Posts about newsbiz

Google officially enters the content business

The most significant news in Google’s launch of its finance service is that is licensing content from Reuters.

In each of its other endeavors — search, news, shopping, classifieds — Google has maintained an open, albeit uneven, playing field. That wouldn’t work in the case of finance because Google had to integrate data into its presentation and Reuters was wise and happy to sell it to them.

But what this means is that Google is no longer just an aggregator — which, I’ve argued, is a beneficial thing to be for content holders, because an aggregator makes links and links make traffic — but is now a destination that will hold users in and compete with other content.

Yahoo has been in this position for years, after it stopped being merely a directory and source of links (Jerry Yang once said at a meeting I attended that his job was to get people in and out of Yahoo as quickly as possible; that tune soon changed). Yahoo has licensed Associated Press wire content — over the objection of many of its members, for precisely this reason — and built a destination that tries to both keep people in and link out (see its new and rather uninspired local aggregator). The net result is that Yahoo is less effective at creating linked traffic than other portals.

Watch out as Google creeps, as Yahoo did, into the content business and competes with, instead of merely organizing, content. It’s a momentous move.

Newspaper stock and the paper it’s printed on

There’s more bad news in store for newspaper-company stockholders following the Knight Ridder sale. McClatchy is bound to find that the multiple it gets for the 12 big-city and no-growth-market papers it plans to sell will be lower than the less-than-steller multiple it paid for KR itself…. if it even manages to sell all of them.

This will raise the effective price McClatchy paid for the papers left, but it lowers the multiple the multiple analysts and stockholders will ascribe to newspapers. McClatchy is all the more committed to a shrinking industry and this will continue to hit its share price. The cutbacks the surviving, adopted KR papers avoided for the moment will come eventually. And the orphans are sure to be doing their imitations of Oliver at dinnertime soon. Bad news and more bad news.

And I’ll argue that the same effect is waiting to haunt other big, one-size-fits-all media companies as they are saddled with big costs while smaller, nimbler, more effective, targeted, and efficient competitors eat at them. Newspapers are the cash cow in the coal mine.

Janet Whitman explains it in the NY Post:

The dearth of bidders for Knight Ridder, which put itself on the block in November amid pressure from large investors unhappy with its weak stock price, reflects the uncertain prospects for the newspaper industry. Newer rivals such as the Internet are snagging readers and advertising dollars.

That could make it tough for McClatchy to fetch attractive multiples for the papers it hopes to sell. McClatchy acquired Knight Ridder for a multiple of less than 10 times expected cash flow, well below historic multiples 12 to 13 times for newspaper deals.

“We think the multiple paid is unlikely to produce much cheer for newspaper investors,” said Lauren Rich Fine, who follows the publishing industry for Merrill Lynch. She added that it “will likely cap multiples in the group for some time unless fundamentals improve.”

What’s the solution? There are no white knights left. What the industry needs now is tough, strategic management that drives the news business away from its dependence on paper to a very different future in any media. You have to shrink to grow.

: I just came across a media stock blog — appropriately shrouded in black — where the analysts are at war over this deal. The oft-quoted John Morton says it’s bad news; another says the big papers will get a higher multiple (can I have what he’s smoking?).

Change-agent Rupert

Rupert Murdoch is making it a habit to give barnraising speeches about the explosion of media. He gave this now-legendary speech to American newspaper editors and he just gave another to the wonderfully named Worshipful Company of Stationers and Newspaper Makers:

Rupert Murdoch last night sounded the death knell for the era of the media baron, comparing today’s internet pioneers with explorers such as Christopher Columbus and John Cabot and hailing the arrival of a “second great age of discovery”….

“Power is moving away from the old elite in our industry – the editors, the chief executives and, let’s face it, the proprietors,” said Mr Murdoch, having flown into London from New York after celebrating his 75th birthday on Saturday.

Far from mourning its passing, he evangelised about a digital future that would put that power in the hands of those already launching a blog every second, sharing photos and music online and downloading television programmes on demand. “A new generation of media consumers has risen demanding content delivered when they want it, how they want it, and very much as they want it,” he said….

“It is difficult, indeed dangerous, to underestimate the huge changes this revolution will bring or the power of developing technologies to build and destroy – not just companies but whole countries.”

The owner of Fox News added: “Never has the flow of information and ideas, of hard news and reasoned comment, been more important. The force of our democratic beliefs is a key weapon in the war against religious fanaticism and the terrorism it breeds.” ….

“I believe we are at the dawn of a golden age of information – an empire of new knowledge.”

But he combined his new-found enthusiasm for the digital future with a “change or die” message for the monolithic media empires of the 20th century.

“Societies or companies that expect a glorious past to shield them from the forces of change driven by advancing technology will fail and fall,” he warned. “That applies as much to my own, the media industry, as to every other business on the planet.” …

: And here is one of Rupert’s hacks, the political editor if Sky News, extolling the wonders of technology and journalism.

Behind the cameras

Here’s a story behind the story of Friday’s CBS Evening News report on the state of the media (to see the video, go here and scroll down).

When the producer called, it’s clear they had an angle in mind: citizens’ journalism vs. professional journalism. They asked for stories in which I’d gone up against big media. I told him that’s not the story now. I said the real story is how, with citizens’ help, journalism can and must expand with new ways to gather and share news. I said I’d seen a change in the last year, with professional and amateur journalists coming closer together to this realization.

They came to do the interview and we talked about a lot of the stuff you read here, like this, and this. But they didn’t use that, apart from one line about news not being finished when we print it, which is actually a line about Dan Rather.

Then we changed the setting to shoot the b-roll, the stuff that makes the pros pros in old-style news. Diggnation doesn’t have no stinking b-roll.

We stood in a colleague’s office and, with my laptop in hand, they asked me what I wrote about. I listed a bunch of posts, including this one, where I take Ted Koppel and Aaron Brown to task and I said that.

That ended up in the finished piece: me v. the big guys, it seemed. That fit the story they wanted to do, the one they started with: citizens v. professionals.

And the correspondent asked whether I got mad at the big-media folks with whom I so recently worked. I mocked the question and gave him a look you can’t see as I said, no, I merely get disappointed sometimes.

That, too ended up in the finished piece. That, too, fit the story they wanted to do rather than the one they got from me.

Now, of course, this happens all the time. This is what sours sources on the news. It’s no surprise to me. It’s no big deal, either. I’ve seen the sausage made. But I’ll say what I said to that correspondent: It disappoints me. I don’t care if they used more or different quotes from me. But I care about getting a story that’s not as shallow as videotape.

But evening news is the shallowest of news: Give us 22 minutes and we can’t possibly give you the world. And so this made me wonder what the proper role of the evening news should be in a new media world. Now I know that some will argue that the evening news still has a huge audience, compared with other individual outlets, and so why rock that boat. But that audience is getting ever-smaller and ever-older and the news universe around it is only exploding.

So what to do? There was a time when I said that CBS News should be sold. The Murrowites would burn me at the stake, but I could also argue that we just don’t need three shallow evening newscasts and it’s OK to kill one. And I could argue that the evening news should be a summary of other news: The Week magazine as a daily TV show telling me what the rest of the world is saying.

But now that CBS and my long-lost colleague Larry Kramer have embarked on their “cable bypass” strategy to make the web the news channel they never had, I think the CBS Evening News should become value-added to the web: It summarizes and promotes and follows the bigger stories that are online. The evening news stories don’t need to be simplistic, obvious, confrontational, condescending; they can be smarter. But they do need to be shallow, for there’s only so much you can say in 2:30. Yet that becomes more forgivable when their reason to exist shifts to being a gateway to the news.

So take a story like the state of the media. They can still go do their interviews, but they can put those interviews online and let us see — and remix — them. They can pose their question about a story and give us the tools to help report that story. They can follow the story as it grows and improves online. And from a business perspective, they can drive people to the future: to online. If newspapers must do that, then so must TV. Yes, the revenue isn’t there yet, but the audience is and the revenue will catch up when advertisers do.

Or they can keep making simplistic stories like the one about the state of the media that inspired this post. The real story about the state of the media isn’t what CBS aired, but what it didn’t air: The story of how broadcast TV without the web and without the public’s help there will continue to be shallow and shrinking and outmoded. The irony is that CBS News’ story about the state of the media is the best illustration of the state of old media.

: LATER: Andrew Tyndall, who watches TV news for a living, takes me a bit to task in the comments and I reply.

Those were the days, my friend….

The most quoted and quotable bit from Kurt Andersen’s interview with Time Inc. editor-in-chief John Huey:

Near the end of our breakfast, I ask about the Future of Magazines. “The big question in everyone’s mind [at Time Inc.],” he says, “is how much [of the present struggle] is cyclical and how much is secular.”

A lot is secular–that is, permanent. We would like to believe that Internet-versus-print is analogous to TV-versus-radio in the fifties: The new doesn’t necessarily wipe out the old. But I think paper media today are more like sailing ships around 1860–still dominant but enjoying their last hurrah. I think it’s late in the magazine era. “I hope not,” says Huey. “If I thought they were dead, I’d do something else.” My elegiac turn has made this funny, enthusiastic man a little morose. “And [Time is] something that most people in America want to see survive, even if they don’t know it.”

That’s like saying most people want me to be President, they just don’t know it. No, I’d say that Time is hardly a necessity of life.