Big Media

Rupert Murdoch’s Anti-Competitive Internet News Cartel

Posted by on August 21, 2009 at 11:54 am. 1 Comments :

The newspaper industry’s woes are nothing new. They have been suffering declining revenues in both subscriptions and advertising for a couple of years. Some portion of that decline is attributable to the economy, but there is no question that the Internet has had an impact as well.

Rupert Murdoch, Chairman of news behemoth News Corporation, has been grumbling about what he regards as theft of his content for some time. Earlier this month he addressed a shareholder’s meeting and announced that News Corp would soon be charging for all of its Internet news properties. That, in my opinion, would fail to produce the results Murdoch desires. There is an abundance of news available online for free and there is little evidence that people would pay for access to Fox News or the New York Post.

Nevertheless, the Los Angeles Times is reporting that Murdoch is seeking to assemble the most powerful families in the news business to create a syndicate that would extort money from the news consuming public:

“As newspapers across the country struggle with declining readership and advertising revenue, News Corp. executives have been meeting in recent weeks with publishers about forming a consortium that would charge for news distributed online and on portable devices — and potentially stem the rising tide of red ink.”

The participating companies include the New York Times, Washington Post, Hearst Corp. and Tribune Co. With a roster like that it is difficult to imagine that they could get very far without being questioned by the Justice Department. The appearance of collusion and anti-trust activity could not be more conspicuous. There is no plausible justification for these enterprises to collectively plot a pay scheme for their individual services. It is blatantly anti-competitive and disadvantageous to consumers.

In the end, Murdoch’s proposals would not even resolve the problems the industry is facing. Any revenue that would be generated in this fashion would be a tiny percentage of the earnings these companies produce. And if they are presently losing customers who are willing to pay for subscriptions, what makes them think that these same customers would pay for the same product online?

The prospective members of Murdoch’s cartel should think long and hard about whether his counsel has any value. His own business just reported a loss of $3.4 billion. He personally was forced to take a 28% pay cut. His stewardship of MySpace is notable for his having turned it into a has-been, anti-social network that has been eclipsed by Facebook and Twitter. The New York Post has lost about $50 million annually for the past ten years. His track record on the Internet is abysmal. He is yesterday’s baron of dead-tree media whose only success has been with a cable “news” network that traffics in sensationalism and propaganda. Is this really someone whose advice should be taken seriously?

To sum up, Murdoch has a record of incompetence with regard to new media. The online pay model has failed spectacularly in all but a few non-representative cases. There is little money to be made by charging online news consumers. The availability of free news online is not only not receding, it is advancing. When the residue of the old world media is cleared from the landscape, and the economy regains some stability and vibrancy, then advertising will resume its customary place for funding news services online just like it has on every other platform it has ever employed.

The last thing the industry needs is to listen to a washed up, ink stained, relic who advocates strong-arming newspapers and consumers into an unlawful strategy that is bound to fail.

GE And News Corp: The Saga Continues

Posted by on August 8, 2009 at 2:19 pm. 5 Comments :

As previously reported, executives at GE and News Corp have been attempting to broker a deal that would end the bickering between the networks and, mostly, Keith Olbermann and Bill O’Reilly. I continue to maintain that it would be a violation of journalistic ethics for the execs to interfere with the judgment of their commentators. But the brass at GE and News Corp don’t seem to agree with me.

The first attempt at a truce was broken within 48 hours by Olbermann who, on returning from vacation, skewered O’Reilly royally, just like the good old days. O’Reilly took up the gauntlet and, as per his routine, ignored Olbermann and went straight after his boss at GE, Jeffrey Immelt. The tactic of bypassing Olbermann and aiming at Immelt is said to have been personally suggested by Fox News CEO Roger Ailes. With the war on again, the combatants began to reveal some of their innermost thoughts – particularly Ailes who, according to the Washington Post, summarized the situation thusly:

Ailes offered a blunt, if slightly jocular, diagnosis of the problem. He could control his nutcases, Ailes said, but Immelt couldn’t control his.

That says so much. First, Ailes is acknowledging that his people are nutcases (as if we didn’t already know). And second, Ailes is admitting that he has the power to manipulate the content and views of the nutcases who host Fox programs.

GE has issued a statement saying that they haven’t “told anyone at NBC News or MSNBC how to report the news.” But the New York Times claims to have sources who said that, not only was there a deal that covered Olbermann and O’Reilly, but also…

“Employees of daytime programs on MSNBC were specifically told by executives not to mention Fox hosts in segments critical of conservative media figures.”

What I want to know is, how can you produce a segment critical of conservative media figures without mentioning Fox hosts?

Olbermann (and anyone in his position) deserves respect for standing up to interference from the suits in the suites. It is the ethical thing to do in the news business. You simply do not let them intrude on your news judgment, especially if your job is to provide analysis and opinion. Unless, of course, you’re Bill O’Reilly, who is a coward, and a puppet for Ailes, who has previously admitted that he has the ability to direct what is said by Murdoch-owned pundits on TV and in print (over which he has no executive authority):

“Ailes warned that if Olbermann didn’t stop such attacks against Fox, he would unleash O’Reilly against NBC and would use the New York Post as well.”

This was basically extortion on the part of Ailes who literally served notice on GE saying that, “If you stop, we’ll stop.” The objective by both the GE and News Corp executives has nothing to do with the pursuit of news. Rather, it is a self-serving plot to tamp down any criticism of the parent companies. They are looking after their corporate interest, not the public interest.

This whole affair is a near perfect illustration of why monolithic corporations, with vested interests in far flung business and government affairs, should not be permitted to own news enterprises.

Would You Pay To Read Fox News?

Posted by on August 5, 2009 at 11:06 pm. 6 Comments :

Rupert Murdoch announced today that he intends to convert all of News Corp’s online news assets to subscription services. This news was released along with the quarterly earnings for News Corp that revealed a full year net loss of $3.4 billion, down from a profit of $5.4 billion.

If he thinks that he is going to recoup his losses by shutting the gates to his web properties, and sending that traffic to his competitors, he will be bitterly disappointed. News is not the sort of product that maintains exclusivity for very long. If there’s an earthquake in Peru or a celebrity dies, that information cannot be copyrighted and doled out by a privileged owner. And even when a reporter uncovers a major story after weeks of diligent and skillful research, as soon as it hits the streets it’s just more news and everyone else can pass it on to their audience.

The inherent value of a news enterprise is its credibility, its relationship with the customer, and its advertising reach. By erecting a wall between the publisher and the customer, both of the latter two items are severely squeezed. And if no one is consuming your product, credibility is hardly a concern. Nevertheless, Murdoch seems intent on his strategy for wringing revenue from his web visitors, but his arguments make little sense.

MURDOCH: The digital revolution has opened many new and inexpensive methods of distribution but it has not made content free. Accordingly we intend to charge for all our news websites.

Of course the truth is that it has made content free – at lease the majority of it, including most of what Murdoch publishes. Part of the reason it is free is due to the many new and inexpensive methods of distribution. If you remove costly production items like paper and presses and warehouses and trucks, you ought to be able to publish with significantly lower overhead. That means that advertising alone should be sufficient to be profitable. Television networks do it, and they have far greater overhead in production costs and celebrity salaries.

MURDOCH: Quality journalism is not cheap and an industry that gives away its content is simply cannibalizing its ability to produce good reporting.

Again, the media is a unique marketplace that has always given away its content in exchange for eyeballs that can be peddled to advertisers. And with regard to quality journalism not being cheap, that is something that Murdoch has never had to worry about since he doesn’t deal in quality journalism.

Murdoch has been a vocal critic of Google and other news aggregators who he says are stealing his product. He accuses them of benefiting from his company’s hard work without paying for it. But his Fox Nation is doing precisely the same thing by posting links to other news sites without offering them any payment either. So I wonder if he intends to start compensating those sites after he commences to charge for his own.

I still can’t see much of a market for online subscriptions to Fox News, Fox Nation, the New York Post, etc. Murdoch says that the fees charged by the Wall Street Journal are proof that the subscription model will work. But the differential between a subscription to the Journal and the Journal online is only forty cents a week. I suspect that that is not much of a barrier for Journal readers. Consequently, that may account for any success seen in that marketplace (although we don’t even know if there is any success because Murdoch will not release data on the Journal’s online only subscriber base).

In the end, Murdoch will just be doing a favor for all the other online news sites who learn to operate profitably without subscription fees. As the market matures there will be more and more of them. Advertisers will migrate to the web as it increasingly provides a superior return to fading newspapers. And since Murdoch is overweighted in dead-tree media, and his online acumen has been notoriously sub par (witness MySpace), this is just good news all around – the kind even I’d be willing to pay for (but don’t tell Rupert).

Bill O’Reilly Books, Then Bumps, WorldNetDaily Birther

Posted by on August 3, 2009 at 12:57 pm. 7 Comments :

Joseph Farah is the editor of the uber-conservative WorldNetDaily. He is also one of the chief proponents of the Birther Conspiracy that holds that Barack Obama is not eligible to be president because, they hysterically allege, he isn’t a U.S. citizen. This thoroughly caramelized nut case for reversing last November’s election has been debunked repeatedly, but continues to be peddled by dogged rightist reality deniers.

Now, the WorldNetDaily is reporting that their leader, Mr. Farrah, was all set to appear on The O’Reilly Factor until his list of demands was rejected by Bill O’Reilly himself. Here is the list as printed at WND:

  • Though a sober and civil discourse is always welcome, shouting is not;
  • No other guests on during the segment with Mr. Farah;
  • Discussion to be limited to the facts of the story;
  • Accurate, approved description of Mr. Farah and news organization he represents;
  • Screen ID chyron to be approved by Mr. Farah.

If this account is true, then O’Reilly retracted his invitation to Farrah because he objected to constraints on his freedom to shout at people and distort facts. But just the fact that a right wing web editor felt it necessary to itemize a list of criteria that included no shouting, stick with the facts, and chyron approval, for a right wing TV host, is pretty delicious irony. Even O’Reilly’s natural allies don’t trust him.

GE And FOX Agree To Censor Their News Divisions

Posted by on August 1, 2009 at 2:58 pm. 7 Comments :

In a report in the New York Times, the corporate parents of NBC and Fox News were brought together at a summit for CEO’s in an attempt to settle a long-simmering feud. Jeffrey Immelt, CEO of GE, and Rupert Murdoch, CEO of News Corp, sat down to try to work things out.

What they were striving to resolve was the eternal and bitter competition between MSNBC’s Keith Olbermann and Fox’s Bill O’Reilly. This affair has been a rancorous, and often humorous, battle wherein Olbermann frequently awarded O’Reilly his “Worst Person in the World,” trophy, and O’Reilly countered by slandering NBC, GE, and Immelt personally (O’Reilly would never utter Olbermann’s name). According to the Times’ Brian Stelter…

“It was a media cage fight, televised every weeknight at 8 p.m. But the match was halted when the blood started to spray executives in the high-priced seats.”

There are two things that are immensely disturbing about this backroom handshake. First and foremost, the corporate parents of news enterprises ought not to be dictating the content of their news divisions, or the opinions of their commentators. That is especially true if the reason for the ivory tower interference is to dampen any blowback on the parent company’s business or executives resulting from controversial positions. This is about the best example of why it is unwise for corporations with vested interests in broader business and government affairs to own news publishers to begin with.

Secondly, the result of this inter-cable warfare is precisely what Fox News wanted. MSNBC is caving in to a deliberate tactic designed to halt criticism of Fox and its personnel. It is a one-sided victory for Fox that comes at the expense of MSNBC’s best interests and dignity. It was less than four months ago that Fox News CEO, Roger Ailes, laid down the threat from which they are now reaping the harvest. Howard Kurtz of the Washington Post reported the tantrum Ailes threw in response to the escalating on-air debate:

“Ailes warned that if Olbermann didn’t stop such attacks against Fox, he would unleash O’Reilly against NBC and would use the New York Post as well.”

That’s precisely what happened, and it didn’t even take two weeks for Fox to follow through on its threat. Now we see this truce in effect at least partly because Immelt doesn’t like being called “a despicable human being” by O’Reilly. And the worst part is that Fox’s blatant bullying is being rewarded with a complete capitulation by MSNBC.

For these networks to enforce this agreement is nothing short of censorship. Olbermann responded with an email that said that he was not a party to any agreement, but he also seems to have halted his once routine attacks on O’Reilly and Fox News. As for Fox, their position now is that it is appropriate to direct their commentators to steer clear of certain topics. But that appears to apply only to topics that negatively impact the company brass. Just last week, after Glenn Beck called President Obama a racist, Fox released a statement that said that beck had merely…

“…expressed a personal opinion which represented his own views, not those of the Fox News Channel. And as with all commentators in the cable news arena, he is given the freedom to express his opinions.”

That freedom, of course, has limitations. From the Fox News point of view, it is alright for one of their hosts to comment disparagingly on the President of the United States, but it is not OK to comment on the president of the company. The company, after all, is sacrosanct and its interests are superior to those of the nation.

It is disheartening to see this sort of corporate thuggery imposed on what should be independent news divisions. One can only hope that the truce will fail and free expression will prevail.

Update: Olbermann returned from vacation and struck down any notion that the network brass would dictate the content of his program. To prove it, he returned Bill O’Reilly to the “World’s Worst” list and reprised his old “Bill-O the Clown” routine. Apparently, news of a network truce were exaggerated. That’s good news.

Fox News Is Killing The Republican Party

Posted by on July 24, 2009 at 11:56 am. 38 Comments :

The case was made long ago that Fox News is a blight on the media map. It is bad for journalism. It is bad for Democracy. It is bad for America. A so-called “news” network that repeatedly misinforms, even deliberately disinforms, its audience is failing any test of public service embodied by an ethical press.

I, personally, have made the case for an embargo of Fox News by Democrats and progressives (see Starve the Beast: Part I, Part II, Part III), documenting via studied analysis that there is no affirmative value to appearing on Fox News – a network that has established itself as overtly hostile to the Democratic message and its messengers.

However, there is another side to this that has not been addressed previously. Republicans might be well advised to avoid Fox News as well. There is a case to be made that Fox News is demonstrably harmful to the Republican Party. In fact, it may be the worst thing to happen to Republicans in decades. That may seem counter-intuitive when discussing Fox News, the acknowledged public relations division of the Republican Party. Fox has populated its air with right-wing mouthpieces and brazenly partisan advocates for a conservative Republican agenda. They read GOP press releases on the air verbatim as if they were the product of original research. They provide a forum where Republican politicians and pundits can peddle their views unchallenged. So how is this harmful to Republicans?

If all we were witnessing was the emergence of a mainstream conservative network that aspired to advance Republican themes and policies, there would not be much of note here. Most of the conventional media was already center-right before there was a Fox News. But Fox has corralled a stable of the most disreputable, unqualified, extremist, lunatics ever assembled, and is presenting them as experts, analysts, and leaders. These third-rate icons of idiocy are marketed by Fox like any other gag gift (i.e. pet rocks, plastic vomit, Sarah Palin, etc.). So while most Americans have never heard of actual Republican party bosses like House Minority Leader John Boehner and Senate Minority Leader Mitch McConnell, posers like Joe the Plumber and Carrie Prejean have become household names.

Fox News has descended into depths heretofore reserved for fringe characters. They are openly promoting the wackos who believe that President Obama is ineligible to hold office because he isn’t a U.S. citizen. They feature commentaries by secessionists and even those calling for an overthrow of the government and the Constitution. This explains how folks like Ralph Peters, a retired military officer who said that the Taliban captors of a U.S. Soldier would be saving us a lot of trouble and expense if they would just kill him, earn airtime on Fox. Peters previously told Fox News that he favors military strikes against media targets. This explains how Glenn Beck can agree with a guest that it would be a good thing if America were attacked again by Osama bin Laden. And don’t even get me started on Victoria Jackson, who has joined an ever-lengthening line of psycho-Chicken Littles who compare the President to Hitler.

Good Advice:
“If crazy ideologues have infiltrated the news business, we need to know about it.”
~ Bill O’Reilly, 7/16/09

The list of loonies extends to politicians like Michele Bachmann, entertainers like Ted Nugent, and of course, the talk show pundits like Rush Limbaugh, whose maniacal rantings are elevated by Fox into their version of political dialogue. It’s a dialogue that is consumed with ACORN conspiracies and Manchurian presidents. The problem is that by elevating bona fide nutcases, they are debasing honest and informed discourse. The mental cases are crowding out any reasonable voices that might exist amongst the more moderate Republicans (if there are any left). Fox appears to have made a tactical decision to permit the inmates full run of the asylum.

As a result, the Fox News audience is being dumbed down by a parade of paranoid know-nothings. This strategy appears to be successful for Fox in that it has attracted a loyal viewership that is eager to have their twisted preconceptions affirmed. The conflict-infused fare in which Fox specializes is a ratings juggernaut – just like any good fiction. However, this perceived popularity is having an inordinate impact on the GOP platform. By doubling down on crazy, Fox is driving the center of the Republican Party further down the rabid hole. They are reshaping the party into a more radicalized community of conspiracy nuts. So even as this helps Rupert Murdoch’s bottom line, it is making celebrities of political bottom-feeders. That can’t be good for the long-term prospects of the Republican Party.

With the Fox network unabashedly promoting the most ridiculous rumors, myths, and nightmares of the rightist fringe, moderate and independent Americans will grow ever more suspicious of the Fox/GOP agenda. Most Americans do not believe that Sonia Sotomayor is a racist; or that FEMA is constructing concentration camps; or that we are on a march toward socialism, communism, fascism, or whatever the right is peddling this week. Most Americans do not believe that Barack Obama is a Muslim, a reptilian alien, or the anti-Christ. In short, most Americans think that the loopy yarns spun by Fox News are fables told by madmen – and believed by even madder men and women who wallow in their doomsday utopia.

Fox News is fond of boasting about their ratings dominance. It is a daily occurrence and the structural core of their argument that they reflect the mood of America. The GOP has bought this argument in its entirety. So it is important to note here that success in the Nielsen ratings has no correlation to public opinion polling. The ratings only measure the program choices of Nielsen’s survey participants. That is a subset of the population at large, and not a particularly representative one. It is a sample focused on consumers, not voters. And its respondents are just those willing to have their TV viewing monitored 24 hours a day, which skews the sample in favor of people who aren’t creeped out by that. What’s more, viewing choices are not necessarily an endorsement of the opinions presented in the program. There are many reasons people choose to watch TV shows, the most frequent being its entertainment value. So any attempt to tie ratings to partisan politics is a foolish exercise that demonstrates a grievous misunderstanding of the business of television.

As for what constitutes success in the television marketplace, due to the broad diversification of available programming, it doesn’t take much to be heralded as a hit. A mere 3 share (3% of people watching TV) will land you in the top 10. For cable news the bar is set even lower. In fact, the top rated show on the top rated cable news network (The O’Reilly Factor) only gets about 3 million viewers. That’s less than 1% of the American population. It’s also less than World Wrestling Entertainment, SpongeBob SquarePants, and the CBS Evening News (the lowest rated broadcast network news program). By contrast, America’s Got Talent is seen by 12 million viewers – four times O’Reilly’s audience.

Numbers this low ought not to inspire much excitement from political operatives. Nevertheless, Republicans are riding the coattails of Fox News as if it were representative of a booming conservative mandate in the electorate. They are embracing Fox’s most delusional eccentrics. This is leading to the promotion of similar eccentrics within the party. Which brings us the absurd spectacle of the network’s nuts interviewing the party’s pinheads.

The inevitable result of this system of rewarding those farthest from reality is the creation of a constituency of crackpots. It is an endorsement of the philosophy brewed by the Tea Baggers that espouses racism, tyranny, and armed revolt. It is enabling a frightening corps of openly militant adversaries of democracy, free speech, and Constitutional rule. It is the sort of environment that produced the murders of Dr. George Tiller and Holocaust Museum guard Stephen Johns.

This is a textbook example of how the extreme rises to the top. It is also fundamentally contrary to the interests of the Republican Party. The more the population at large associates Republican ideology with the agenda of Fox News, and the fringe operators residing there, the more the party will be perceived as out of touch, or even out of their minds. It seems like such a waste after all of the effort and expense that Fox put into building a pseudo-journalistic enterprise with the goal of confounding viewers with false news-like theatrics.

Make no mistake, Fox News is still managed by hard core party patrons. And I’m not referring just to opinion-driven commentators like Glenn Beck, Bill O’Reilly, and Sean Hannity, although they are bad enough. No, I am talking about executives and editors like CEO, Roger Ailes, former Nixon and Bush media consultant. I’m talking about Washington Managing Editor and VP, Bill Sammon, an avid right-wing alum of the Washington “Moonie” Times. I’m talking about Business News Chief and VP, Neil Cavuto, antagonistic interrupter extraordinaire. And let us not forget the head hype-master, Rupert Murdoch, whose UK operations were just discovered to have been unlawfully wiretapping celebrities, politicians, and even members of the Royal Family. Augmenting that executive roster are the GOP regulars who are straight out of the just retired Republican White House: Karl Rove, Dana Perino, John Bolton, Dan Senor, and Linda Chavez. And then there are the Fox News clowns…er…“contributors” like Dick Morris, Ann Coulter, Fred Barnes, Charles Krauthammer, Rick Santorum, Newt Gingrich, Bernie Goldberg, Michele Malkin, and on and on. If nothing else, Fox is a full-employment program for rightist weasels (and they also operate the Conservative Book Promotion Club).

The mission of Fox News from its inception was to be more than just a voice of opposition to Democrats. It was to utterly crush the left end of the political spectrum leaving only a teetering right wing with no counter balance. Yet, despite the torrid embrace between Republicans and Fox News, it is apparent that Fox is the source of a sort of friendly fire that is decimating the GOP by exalting its most outlandish and unpopular players. And since Republicans have not been particularly popular anyway lately, the anchor being thrown to them by Fox can’t be all that helpful – – – Except to Democrats.

Media Reform Advances Courtesy Of The Economy

Posted by on July 15, 2009 at 6:09 pm. 5 Comments :

One of the biggest contributors to the woeful state of modern media is the extent to which media companies have consolidated into giant conglomerates with near monopoly power. Some of these corporations control majorities of communications enterprises in numerous markets nationwide.

It has long been a goal of media reform activists to bring about greater independence and diversity by implementing market caps to limit the reach of these companies. That goal has been hindered by the well-heeled media industry’s lobbying efforts. Now, it appears that the economy is stepping in to enact some free market reform of its own:

Is the bell tolling for Clear Channel?
“Analysts believe Clear Channel, now with about $22 billion in total debts, will have trouble making scheduled payments later this year. The company, already down to about 800 stations from its peak of about 1,200 stations, either will have to start selling stations itself or go into bankruptcy, where lenders will put stations up for sale.”

Sinclair Eyes Chapter 11
“Sinclair Broadcast Group Inc. said in a regulatory filing that it may file for bankruptcy protection, reports the Associated Press. A miserable advertising market and crippling debt burden may force the Baltimore-based broadcaster into Chapter 11.”

Clear Channel and Sinclair are leaders in their markets. They are also prominent purveyors of right-wing propaganda. No one likes to see businesses fail, but the prospect of these companies succumbing to recessionary forces could produce real benefits for the business of news. It would be preferable if similarly situated conglomerates were to divest their holdings and downsize operations voluntarily. But if they insist on clinging to power, at the expense of both shareholders and citizens, then this outcome is better than nothing.

The underlying television and radio stations impacted by this news will continue to broadcast. The prospect of them operating as independent, or as components of smaller station groups, is promising. The danger is that the troubled assets could be picked up by other big conglomerates. We’ll have to wait and see if this turns out to be beneficial or just more of the sort of consolidation that enhances the power of corporations and gags the voice of the people.

Murdoch Pawns Off Weekly Standard To Anschutz

Posted by on June 19, 2009 at 6:38 am. NO Comments :

Rupert Mudoch’s News Corp. has been bleeding badly financially. They have lost 49% of their stock value in the past 52 weeks. And acquiring the Wall Street Journal for $5 billion just as the newspaper business was collapsing couldn’t have helped matters.

Now News Corp. is reporting that they are unloading the Weekly Standard, the uber-rightist magazine founded by neo-icon, William Kristal. No reason or sale price was given in the announcement, but it is fairly evident that Murdoch needs to raise some cash and cut costs to service his massive debt.

The buyer is Clarity Media Group, a part of Phillip Anschutz’s billion dollar media and entertainment conglomerate. Clarity is the publisher of the Washington Examiner, a conservative freebie tabloid in D.C.

Don’t expect much to change at the Standard. Kristal will likely stay aboard, along with executive editor Fred Barnes. Both will also remain Fox News contributors. If anything, the magazine may begin to feature more stories dealing with Anschutz’s obsession for Dark Ages Christian Fundamentalism. He is a major backer of the Discovery Institute, a creationist think tank. He also finances anti-gay and pro-censorship organizations and initiatives.

In other words…more of the same.

Newspapers Conspiring To Hasten Their Own Demise

Posted by on May 29, 2009 at 11:43 am. NO Comments :

James Warren of The Atlantic reports that a bevy of newspaper executives gathered yesterday in Chicago for a clandestine discussion about “Models to Monetize Content.” Amongst the participants are the New York Times, Gannett, E. W. Scripps, Advance Publications, McClatchy, Hearst Newspapers, MediaNews Group, the Associated Press, Philadelphia Media Holdings, Lee Enterprises and Freedom Communication. The unadorned agenda of this cabal of publishers is to figure out how to make news consumers pick up the tab that advertisers have traditionally paid.

Setting aside the obvious appearance of a violation of anti-trust laws, the main problem with these old-media relics is that they still don’t understand the problems confronting them.

First of all, they aren’t losing money because subscription receipts are declining. Subscription revenue, while not insignificant, was never the foundation of the industry’s financial well being. It is advertisers that keep newspapers (and most media) in business. The value of subscribers is due more to the fact that higher circulation brings higher ad revenue than to the value of the actual subscription price.

Secondly, subscriptions aren’t declining because newspapers cost too much. They are declining because too often the product isn’t worth paying for. That would be true whether it were delivered to your doorstep or your browser. The state of the economy cannot be overlooked as a contributor to the subscriber exodus either. But when newspapers respond to tough economic times by cutting newsroom staff, they have to expect that readers will notice the falloff in quality. Once people perceive that they aren’t getting their money’s worth, they will be no more likely to pay for an online subscription than the dead tree variety.

Warren astutely notes in his article that newspaper executives are not the brightest inks in the well. Many of them are holdovers from an era that hasn’t kept up with modern competition. Others are transplants from TV or radio who lack experience in a medium that has little in common with its electronic cousins. The evidence of their shortcomings is observable in their haste to alter a business model that has worked fine for a couple of hundred years or more. To respond to current financial woes by shifting from a model that relies on advertisers to one that pinches readers is profoundly shortsighted. The economy, and advertising revenues, are bound to recover, but dimwitted decisions by panicky publishers could aggravate and prolong what would otherwise be a temporary setback.

There are challenges facing the newspaper business, to be sure. But there is no reason to presume that the sort of broad distribution model that has led to success in virtually every form of media has suddenly become inoperative. Newspapers need to adapt to the digital world in a manner that promotes access and ubiquity. Walling themselves off by erecting subscription barriers can only make matters worse and result in further isolation and debt.

Finally, if they think that by colluding with one another to set the terms of doing business with them will endear them to their customers, they are even stupider than I thought.

BREAKING: Fox News Switches Parties

Posted by on April 28, 2009 at 4:39 pm. 2 Comments :

In a stunning and unexpected development, Fox News CEO Roger Ailes and the CEO of its parent corporation News Corp, Rupert Murdoch, appeared at a hastily assembled news conference this afternoon to announce that they are abandoning their long-time affiliation with the Republican Party in favor of a political organization that more closely reflects their conservative values.

“We are not leaving the Republican Party,” Ailes told the press. “The Republican Party left us. After more than a decade of dedicated service to right-wing propaganda, the Republicans, and their supporters have drifted away to the point that there are hardly enough of them left to justify their own network anymore.”

Murdoch elaborated that…

“Recent polling shows that a mere 21% of the nation identify themselves as Republican. I’ve got a bloody network and newspapers to run, mate. I can’t be bothered with struggling to gain a bit of market share from that measly bunch.”

Murdoch is already trying to recover from news that his New York Post lost more than 20% of its readers in the past year. Consequently he has been broadening his rhetoric to be more inclusive. For instance, as reported in his own Wall Street Journal this week…

“[Murdoch] said complete nationalization of the biggest banks might have been a good thing; it would have allowed the government to break up the banks’ businesses and sell them as smaller entities. That way, ‘there would be no more too big to fail firms,’ he said.”

That is quite a departure from the sermonizing of Glenn Beck who would likely argue that that way there would be Socialism. Apparently they still have some kinks to work out.

The switch comes on the heels of Sen. Arlen Specter’s surprise jump to the Democratic Party after serving five terms as a Republican senator from Pennsylvania. Some view Specter’s move as an embarrassment to Republicans as they seek to regain their footing after losing badly in the last two election cycles. Others view it as an inevitable result of of the shrinking ideological spectrum within the Republican Party. Still others regard it as the hysterical act of radical Socialist who has been masquerading as a Republican for 30 years while leading a sleeper cell of covert Marxist revolutionaries bent on the submission of free people throughout the world.

But while some say some stuff and others say other things, associates inside the Specter camp, who have asked for anonymity to keep from being pointed and laughed at by strangers on the street, are saying that the Senator is merely hoping to hang on to his senate seat regardless of any consideration for politics or principles. An independent analyst was quoted as saying, “Duh!”

As for News Corp and Fox News, the new relationship, that they are still in the process of finalizing, will serve their interests better than those they have cultivated in the past. First on the agenda is the acquisition by News Corp of the Christian Broadcasting Network. CBN’s chief, Pat Robertson will be brought along in the newly created post of Senior VP of Editorial and Evangilism. The remaining News Corp enterprises will be re-branded as Fox Christian Ministries.

Although Specter’s jolt may have expedited the move by Murdoch and company, the move might have been predicted by many observers. Fox News has been drifting to what might be called a sort of Tele-Conservangilism™. Its message has increasingly been disseminated as if from a pulpit, complete with saints (Bush, Palin, Gingrich, and Pope Reagan) and a long list of demons (ACORN, Soros, Gun regs, Abortion, Muslims, Communism, FEMA camps, Fairness Doctrine, Taxes, Global Warming, Evolution, and, of course, the “mainstream” media). The anointed preachers for the movement were, and will continue to be, familiar names like Limbaugh, O’Reilly, Hannity, and Beck.

Look for Ailes to unveil the new party insignia in the next few weeks. Reports are presently leaking out that suggest that the top contenders all have something to do with tea.