The Web Made Me Do It – and Other Fables of the Internet Age and Journalism

1. The Web Made Me Do It – and Other Fables of the Internet Age and Journalism Steven S. Ross Editorsteve@gmail.com

2. We will cover • The interaction of the Internet with “main-stream media” – MSM • Economics • Ethics • Prospects for careers in journalism • Discuss ALL MSM, but focus on newspapers • There are no obvious replacements for newspapers’ ability to cover local issues in depth. Local issues are the MOST important for society. • We’ll end with blogging

3. I will try to prove these points: • The Internet is not killing MSM. Bad MSM decisions are killing MSM. • Some MSM (weekly newspapers, and yes, alternative press) are doing well. • Journalism ethics traditions, which actually don’t go back very far anyway, are under enormous pressure. • Wall Street investors are not killing MSM either.

4. Context • Internet homes now 72% of all homes; two-thirds of that is broadband. 100 Mbps to homes by 2012. • TV and Online are merging… newspapers slow to jump in. • Erosion of editorial quality almost everywhere. JonBenet, not Iraq!

5. No question, online is gaining

6. Metro focus waning…

7. …Web use for news rising

8. To belabor the point: • At many old-media companies, though not all, the decades-long battle at the top between idealists and accountants is now over. The idealists have lost. The troubles of 2005, especially in print, dealt a further blow to the fight for journalism in the public interest. “If you argue about public trust today, you will be dismissed as an obstructionist and a romantic,” the editor of one of the country’s major papers told us privately – Pew, State of the Media, 2006.

9. Class discussion • Where do you get your news? • What kinds of news do you care about? • What is news anyway?

10. Bias? Cable TV worse!

11. Where MSM is now PANIC • TV audiences for network TV news have been falling, both for broadcast and cable (as viewed on a TV). • RADIO audiences are rising, but locally owned stations are rare. • MAGAZINE readership rises and falls with the economy and amount of free time. Lately, it has been falling. • WEEKLY NEWSPAPER circulation is rising. • DAILY NEWSPAPER circulation is falling.

12. Network TV: Revenue has fallen

13. Network TV: Audiences down… and trend predates the Web!!!

14. Cable news (from Pew) • The audience for cable news was still growing in 2005, but not by much and not across the board. • One channel, Fox News, continued to drive the growth, while its principal rivals, MSNBC and CNN, continued to suffer RATINGS declines. • CNN still leads in the number of different people who watch it over the course of the month (CUME), allowing it to maintain its claim to be a rival to Fox News. • CNN’s Headline News emerged as a new contender in the cable news landscape. It managed to surpass MSNBC to become the third most watched channel in 2005. • Online audiences are higher, and CNN leads

15. Cable TV news ratings

16. CUME – total viewers/month

17. Spending on newsgathering has been rising, except at MSNBC

18. Class discussion • What’s going on here? • How do you think C-SPAN is doing? • Daily Show? • Colbert Report?

19. Radio – more funds, less staff

20. Radio – recent revenue weakness

21. Talk-radio audiences are aging

22. Newsmagazine topics

23. Newsmagazine circulation

24. Daily newspapers in 2005 • Lost 600 employees, on base of about 50,000 (ASNE) • A few were hiring • Circulation down about 3% (ABC) • Ad revenue down 1-2% (Pew; hard to calculate); on-line revenue grew 30% from small base (will take 10 years to make up) • Move to sell out to local owners • Share prices cratered, especially at giants (NYT, Tribune), but this was not uniform.

25. Stock prices: Four major chains, 1/1/2000 - 1

26. Weekly newspapers doing well

27. A Little History • Internet was officially opened to commercial (versus educational) use in October 1992. Senators Al Gore and Orin Hatch played big roles in passing the legislation. • First graphical Web browser, Mosaic 0.9, was freely distributed by the University of Illinois in early 1993. • First journalism “new media” courses were being taught by that summer.

28. I was particularly optimistic about newspapers’ prospects • Less than a third (and usually less than 20%) of newspaper budgets is spent on editorial content. • Readers might pay $200 for daily newspaper subscription, but it costs $600-$1000 to print & deliver the paper! Advertising pays for that. • Web offers many new storytelling tools – video, audio, interactivity, vastly more room to deliver news. • Cutting circulation costs would leave more money for newsgathering and storytelling. • Advertising would be more immediate, more useful to readers and advertisers.

29. What happened: • Newspapers did not join the rush to the Internet. • Ran Websites as separate businesses. • Generally refused to hire high-priced talent. • Generally refused to spend on R&D. • But they overpaid for media expansion!

30. Half-hearted exceptions • Knight Ridder explored “news slate” idea and (earlier) an on-line service with AT&T called Viewtron, but did not cash in on its R&D lead – it was overwhelmed by Web-only media. • McClatchy developed good Web operation early, and bought Raleigh News & Observer. • Gannett recognized that its papers – generally small and ringing metro areas – could grab ad revenue from metros. Turned USA Today into major Web portal. • A.H. Belo hired Chris Feola in 1998, started big Web development program.

31. While back at the Web • Portals • Interactive ads • Entirely new ways to self-publish • IPTV • YouTube • Per-Inquiry ad payments • On-line auctions • Blogs

32. A word about classified ads • Straight-line decline in ad lineage has been constant since late 1980s – before Web existed • Due to rise in ad rates. • Google, eBay, Craig’s List do NOT take ad revenue from newspapers. These are NEW sources of ad revenue; more businesses can advertise!

33. Local ads in general • Local large retailers disappearing • Metro newspapers ignore new local businesses

34. Rush to the bottom (Pew, 2006)

35. Rush to the Bottom, II

36. Rush to the bottom, III

37. Race to the bottom IV

38. Race to the bottom V

39. Ethics issues • Is it the Web that forces bad ethical choices? • My annual survey on media and cyberspace

40. Print 72% North America 87% No specific beat 22% Other 34% Broadcast 13% Technology 10% Online 8% EMEA 9% Business/ Financial 22% APAC 1% Healthcare 6% Other 3% Wire Service 5% Other 1% South America <1% Consumer 6% Methodology • 11th Annual Survey of Media; fielded between April 28 and May 11, 2005 among journalists and editors registered with Bacon’s Media Map. Total respondents: 1,202 Geographical Location Media Type Beat

41. Key Themes • Recent media scandals have challenged media trustNew wave of high-profile journalist misdeeds are expected to take a heavy toll on the newsroom • Corporate scandals continue to thwart corporate credibility Journalists point to the lack of transparency for their loss in trust in corporations over the past year • Media appear mixed about blogs’ role in journalism Blogs have become a source of information • CEOs may be regaining some stature with the media Business journalists are more likely to turn to CEOs and consider their performance in their reporting than in 2003

42. Disagree 2% Disagree 14% Neither agree nor disagree 5% Neither agree nor disagree 27% Agree 59% Agree 93% Disagree 31% Agree 45% Disagree 35% Agree 34% Neither agree nor disagree 24% Neither agree nor disagree 31% Journalist trust in colleagues has decreased while care in fact checking has increased I am excruciatingly careful about fact checking my stories April 2005 November 2003 I am less trusting of the professional behavior of my colleagues.

43. …but has it? Pew (2006) says about sourcing:

44. …and about anonymous sources

45. Recent controversy surrounding anonymous sources (“Rathergate”) 41% 28% 30% Disclosures of non-government or corporate payments to independent bloggers 60% 23% 17% Scandals and disclosures involving forged documents 78% 15% 7% Disclosures of government payments to journalists 79% 13% 8% Very Strong/Strong Effect Neutral Weak/No effect at all High-profile ethical infractions made big impressions in US newsrooms What effects do you think the following developments will have on the credibility of the media in the coming year (including on-line, print and broadcast media)? (*) Very strong/strong effect

46. Class Questions: Question #1 By now, we’re all familiar with the stories of journalists being paid to essentially act as spokespeople for a governmental policy – Armstrong Williams, Michael McManus, Maggie Gallagher, and so forth. What are your thoughts on the effects of these stories on media credibility? Would you say that journalists are more vigilant now than before about disclosing their personal, political, or financial affiliations? Question #2 We’ve talked a great deal about the challenges facing the media today in terms of maintaining – and even regaining – credibility among readers, viewers, and each other. What would you say are the main steps that journalists are taking to preserve their credibility and integrity? Are they taking any steps at all? Or is this not even really a major worry among journalists and the media as a whole?

47. A lot 3% None 8% I have more trust 2% Some 47% Not so much 43% Unchanged 49% I have less trust 49% Media are divided on trust in corporations - corporate trust has been on a downward spiral How much trust do you have in corporations today? How has your trust in corporations changed over the past year?

48. Being candid about tough issues 76% Transparency during a company crisis 66% 57% Honesty with customers 56% Honesty with the media 50% Environmental practices Financial reporting practices 44% Advertising and marketing practices 29% 26% Community relations 18% Philanthropy 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Media are not impressed with corporate honesty and transparency in communications How do you see corporations performing in the following communications areas? (*) Bottom 2 summary

49. Question for class - Corporate Credibility One thing our study found was that journalists and editors believe that corporate transparency and honesty with regards to tough issues leave a lot to be desired. And recently, two Fortune 500 companies – Morgan Stanley and BP – issue statements that they would pull all advertising from news publications which published any “objectionable” stories about them. BP even went so far as to say that ad-accepting publications inform BP in advance of any news text or visuals they plan to publish that directly mention the company, a competitor or the oil-and-energy industry. In light of this, where do you see corporate transparency and honesty going within the next few years? And what effect do you think these corporate policies will have on news publications’ content? What do you think will happen to Hewlett-Packard product coverage?

50. No 49% 80% Yes 51% 70% 70% 66% 60% 50% 40% 30% 20% 14% 10% 12% 10% 0% For work- related tasks For entertainment Post to Weblogs Publish own Weblog Company has a Weblog Media are browsing but still not fully engaging with blogs Do you use Weblogs? How do you use Weblogs?