Monthly Archives: April 2013

Can journalism get by without advertisers?

By Christopher B. Daly 

Why should journalism depend on advertising? There is nothing logical, necessary or inevitable about it.

Originally, advertising was a trivial source of income for 18th Century newspapers. Instead, readers supported those newspapers by subscribing for fixed (and pretty lengthy) periods. there were few if any newsstand sales. That model worked for more than a century.

It was only in the 19th Century that newspaper publishers began seeking and relying on advertising revenues. This coincided with an explosion of spending on ads, so there was plenty of money sloshing around to allow newspapers to expand. By the end of the 19th Century, many newspapers derived half or more of all their revenues from ads.

When broadcasting came along in the 20th Century, most radio and television operations could not find a way to get their audience to pay, so they became almost completely dependent on advertising income. (NPR and PBS are exceptions; they depend on a shifting mix of foundation grants, “sponsors,” a shrinking direct government subsidy, and the direct financial support of “viewers (and listeners) like you.”)

There, in broad strokes, is a big part of the current existential crisis facing all the “legacy” media with a foot in the pre-digital past. They arose under a set of conditions that no longer exist. Advertisers have reduced their spending overall, and they have reallocated the remaining ad buy so that they can buy a growing amount of space online. They are not coming back to print or broadcasting.

So, if advertisers cannot be depended on to fund journalism, who’s left?

One answer is pointed to by David Carr in his column today. Ostensibly, his column is about HBO and the success of such tv “auteurs” as the creators of The Sopranos and The Wire. Carr observes that HBO never depended on ads, so HBO’s executives never had to worry about what kind of programming advertisers would accept. Instead, the only constituency they had to please was viewers, who flocked to the better (if violent) programs. It was a case of “viewers to the rescue.”

From Carr’s column:

As it turned out, what had been holding television back was not the audiences, but the advertisers. HBO, freed of those bonds as a pay TV service, bet on a show about a fat, conflicted gangster who spent time in a shrink’s office when he wasn’t ordering up murders from the back of a strip club called the Bada Bing.

HBO had figured out that the strategy followed by broadcast networks — trying to please all of the people at least part of the time — was a losing formula for a pay service. Instead it began producing remarkable programming for a discrete audience that would pay a premium for quality. That audience has ballooned to some 30 million viewers and turned HBO into an A.T.M. for Time Warner, a lesson that was not lost on other cable channels. This revolution will continue to be televised.

In cable TV, unlike traditional broadcasting, money comes from “subscribers” — i.e., you and me and everyone else who overpays Comcast or Verizon or some other cable provider. All our monthly bills go into a giant pot, and cable providers turn around and dole it out to the suppliers of programming — X for ESPN, Y for all the NBC properties, Z for Fox, and so on. The details are the result of negotiations based mainly on who’s hot and who is bringing in the biggest audience.

HBO is just one example of a model that could be used to pay for all sorts of creative and valuable original materials. Consider: if I buy a song on iTunes, there is no jingle that I have to listen to first (or in the middle!). If I buy a book, there’s no ad on page 178. In those markets, I expect to pay the full amount, without a  subsidy from advertisers.

Can the journalism that has been brought to us by newspapers, magazines, and television be funded without advertising?

Stay tuned.

 

 

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Terror suspects’ parents

By Christopher B. Daly

Is it just me? Or does something about the body language of the people in this photograph seem wildly inauthentic?

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(Photo: Dmitry Kostyukov for The New York Times)

I ask myself: If my wife and I had to conduct a press conference under similar circumstances (which, granted, is a big stretch), would we carry on like that? What is really up with these folks? This looks like a scene from a “Borat” film. It looks like a parody of two distraught parents. They seem to be saying “Up yours!”

Does anyone else find this odd?

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Readers to the rescue! NYTimes gains in circulation

By Christopher B. Daly 

Yes, the New York Times company reported a sharp drop in earnings this week.

Yes, the figures for advertising revenue were wretched and getting worse.

BUT, buried in the financial details, there is some potentially important good news: Money coming in from circulation is rising. In fact, it rose 6.5% in the first quarter of this year compared to the same quarter a year ago. Therein may lie the salvation of the most important news organization in the country.

The reason is that “circulation revenue” is all the money coming in from the subscriptions to the traditional print edition, the dollars paid by folks picking up a copy of the Times at newsstands, and — most important of all — the money coming in from digital subscribers who bumped into the Times “paywall” and decided to pony up and pay for full access to the Times online. They are important because they are the future. In the digital era, the key metric is whether you can make money online. Historically, newspapers depended on a “dual revenue stream” of money coming from both circulation and advertising. For more than a century, both sources increased, and they fluctuated around a ratio of 50/50 in terms of total revenues.

If the Times can continue to gain readers who will pay, then there is no reason it could not sustain itself mainly on the basis of its own readers — who are, ultimately, a better base for journalism than advertisers. Thank you, Tiffany and Bloomingdales, and may your ad spending continue. But ultimately, the Times might be better off if it were funded like the old PM newspaper, or I.F. Stone’s Weekly, or NPR, or the AP or other news organizations that do not depend on advertising.

According to the latest figures, readers now account for a majority of the Times revenues.

Here’s a chart from the company’s press release.


First Quarter
2013 2012 % Change
Revenues
Circulation $ 241,789 $ 226,994 6.5 %
Advertising 191,167 215,234 -11.2 %
Other(a) 32,977 33,204 -0.7 %
Total revenues 465,933 475,432 -2.0 %

When I looked at the numbers more closely, here’s what I found on a percentage basis:

First quarter

[                                 2013               2012

Revenues

Circulation             51.8%          47.7%

Advertising            41.0%          45.2%

Other                          7.1%             6.9%

So, it appears that “the people formerly known as the audience” are pointing the ( or a?) way forward.

Readers to the rescue!

chart

This chart (which I customized using a tool on the NYTCo corporate site) shows how the NYTCo stock has performed in the last six months, compared to the Dow Jones average, which has been on a tear. 

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“Historians Still Despite George W. Bush”

By Christopher B. Daly 

“Now, there are some who would like to rewrite history - revisionist historians is what I like to call them.” -- George W. Bush

“Now, there are some who would like to rewrite history – revisionist historians is what I like to call them.” — George W. Bush

That’s the headline on a piece in the latest History News Network website, reporting the results of a flash poll of elite historians timed to coincide with this week’s opening of the new George W. Bush presidential library.

(Actually, it’s the George W. Bush Presidential Library and Museum, dedicated Thursday on the campus of the private religious school Southern Methodist University in Dallas. Like all 13 U.S. presidential library+museum complexes, it is administered by the National Archives and Records Administration. At all these operations, there is an inherent tension between the desire of the families and supporters to lionize our ex-presidents and the professional obligation of the NARA to preserve everything and make it all available to the public and to scholars.)

Back to the historians: they really can’t stand Bush, and they grade him about as harshly as possible. (Memo to future presidents: Invading the wrong country is never good for your reputation.)

The History News Network conducted an informal poll on Thursday asking American historians from the nation’s top research universities and liberal arts colleges to grade the presidency of George W. Bush on an A-F scale, based on fourteen different metrics, ranging from foreign policy to the economy to transparency and accountability.

Sixty-four historians responded. Thirty-five — over half — rated his presidency an outright failure.

“Thank you, God, for this opportunity,” one professor, a faculty member at one of the service academies, wrote in a comment. “He was not qualified to be president and it showed for eight long years.”

But Bush, famously unreflective, professes nonchalance. He spoke this week to CNN national correspondent John King (yes, the same John King who mis-reported a key part of the Boston Marathon bombing case).

An excerpt:

GEORGE BUSH: History will ultimately judge the decisions that were made for Iraq. And I’m just not going to be around to see the final verdict.

KING: Not going to be around. That’s an interesting way to put it. You…

GEORGE BUSH (laughing): In other words, I’ll be dead….

Bush said something similar when he was asked a similar question by Bob Woodward in late 2003. Asked by Woodward about how history would judge Bush’s decision to invade Iraq, Bush said: “History. We don’t know. We’ll all be dead.”

True that.

Here’s the Bush report card from the top historians:

HNN contacted faculty members who list American history as a research interest at the top twenty-five graduate programs in history and the top twenty-five liberal arts colleges in the United States, as ranked by the U.S. News and World Report in 2013.

Respondents were asked to grade President Bush on the following metrics (the average letter grade accompanies each metric) and provide justifications for their marks:

Overall (not a composite):  F 0.70
Communication ability D- 0.94
Relationship with Congress C 2.06
Supreme Court appointments D 1.09
Handling of the economy F 0.57
Executive appointments D 1.26
Diplomacy & foreign policy F 0.57
National security D- 0.82
Civil rights & civil liberties D- 0.90
Innovation and initiative D 1.14
General leadership D 1.04
Vision D 1.06
Transparency & accountability F 0.70
Integrity D+ 1.45
Crisis management D 1.00
Ability to learn from mistakes D- 0.82

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Should corporations enjoy free speech?

By Christopher B. Daly

For no good reason, our laws (both legislative and the common-law, judge-made type) have been moving in a while in the direction of recognizing corporations as “persons” and granting them most of the benefits of being a person, while sparing them most of the downsides (like dying, paying taxes, and feeling inadequate).

The latest flash point in this development involves a petition campaign to try to use the power of government to force corporations to divulge how much the spend on political campaigns and who gets it. Such a move would limit the free-speech rights of corporations — but only to the limit already imposed on us actual living persons. As matters stand, a real live human being who donates to a political campaign has to do so knowing that the donation will be a matter of public record, available for inspection in the records of the Federal Election Commission.

But not corporations. (They’re so sensitive!) No, they are enjoying the “right” to free speech without the responsibility of disclosure. That’s why they were able to spend hundreds of millions of dollars in the last election cycle to influence our politics (translation: to elect Republicans) without having to inform anyone. That includes two very important groups:

1. The shareholders. In theory, the management of every publicly traded corporation has a legal responsibility to maximize shareholder value. Some shareholders may believe that such a duty does not extend to dropping millions of their dollars into the campaign treasuries of political candidates.

2. The customers. In theory, consumers have power that they can exercise over companies who do things they don’t like, but only if they can find out what’s going on. One reason that corporations like to exercise their free-speech “rights” in secret is so that they don’t have to face backlash and boycotts from angry consumers.

All of this can be remedied with a simple change: The Securities & Exchange Commission, the federal agency that oversees U.S. corporations, could simply require corporations to publicly disclose their political donations. That is no more onerous than what is required of you or I as an individual. In fact, the five SEC commissioners have a petition pending before them asking them to do just that. I hope that the three Democrats on the panel will find the gumption to do just that. (I have no hope that either of the two Republicans will do so).

I’m not familiar with SEC rule-making. I found this page that records comments that have already been received. I don’t see any way to comment on-line. So, I would urge you to scroll over the phrase “Type A,” print that out, and send it by snail mail to the SEC. I’m sure that if I were a corporation, I could figure this out.

For the record: I am not convinced that a corporation (a legal fiction created by the state to serve social purposes) has any rights, but I am certain that they do not have more rights than you or I.

Sheesh.

Here’s the text of the comment in support of the petition:


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The following Letter Type A, or variations thereof, was submitted by individuals or entities.

Letter Type A:

I am deeply concerned about the influence of corporate money on our electoral process.

In particular, I am appalled that, because of the Supreme Court’s ruling in Citizens United v. Federal Election Commission, publicly traded corporations can spend investor’s money on political activity in secret.

I am writing to urge the Securities and Exchange Commission to issue a rule requiring publicly traded corporations to publicly disclose all their political spending.

Both shareholders and the public must be fully informed as to how much the corporation spends on politics and which candidates are being promoted or attacked. Disclosures should be posted promptly on the SEC’s web site.

Thank you for considering my comment.

 

 

http://www.sec.gov/comments/4-637/4637-26.htm


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Modified: 01/19/2012

 

 

 

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The bombing case: “Total Noise”?

By Christopher B. Daly 

Here is a fine piece that features the author Jim Gleick thinking in print about the coverage of the Boston Marathon bombing and related events. (Full disclosure: I have known Jim since we were in college together, and I admired his books Chaos and The Information; I am not currently in touch with him.)

Gleick’s piece from New York magazine was also noticed by Maureen Dowd in her column today. She added value by actually taking him out for coffee and interviewing him.

Photo montage by New York magazine (including photo by BU student journalism Kenshin Okubo).

Photo montage by New York magazine (including photo by BU student journalism Kenshin Okubo).

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CNN gets it wrong

By Christopher B. Daly 

In his column in today’s New York Times, David Carr analyzes CNN’s self-inflicted wound caused by wrongly reporting the arrest of a suspect in the Marathon bombing case. In doing so, Carr makes some of the same points I made here last week in this post. The problem is how to gather news while the public is watching.

There’s no real answer, of course, except for everyone to do better.

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