of “consolidation” will be a full-time job. Still, it seems unlikely that Singleton will get to pull the strings, when the money behind the interlocking investment structures is controlled by billionaire Randall Smith, Alden’s founder, who built his fortune through investments in junk bonds and distressed properties. Alden acquired most of its newspaper stakes through its Alden Global Distressed Opportunities Fund, which it launched in 2008 and which is now worth nearly $3 billion. Alden has offices in New York, Dallas, Dubai and Mumbai, along with a tax-haven presence on the Channel Island Jersey.

The tip of the iceberg of consolidation shows in rumors of a possible merger between Freedom and MediaNews. This would be of strategic value particularly in California, where MediaNews already controls about 26 percent of the newspaper market by circulation through its California Newspaper Partnership created by Singleton and Lodovic. MediaNews, Gannett and Stephens Media Group all contributed newspapers to the partnership, in which each firm holds a proportionate equity stake and profit share, but which is controlled and managed by MediaNews. Combining MediaNews and Freedom would add another 7 percent, bringing the total to 33 percent. Antitrust is unlikely to be a big hurdle, since the MediaNews and Freedom holdings compete only at territorial margins and the continuing decline in newspaper revenue and circulation is a sufficient argument for the need to consolidate.

Alden could be seeing the California opportunity not only as a chance to find additional cost savings through production efficiency, but more importantly as a way to gain revenue through market share, both in print and online. Conceivably, because of Alden’s role in Tribune, the Los Angeles Times could end up as part of the partnership as well, boosting the consortium to about half the state’s paid circulation.

This California consolidation opportunity could be used as a model for similar possibilities elsewhere. For example, in New England, a combination of MediaNews, Journal Register and Tribune would have properties in Connecticut, Rhode Island and Massachusetts — totaling about 25 percent of circulation in those states, on a par with the current California partnership. On a countrywide basis, the companies in which Alden appears to have a stake and some degree of influence, as detailed above, have about 15 percent of all circulation and if fully merged, would be about 10 percent bigger than the current champion, Gannett. Gannett currently holds only about 13 percent of total circulation, and when compared with most other media such as television, cable, radio and magazines, the patchworked map of newspaper ownership and its lack of concentration of ownership both now seem outdated and inefficient. Singleton’s early vision of three principal players owning most of the newspaper landscape is increasingly likely.

But it must be done right. Strategic geographic consolidations, if operationally led (one hopes) by someone of Paton’s caliber, could be a potent force for the rejuvenation of the industry, including a renewed focus on what, after all, is the principal product and potential strength of all three companies: local journalism, along with Paton’s strong emphasis on digital-first, print-last thinking.

MediaNews’s own statement on the reorganization seems to echo this: “These measures will strengthen the company’s performance in its core markets, and continue the transformation of the business from a print-oriented newspaper company to a locally focused provider of news and information across multiple platforms.”

It’s really the last hope for the newspaper business, but a pessimistic view is possible, of course. Randall Smith, Alden’s CEO, is a shrewder and more sophisticated financial engineer than Lodovic was as Singleton’s second-in-command, and Alden’s ultimate interest is in earning a strong return on its investments, not in the future of journalism, so its strategy is at heart a financial one. And, yes, consolidation will come at the cost of jobs.

But Smith also knows that the only way to win his big bet on the future of newspapers is to turn them into nimble, modern digital news enterprises, and even Singleton (who rarely touches a computer) seems to agree.

Let’s hope they both listen to Paton, who said in a December speech:

Stop listening to newspaper people. We have had nearly 15 years to figure out the Web and as an industry we newspaper people are no good at it. No good at it at all. Want to get good at it? Then stop listening to the newspaper people and start listening to the rest of the world. And, I would point out, as we have done at JRC – put the digital people in charge – of everything.

Disclosure: I worked for MediaNews Group for 13 years as a publisher in its newspapers in Pittsfield and North Adams, Mass. and Brattleboro, Vt. In a previous post, I asked whether Singleton could steer MediaNews to a digital future.

October 08 2010

14:00

This Week in Review: A surprisingly sensible move online, two ugly falls, and questioning hyperlocal news

[Every Friday, Mark Coddington sums up the week's top stories about the future of news and the debates that grew up around them. —Josh]

Another old-media stalwart goes online: This week’s biggest story is a lot more interesting for media geeks than for those more on the tech side, but I think it does have some value as a sort of symbolic moment. Howard Kurtz, who’s been The Washington Post’s media writer for pretty much all of its recent history, jumped this week to The Daily Beast, the aggregation and news site run by former magazine star Tina Brown and media mogul Barry Diller. Kurtz will head the site’s D.C. bureau and write about media and politics. He’s about as traditional/insider Washington media as they come (he also hosts CNN’s Reliable Sources), so seeing him move to an online-only operation that has little Beltway presence was surprising to a lot of media watchers.

So why’d he do it? In the announcement story at The Daily Beast, Kurtz said it was “the challenge of fast-paced online journalism” that drew him in. In interviews with TBD, Yahoo News and The New York Times, Kurtz referred to himself as an “online entrepreneur” who hopes to find it easier to innovate at a two-year-old web publication than within a hulking institution like the Post. “If you want to get out there and invent something new, maybe it is better to try to do that at a young place that’s still growing,” he told TBD.

Kurtz has his critics, and while there are some (like the American Journalism Review’s Rem Rieder) who saw this as a benchmark event for web journalism, several others didn’t see The Daily Beast as the plucky, outsider startup Kurtz made it out to be. PaidContent’s David Kaplan said that with folks like Brown and Diller involved, The Daily Beast has a lot of old media in its blood. (It may merge with Newsweek soon.) Salon’s Alex Pareene made the point more sharply, saying he was going to work for his “rich friend’s cheap-content farm” for a “fat check and a fancy title.” As Rachel Sklar told Politico (in a much kinder take), for Kurtz, this is “risk, but padded risk.”

Maybe the fact that this move isn’t nearly as shockingly risky as it used to be is the main cultural shift we’re seeing, argued Poynter’s Steve Myers in the most thoughtful piece on this issue. Kurtz is following a trail already blazed by innovators who have helped web journalism become financially mature enough to make this decision easy, Myers said. “Kurtz’s move isn’t risky or edgy; it’s well-reasoned and practical — which says more about the state of online media than it does about his own career path,” Myers wrote. For his part, Kurtz said that his departure from the Post doesn’t symbolize the death of print, but it does say something about the energy and excitement on the web.

Of course, people immediately started drawing up lists of who should replace Kurtz at the Post, but the most worthwhile item on that front is the advice for Howard Kurtz’s replacement by Clint Hendler of the Columbia Journalism Review. Hendler argued we’d be better off with a media critic than with another studiously balanced media writer. According to Hendler, that requires “someone who is willing to, as the case warrants, state opinions, poke fun, call sides, and make enemies.”

A reporter and a newspaper chain’s sad scandals: Two media scandals dominated the news about the news this week. First, Rick Sanchez up and got himself fired by CNN last Friday for a radio rant in which he called Jon Stewart a bigot and suggested that Jews run the news media. Sanchez apologized a few days later, and The Huffington Post’s Chez Pazienza mined the incident for clues of what CNN/Rick Sanchez relations were like behind the scenes.

There are a couple of minor angles to this that might interest future-of-news folks: Joe Gandelman at The Moderate Voice used the situation to point out that those in the news media are being targeted more severely by partisans on both sides. (We got better examples of this with the Dave Weigel, Octavia Nasr and Helen Thomas snafus this summer.) Also, Sanchez was one of the news industry’s most popular figures on Twitter, and his account, @RickSanchezCNN, may die. Lost Remote said it’s a reminder for journalists to create Twitter accounts in their own names, not just in their employers’.

Second, The New York Times’ David Carr detailed a litany of examples of a frat-boy, shock-jock culture that’s taken over the Tribune Co. since Sam Zell bought it in 2007. (Gawker and New York gave us punchy summaries of the revelations.) The Tribune is possibly the biggest and clearest example of the newspaper industry’s disastrous decline over the past few years, and this article simply adds more fuel to the fire. The Columbia Journalism Review’s Ryan Chittum noted that the article also contains the first report of Zell directly intervening in news coverage to advance his own business interests. Meanwhile, the Tribune is slogging through bankruptcy, as mediation has broken down.

New media analyst Dan Conover saw the Tribune fiasco as evidence that the news business doesn’t just need to be reformed, it needs to be blown up. “We are past the point of happy endings, beyond the hope of half measures, and we know too much now to keep accepting the smugly reasonable advice of the Old Order’s deeply conflicted spokespeople,” he wrote. It’s quite the righteous-anger-fueled rant.

The hyperlocal business model questioned: We talked a bit about hyperlocal news last week, and that conversation bled over into this week, as Alan Mutter talked to J-Lab’s Jan Schaffer about her fantastic analysis of local news startups. Mutter quoted Schaffer as saying that community news sites are not a business, then went on to make the point that like many startups, many new news organizations go under within a few years. The money just isn’t there, Mutter said. (The Wall also has 10 takeaways from Schaffer’s study.)

For those in the local news business themselves, the Reynolds Journalism Institute’s Joy Mayer provided some helpful tips and anecdotes from West Seattle Blog’s Tracy Record, and the Online Journalism Review’s Robert Niles put together an online news startup checklist. Meanwhile, the hyperlocal giant du jour, AOL’s Patch, continued its expansion with a launch in Seattle, and dropped hints of a plan to get into newspapers. TBD’s Steve Buttry assured local news orgs that they can compete and collaborate with Patch and other competitors at the same time.

The iPad’s explosive growth: It’s been a little while since we heard too much about the iPad, but we got some interesting pieces about it this week. CNBC informed us that the iPad has blown past the DVD player as the fastest-adopted non-phone product in U.S. history with 3 million units sold in its first 80 days and 4.5 million per quarter, well more than even the iPhone’s 1 million in its first quarter. It’s on pace to pass the entire industries of gaming hardware and non-smart cellphones in terms of sales by next year. The NPD Group also released a survey of iPad owners that found that early adopters are using their iPads for an average of 18 hours a week, and for a third of them, that number is increasing.

When the iPad first came out, many people saw its users spending that time primarily consuming media, rather than creating it. But in an attempt to refute that idea, Business Insider put together an interesting list of 10 ways people are using the iPad to create content. And marketer Hutch Carpenter looked at the quality of various uses for the iPad and predicted that as Apple and app developers improve the user’s experience, it will become a truly disruptive technology.

More defenses of social media’s social activism: Malcolm Gladwell’s New Yorker piece questioning Twitter’s capability of producing social change drew no shortage of criticism last week, and it continued to come in this week. Harvard scholar David Weinberger made several of the common critiques of the article, focusing on the idea that Gladwell is tearing down a straw man who believes that the web can topple tyrannies by itself. Other takes: Change Observer’s Maria Popova argued Gladwell is defining activism too narrowly, and that online communities broaden our scope of empathy, which bridges the gap between awareness and action; The Guardian’s Leo Mirani said that social media can quickly spread information from alternative viewpoints we might never see otherwise; and Clay Shirky, the target of much of Gladwell’s broadside, seemed kind of amused by Gladwell’s whole point.

The sharpest rebuttal this week (along with Weinberger’s) came from Shea Bennett of Twittercism, who argued that change starts small and takes time, even with social media involved, but that doesn’t mean it isn’t happening. “As we all continue to refine and improve our online social communities, this shift in power away from a privileged few to an increasingly organised collective that can be called at a moment’s notice [presents] a real threat to the status quo,” he wrote.

Reading roundup: A few more nifty things to check out this weekend:

— A few cool resources on data journalism were published this week: British j-prof Paul Bradshaw wrote an invaluable guide to data journalism at The Guardian, taking you through everything from data collection to sorting to contextualizing to visualization. ReadWriteCloud’s Alex Williams followed that post up with two posts making the case for data journalism and giving an overview of five data visualization tools. And if you needed some inspiration, PBS’ MediaShift highlighted six incredible data visualization projects.

— The offline reading app Instapaper has become pretty popular with web/media geeks, and its founder, Marco Arment, just rolled out a paid subscription service. The Lab’s Joshua Benton examined what this plan might mean for future web paywalls.

— Several mobile journalism tidbits: TBD’s Steve Buttry made a case for the urgency of developing a mobile journalism plan in newsrooms, The Guardian reported on a survey looking at mobile device use and newspaper/magazine readership, and the Ryerson Review of Journalism gave an overview of Canadian news orgs’ forays into mobile news.

— Northwestern j-prof Pablo Boczkowski gave a fascinating interview to the Lab’s C.W. Anderson on conformity in online news. Must-reading for news nerds.

— The real hot topic of the past week in the news/tech world was not any particular social network, but The Social Network, the movie about Facebook’s founding released last weekend. I couldn’t bring myself to dedicate a section of this week’s review to a movie, but the Lab’s Megan Garber did find a way to relate it to the future of news. Enjoy.

September 02 2010

15:00

The Newsonomics of less-is-more, more or less

[Each week, our friend Ken Doctor — author of Newsonomics and longtime watcher of the business side of digital news — writes about the economics of the news business for the Lab.]

It is a head-turner, which seems to be, at first, an only-in-Utah story. The Deseret Morning News, KSL TV, and KSL Radio, all owned by one company, the Deseret Management Co., a for-profit arm of the Church of Latter-Day Saints, are combining operations.

One headline: “Salt Lake City paper axes 43% of its staff”.

Another: “Deseret News a model of growth and innovation for the entire industry”.

One’s a fact; the other is aspirational.

Remove the religious subtext, for a moment, and I believe we see a model that will appear ordinary in many American cities, within a few years. Think about it. If we as readers, viewers and listeners want words, photographs, videos, and audio, and expect it to be served up in an easy-to-use, relevant-to-me way, then why would the companies that produce news in those various forms be separate?

They’re separate, of course, because those words/picture/audio used to be called newspapers/magazines, network and cable TV and radio broadcasters. Those words, though, describe the old world, those packages the content came wrapped in. In our digital world, we’re seeing delivery blur through the Internet. And, that inevitably, and now more quickly, means that single companies will produce words, pictures and sound — and they’ll find ways to do it more cheaply and efficiently.

If you own the Salt Lake properties, or if you’re Tribune and own the Chicago Tribune, WGN-TV and WGN radio, you practically have a fiduciary responsibility to rearrange assets that will make the company more efficient. If you own a broadcast station or a newspaper, you can more easily see the rationale in buying or combining with the other, to meet customer (reader/viewer and advertiser) demands of the coming age.

So the Salt Lake Experiment joins TBD’s (“The Newsonomics of TBD“) in putting together the text and video pieces. They are the next generation in this attempt to make convergence work. Call it News Convergence 2.0, with Tampa’s Tribune/WFLA experiment the best poster child for 1.0. How well the Deseret operation (or TBD) executes is, of course, the key. Journalism isn’t about white-board theories, in any era; it’s about getting the news gathered, analyzed, and distributed to readers, and doing it better than the competition.

Let’s look at the newsonomics of the Deseret decision, though. The numbers in play are curious ones, as Deseret News President and CEO Clark Gilbert lays out a “less is more” theme in the major restructuring of his company. In fact, let’s use the more and less theme to gauge the moving pieces of the new business model.

  • Less is More: Take that “43%” headline. The legacy news staff of the Deseret News has indeed been cut 43 percent — 85 jobs, including those of the editor and publisher of the paper. That number includes both full-time and part-time positions. So we’d expect a lot less coverage, right? With a bit of frustration in his voice, Deseret News President and CEO Clark Gilbert tells me bluntly “That’s an Old Media world view. We have access to more journalists, hyperlocal contributors, national sports figures than ever before.” His point, and his plan: The combined operations of the remaining Deseret News staff and the sister news staffs at KSL TV and radio will operate smarter and more efficiently.

    “Say there’s a story on Capitol Hill [in Salt Lake City]. Right now, the paper sends a reporter and a photographer and KSL sends a reporter and videographer. That’s four people, and that story may end up on B3,” says Gilbert. “Now we’ll send one.”

    So, step one: “Reduce duplication.”

    So the news math changes dramatically. The new staff of something more than 200 (Gilbert is being cagey about the number) will be expected to multitask, with remaining staffers increasingly cross-trained and “new employees expected to have those skills.” Do the math. If it took four people to do a story and now it takes only one, you can afford to jettison one of those positions and get more productivity out of the other two.

    Step two: “Deepen coverage,” meaning the re-allocating of resources to cover issues most important to the readers. Gilbert says that about half of the remaining news staffers will serve in the “integrated newsroom,” with the remainder staying in more traditional journalistic roles. In that integrated newsroom of roughly a hundred, a third will serve as first responders/rewrite and two-thirds as field reporters. “You’re sandwiching the reporters between first responders [getting to news and getting it out quickly] and rewrite [those taking the reporters work and purposing it for various platforms],” explains Gilbert. Those who first-respond also do rewrite — so that’s going to be a busy staff.

    The journalistic question: How do the new stories compare to the old ones?

  • More Costs Less: Borrowing basic notions of getting cheap and free content from the Huffington Post and Demand Media, Gilbert is putting into action what he has long preached in academic and consulting circles. I’ve called this emerging time the Age of Cheap Content. That principle means that the new Deseret operation will leverage bigger-name writers (especially those consistent with its Mormon roots and values, like former BYU football star and current Philadelphia sports anchor Vai Sikahema) for little financial compensation. That’s the HuffPo model. And they’ll leverage Salt Lake and Utah reporters to address both topical and hyperlocal coverage, through the new Deseret Connect. That’s the Demand side of the idea, bringing together a large database of qualified writers — “not random bloggers,” says Gilbert — and keeping their payments low or non-existent. “Some of the best don’t write for money.”

    Deseret Connect already has received more than 100 applications, and Gilbert says he can see it scaling to a thousand or more contributors within the year, using management system techniques developed outside the news industry for BYU/Idaho faculty.

    Gilbert says the non-pros will work on a path from generalists to columnists to doing editorial features, with pay increasing along that continuum — though he’s clear to point out that people doing the writing won’t be looking to the company “as their main source of income.”

    So, looking at cost per content unit — a Demand-like analytic — the new company will be able to house lots more content under its brand, at a far lower cost point.

  • More Beats Less: The Deseret play aims to bring together text stories and blogs, video, and audio. That supposes that readers want all kinds of coverage brought together for them. It’s a bet that products that converge video and stories for readers will beat the competition, competition like MediaNews’ Salt Lake Tribune, the biggest non-church-owned news presence in the state. One big question here: How will the customer experience be converged? In Washington, two ongoing TV stations folded their websites into the new TBD at launch. How separate and how unified will the DeseretNews.com and KSL.com sites be?
  • More is More: The new Deseret operation doesn’t just focus on geography — Utah’s more than 700,000 households. It’s taking a twin approach to being a general interest news site — and a new worldwide voice for the Mormon faithful of 13 million or so worldwide. In the company’s strategy, that’s described as a values-oriented approach, and you can already read that six-point values mantra widely. The six: “the family, financial responsibility, excellence in education, care for the needy, values in the media, faith in the community.” They make for a strong philosophy, but in marketing, that’s quite a straddle — one that may be difficult to pull off, especially as Salt Lake City itself has become majority non-Mormon.

The economics of it are clear, though. Pay (or don’t) to get a story written or a video shot once, and then distribute it many times over. It’s basic Internet economics, with a nichy, religious angle, one of many variations we’ll soon be seeing on these increasingly popular themes.

August 12 2010

16:45

US group releases draft guidelines for online content syndication

A group of online content syndicators including the Associated Press, Reuters, Tribune Company and CBS has released a proposed set of guidelines for content syndication, according to a report from MediaWeek.

The Internet Content Syndication Council began considering the guidelines at the beginning of July.

The guidelines are aimed at countering the effect that the group sees as a growing and dangerous trend on the web – the rise of shoddy, poorly-sourced and edited content, often produced solely with gaming search engines in mind.

The proposed guidelines will now be open to review by its membership and the wider online media industry.

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April 09 2010

14:13
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