Corporatization of the News Media

1
Corporatization of the News Media

• Profits v. Editorial Integrity
• Can they coexist?
• Critical Issues in Journalism and Global
  Communications, JMSC6002/March 2002
• D. Weisenhaus

2
Profits v. Editorial Integrity

• News is a business. It has always been so. --
  Taking Stock Journalism and the Publicly Traded
  Newspaper Company, 2001
• The present newspaper business model is deeply
  flawed. --William Woo, Stanford University

3
General questions

• Are there aspects of news production that should
  be off-limits to budget/company pressures?
• What can news departments do to enhance their
  profitability? Should they even think about that?
• What can editors and news directors do to protect
  integrity of reporting from business pressures?

4
History

• Separation of business and news is only about a
  century old. In 1800, most common name for US
  paper was The Advertiser!
• Purposes advertise commerce or promote partisan
  politics
• Joseph Pulitzer Dont teach business side of
  journalism because it would corrupt journalists.

5
Newspaper trends...

• As in Hong Kong, U.S. newspapers are privately
  owned and try to make profits
• Not licensed by government
• Do not receive government subsidies
• Are protected by law
• U.S., most newspapers are owned by shareholders,
  stock traded on Wall Street
• Trend toward chain newspapers. Gannett is largest
  with more than 100.

6
How profitable are newspapers? Until recent
recession, very profitable!

• In U.S., newspaper profit margins were 2-3 times
  the average for US manufacturing. 19-27 vs. 7-8
• investment in news coverage, declined 10, from
  1992 to 1997
• production expense down
• payroll down
• marketing up
• revenue/profit up

7
Hong Kong profits

• Ming Pao HK14 million loss for 6-month period
  ending Sept. 2001, down from HK49 million
  profits for same period in 2000.
• Next Media expected profits of HK210 million
  for 2001, down from HK 300 million for year
  2000.
• Oriental Press Group HK170 million for
  six-month period ending 2000.

8
Grand contradiction

• Media is commercially based or market driven
• Media in free society has crucial public
  function promote ideas and inform
• Protected by law

9
What is the business of news?

• The business of news is news. Growth of newspaper
  industry driven by publics appetite for
  news...News was product around which business was
  shaped. News was selected, presented and packaged
  in appealing -- and profitable -- ways. (comics,
  sensational headlines, extra editions, penny
  papers, news graphics)

10
Now?

• The business of news is business, not newsNews
  is shaped by audience rather than audience shaped
  by the news.
• Business of news is no longer providing broad
  public information to mass audience but providing
  specialized information to smaller and more
  profitable audiences.
• --Taking Stock

11
Conglomerates

• Six firms dominate all American mass media. Each
  is a subsidiary of a larger parent firm, some
  operating in other industries.
• AOL/Time Warner, General Electric, Viacom,
  Disney, Bertelsmann, News Corp.
• AOL/Time Warner worth 350 billion, 100 million
  global subscribers, 75 million cable homes, 30
  magazines

12
Pro v. Cons of Big Business

• Pro more resources, more distance between
  advertiser and editorial content, more power
• Con more resources to protect, less concern over
  editorial integrity, no accountability to
  community
• Any more arguments?

13
How to rectify?

• Civic journalism? Booster vs. watchdog?
• Antitrust laws?
• New business models?

14
New Business Models

• Newspapers owned by nonprofits. St. Petersburg
  Times owned by Poynter Institute. Problem Hard
  to start. Need owner to set up foundation like
  Nelson Poynter.
• Green newspapers Investors willing to accept a
  lower rate of return on stocks in socially
  responsible corporations.
• Tax breaks for investing in newspapers.

15
Go back to Core Values?

• Integrity, fairness, accuracy, full disclosure,
  sound news judgments
• 1) obligation to the truth
• 2) serve public interest first
• 3) monitor powerful/offer voice
• 4) provide forum for comment, criticism
• 5) maintain independence
• 6) make news engaging, relevant
• 7) keep news comprehensive, proportional
• 8) remain true to personal conscience