Its on - Rupert Murdoch to introduce pay online news

Today saw Rupert Murdoch's News Corporation announce one of its largest corporate losses in history. Details from ABC News are below:

The global economic downturn has had a huge impact on News Corporation's results, with Rupert Murdoch announcing a 30 per cent decline on last year's performance.

News Corp reported a fourth quarter loss of $US203 million ($241 million), in line with its forecasts.

Across the fiscal year the company recorded a $US3.4 billion ($4 billion) loss.

Mr Murdoch says newspapers have been hit particularly hard, with classified advertising never expected to return to previous levels.

"The last year has been one of the toughest in our history and the results today outlined for fiscal 2009 clearly reflect the sour economic environment that affected our businesses throughout the year," he said.

But Mr Murdoch says he is confident the worst is behind the company.

Mr Murdoch has also indicated that access to News Corp material on the internet may soon come at a price.

"The extended downturn has only increased the drum beat for change, but the secular challenge is clear," he said.

"Classified advertising revenues will never again reach the levels that print once offered.

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

The big news is that Rupert Murdoch has indicated that all News Corporation online news sites will become fee-based in the near future:

"The digital revolution has opened many new and inexpensive distribution channels but it has not made content free. We intend to charge for all our news websites."

...

At present, only the Wall Street Journal charges a fee for online access and until recently, received wisdom in the publishing industry was that readers would not pay to read newspapers on the internet.

Murdoch said he had completed a review of the possibility of charging and that he was willing to take the risk of leading the industry towards a pay-per-view model: "I believe that if we're successful, we'll be followed fast by other media."

He said he was thinking in terms of "this fiscal year" to introduce charges. He said News Corp would avoid a migration of readers to free sites by "making our content better and differentiated from other people".

The charging model will be extended to red-top tabloids such as the Sun and the News of the World. Murdoch said he was keen to capitalise on the popularity of celebrity stories: "When we have a celebrity scoop, the number of hits we get now are astronomical."

As Bobbie Johnson observes in The Guardian:

A divisive split has emerged between those who believe that readers must be forced to pay for access to stories or see traditional reporting disappear altogether, and those who believe that a great deal of the information we consume each day is merely a commodity, and journalism must adapt itself to the changing environment.

News Corporation is at the forefront of the former camp, and plans are well advanced to make news on News Corp sites available onto on a fee-paying basis. Jeff Jarvis thinks that this won't work, as it misunderstands the nature of value creation through the Internet:

Newspapers have had 15 years since the launch of the internet browser to reimagine and rebuild themselves for the reality of the post-Guttenberg age. But they didn't. Now they are trying to reclaim old business models for a new media economy — a link economy, I call it, in which links give content value. Cut yourself off from links, behind pay walls, and you cut yourself off from the internet and its real value.

With any radical change to business models of this nature, some of the issues to be considered are:

• Consumer reaction: will consumers simply shift en masse from News sites to other sites that provide free news content?
• Competitor reaction: how will sites such as the Fairfax sites in Australia, or The Guardian in the UK, respond? The role of public service media is another factor here - the ABC and BBC are almost certain not to go down this path;
• Advertiser reaction: will advertisers identify potential "premium clients" here, or simply migrate to where the consumers are going, if they leave News sites for free content?
• Implications for different News properties: fee-based access to the Wall Street Journal can be profitable. But does this apply to The Sun, The Australian, The Courier-Mail, the Hobart Mercury etc.?
• Implications for News journalists: if news is understood as a low-value-adding commodity, then status differentiations among journalists are not so great. But if there is a need to produce content that people will pay for, will this leave a small cadre of "star" journalists, and mass layoffs for those who provide everyday news content?

News Limited has being laying off journalists and other news staff in Australia, and this would be likely to continue under a pay-per model. There is also the interesting point, which was considered in Tech Crunch last week, of whether "star" journalists - those whose content attracts a personal following that readers would be willing to pay for - are better off leaving large flagship newspapers and starting their own sites, hoping to take readership and advertisers with them. Harvard Business Review blogger Umair Haque has been thinking along similar lines with his Nichepaper Manifesto.

(Hat tip to Tim Mansfield for the latter).

Overcooking Neoliberalism: Des Freedman's The Politics of Media Policy

I have observed that the term neoliberalism is in my view over-used, and has lost much descriptive clarity as it has become something of an omnibus term of abuse for anything or anyone who you happen to disagree with. Increasingly, the term functions in much the same way as the word "bourgeois" did for radicals in the 1970s.

In order to clarify with an example, I have provided a link to a review I have undertaken of Des Freedman's The Politics of Media Policy (Polity Press, 2008). An edited version of this review of Des Freedman's The Politics of Media Policy appeared in Australian Journalism Review, Vol. 30 No. 2, December 2008, pp. 127-129. This journal, however, which can be hard to find online, as the Web site is four years out of date (NB: this link may not be accessible to you - I got it from the Informit database which QUT subscribes to).

My conclusion on Freedman's book was:

The Politics of Media Policy opens with a highly insightful analysis of how to do media policy studies in original and significant ways. Unfortunately, by anchoring its empirical analysis closely to a desire to expose the hidden machinations of neo-liberal ideology, it loses focus the more that it moves out of the dominant terrain of political economy in the study of media ownership. Des Freedman has pointed to important new directions in media policy studies, but has unfortunately only got half way to developing a new synthesis for understanding the relationship between policy institutions and broader ideas.

For more read here.

Democracy, Participation and Convergent Media

Democracy, Participation and Convergent Media: Case Studies in Contemporary News Journalism in Australia

View more presentations from Terry Flew.

Beyond Globalisation

My paper Beyond Globalisation: Rethinking the Scalar and the Relational in Global Media Studies has just been published in Global Media Journal: Australian Edition.

Earlier versions of this paper have been presented at the World Communications Association conference in July 2007, the Seoul Symposium on Mobile Communication in October 2007, and the International and Intercultural Communication in the Age of Global Media conference at Monash University in August 2008.

Thanks to Hart Cohen for his support with this publication, and to Caroline Hatcher, Song Gi-Baek and Ron Gallagher for their invitations to present at these events.

The abstract for this paper is below, and the full paper can be accessed here.

This paper traces how the concept of globalisation has been understood in media and communications, and the ongoing tension as to whether we can claim to be in an era of ‘global media’. A problem with this discussion is that it continues to revolve around a scalar understanding of globalisation, where the global has superseded the national and the local, leading to a series of empirically unsustainable, and often misleading, claims. Drawing upon recent work in economic and cultural geography, I will argue that a relational understanding of globalisation enables us to approach familiar questions in new ways, including the question of how global large media corporations are, global production networks and the question of ‘runaway production’, and the emergence of new ‘media capitals’ that can challenge the hegemony of ‘Global Hollywood.’

Social Media and Journalism in Iran

Interesting piece by Brian McNair on social media and journalism in post-election Iran:

Current events in Iran exemplify what I called in a 2006 book, ‘cultural chaos’. A ruling authoritarian elite struggles to maintain control of information and political dominance in a world where online media and satellite news threaten to make everything it does visible to a global audience.

Internally, Iran’s protesters Google, Twitter and Facebook around the censorship, countering the propaganda which fills state media coverage and organising their opposition. The oppressive order of Islamic fundamentalism becomes the dynamic chaos of emerging democracy, and culture - communication - is the catalyst for that phase change.

As I write, the outcome of the protests is uncertain. But there is no doubt that Mahmoud Ahmadinejad’s hold on power has never been more fragile. The Iranian state tries to disrupt email and social networking sites. Mobile phone networks are blocked and satellite dishes confiscated, but those attempts merely add more fuel to the story as reported by a globalised, always-on media, stirring up further revulsion and anger at home and abroad.

In this sense, the globalisation of news media, and the explosion of online means of communication which are, by design, very difficult for authoritarian regimes to control or destroy, is a democratising force. It erodes the barriers which those regimes erect around their countries, breaks their quarantine, raises the global political cost of their behaviour. It brings chaos, but in a good way, the way that leads to the birth of something better.

The presence of new kinds of media is not enough in itself to guarantee progressive change, or to create the public mood which demands it. In the case of Iran, the arrival of Barack Obama and his conciliatory overtures appears to have strengthened the opposition. The parlous state of the Iranian economy has been a domestic issue for a long time, and the sheer extremism of Ahmadinejad’s version of Islam can only provoke resistance in a country with Iran’s cosmopolitan history.

But the impact of these underlying factors is amplified by the globalised media, which give them heightened visibility and force. Everything plays out before a global audience, in BBC and CNN bulletins, or on Al Arabiya and Al Jazeera. Iranians themselves, many of them, are part of that audience, and take strength from the knowledge that the eyes of the world are upon them as they fight for personal freedom and human rights.

This is what happened in Tiananmen Square twenty years ago, when Kate Adie and her media colleagues covered first the pro-democacy protests, then the massacre which followed. The Chinese communists won that battle, but they lost the war, and to this day are still shamed by their actions.

The global media were in Eastern Europe in the velvet revolutions, and in Moscow during the failed coup of 1991, lending their publicity to popular uprisings.

But in Iran, two decades on, there is another factor at work. Alongside the professional journalists and foreign correspondents are armies of ordinary people, armed only with mobile phones and digital cameras, Twitter and Skype accounts, Facebook and MySpace profiles.

While John Simpson and the rest are locked in their hotels, effectively prisoners of the regime, young Iranians keep a flow of uncensored news pouring out of the country – citizen journalists if you like. They are connected to the world beyond, in a way that previous generations of protesters have not been.

Brian McNair is Professor of Journalism & Communication at the University of Strathclyde.

Times shuts down blog

Jean Seaton at the University of Westminster has written in The Guardian about a court action undertaken by The Times in the UK to expose who the anonymous blogger was behind the well-regarded Night Jack police rounds blog. This case was also discussed at Larvatus Prodeo.

As soon as the High Court ruled yesterday that police blogger NightJack could be named , the Times triumphantly did so. An earlier injunction, which perhaps was to let an ordinary bobby not equipped with the press defence equipment of a celebrity have time to prepare for the onslaught, was overturned. The Press Complaints Commission to which he had appealed had provided no assistance at all.

We hope that Detective Constable Richard Horton won't lose his job, although he has been through what may be one of the fastest disciplinary processes in police history and been given a written reprimand. He has already been doorstepped by photographers and his award-winning blog has disappeared – and a window that had opened on to the way in which policeman go about their work, bristling with insights into contemporary Britain, has been slammed shut.

In a rather Orwellian way, history is being rewritten – it is as if it had never existed. Horton won the Orwell Prize for blogging because in an increasingly competitive field he offered such a distinct voice. And because it took you to the heart of policing in a gripping way: it was old-fashioned reporting but in the new time frame of an unfolding story. In particular it reeked of somewhere local, regional, a particular part of Britain as well as the particular place of being a policeman.

The Orwell Prize judges – Jenny Abramsky, Ian Jack, Ferdinand Mount and Geoffrey Wheatcroft – pounced on this blog: it was, indeed, in the public interest and fulfilled Orwell's ambition "to turn political writing into an art".

Before Horton's entry to the prize went forward we did, in fact, check rather carefully that he was what he said he was. He did not come to the prize giving, and the money went to the Police Benevolent Fund (I saw the cheque being made out).

Blogging anonymity has to be tested in various ways. But, surely what matters is the accuracy and insight of the information. No one has disputed what this blog said: it was not illegal, it was not malicious. Indeed, in a world where local reporting is withering away as the economic model for supporting it disappears, we know less and less about our non-metropolitan selves and this lack of attention will surely lead to corruption. So this blog was a very good example of reporting bubbling up from a new place.

What is puzzling is the Times attack. The paper has made an intelligent use of blogs, and has been good at fighting the use of the courts to close down expression. NightJack was a source and a reporter. They would not (I hope) reveal their sources in court. Even odder is their main accusation against him: that the blog revealed material about identifiable court cases. The blog did not do this – cases were disguised. However, once the Times had published Horton's name then, of course, it is easy to find the cases he was involved with. The Times has shut down a voice.

Blogs as a form are no more reliable or "true" than any other kind of journalism. That is why we started a blog prize – to try to help people to find the interesting ones. This decision damages our capacity to understand ourselves just when we need new forms to develop. After Tuesday's ruling, would you blog about your workplace?

• Jean Seaton is director of the Orwell Prize and professor of media history at the University of Westminster

ABC Regional Hubs and Hyper-Local Citizen Journalism

Its not often that I find myself in agreement with columnists in The Australian, but Mark Day's analysis of the Federal Government's decision to support the ABC in developing online regional hubs is to me pretty valid. The decision has been criticized by regional media interests such as APN, Prime Television and Rural Press (owned by Fairfax Media) but, as Day notes in relation to hyper-local online media hubs, "Where have the APN and Rural Press people been these past 15 years?".

The decision is consistent with recommendations made by Stuart Cunningham, Axel Bruns, Jason Wilson and myself to the Department of Broadband, Communications and the Digital Economy's Review of National Broadcasting in the latter part of last year. It points to the affordances of new digital media technologies in re-scaling the mandate of public broadcasters to the local and regional and not simply the national, while also opening up new opportunities for including citizens as media participants in ways that Web 2.0 technologies allow.

The Citizen's Voice: Albert Hirschman's Exit, Voice and Loyalty and its Contribution to Media Citizenship Debates

Paper presented to the Philosophy of Communication Division of ICA on 22 May, 2009. Full paper available here, and it will appear in the Sage journal Media, Culture and Society shortly.

The Citizen's Voice: Albert Hirschman's Exit, Voice and Loyalty and its Contribution to Media Citizenship Debates

View more OpenOffice presentations from Terry Flew.

Pressure on the Presses

An interactive guide from the Wall Street Journal on the sustained crisis that has been facing U.S. newspapers from 2006 to the present.

This is from the Asian edition. Not sure of there is the same enthusiasm for reporing on these development in the U.S. edition.

Which way for News Corp in 2009?

There has been a lot of discussion about staff layoffs and alleged "dumbing down" of Fairfax newspapers in recent months, with a good deal of the discussion led by News Corp's national flagship newspaper The Australian.

This week sees the announcement of News Corporation's quarterly results for end-2008, and it could have considerable implications for News's Australian newspaper operations for 2009 and beyond. Note the view in this SMH article that investors increasingly view newspapers as a "legacy asset".

When the economy cratered last September, News Corp Chief Executive Rupert Murdoch quickly told investors his media empire would feel the pain.

After that, silence. With a week to go until quarterly results, investors wonder how bad things will be and are girding for sharper-than-expected profit declines, asset writedowns and perhaps more severe job cuts.

Punishing drops in the stock market, coupled with a slump in advertising spending, make it likely that News Corp will join peers such as Time Warner Inc and CBS Corp forced to revalue the assets on their books, analysts say.

So far, Murdoch has resisted big cuts for his 60,000-plus employees: News Corp has made limited cuts, including several hundred jobs at Fox Interactive Media, home of the MySpace social network. Media reports say more are on the way at The Wall Street Journal and New York Post newspapers, while Australian newspapers are also trimming staff numbers.

If Murdoch wants to keep the business healthy, it is time to make "hard decisions" and prune older media like papers, Pali Capital analyst Rich Greenfield said.

"We are concerned that the News Corp growth story, propelled by cable networks and Sky Italia, will be far less exciting over the next few years," Pali Capital analyst Rich Greenfield wrote in a note.

"It just feels like the legacy assets are weighing too heavily," Greenfield added in an interview. "I think they've been the most aggressive in trying to develop businesses with long-term returns on capital...where others initially didn't believe or thought the start-up costs were too high."

Journal cuts

One unit seen ripe for a writedown is Journal parent Dow Jones, which News Corp bought in 2007 for $US5.6 billion ($8.8 billion), or a 65% premium to its market value then. More recently, News Corp has been trying to cut costs at Dow Jones, including freezing employees' salaries this year.

US newspaper publishers have seen their shares lose half to nearly all their value in the past 12 months, prompting some to write down 20% or more of their assets.

Besides The Wall Street Journal, which has typically performed better than other newspapers, Dow Jones also counts local US papers, the Dow Jones Newswires, the Barron's financial weekly among its assets. News Corp also owns The Sun and Times of London and The Australian.

UBS analyst Michael Morris pointed to a $US25 billion writedown at Time Warner and a $US14 billion one at CBS. Assuming News Corp writes off a similar percentage, he estimated that it could write down $US10 billion, or about a sixth of its assets.

"In particular, we see possible issues at the broadcasting and publishing businesses, including Dow Jones," he said.

A writedown would not affect News Corp's daily performance, but it would be an admission the company paid more for acquisitions than it should have. That in turn could weigh on the stock price.

Bad news

News Corp's shares have fallen 67% in the past 12 months, underperforming peers such as Time Warner, Viacom Inc and Walt Disney Co.

Murdoch in recent months managed down shareholder expectations. In a statement in November, he said operating income would fall in the low to mid teens percentage points, instead of rising 4% to 6%.

He also warned that weaker overseas currencies, particularly the euro and pound, could hurt the New York-based News Corp. A little more than half its fiscal 2008 revenue came from North America and about a third came from Europe.

Many media companies have warned of more advertising sales declines. Magazine publisher and broadcaster Meredith Corp said automotive ad sale pacings are down 70% this quarter - a dire sign for companies such as News Corp.

Wachovia analyst John Janedis expects a 26% drop in operating income for fiscal 2009, which ends on June 30. Greenfield forecast a 30% drop, along with an 80% decline in TV profits.

Barclays analyst Anthony DiClemente forecast a 35% drop in revenue for News Corp's Fox TV stations in the second half of fiscal 2009.

In recent years, investors tolerated Murdoch's love of newspapers because his cable, satellite and interactive businesses were growing.

But MySpace competitor Facebook is grabbing more share of the Internet social media space. And Sky Italia's satellite business could suffer because of the weaker euro and a troubled Italian economy.

As if that were not enough, MySpace's $US900 million Internet search advertising deal with Google Inc expires in 2010, about the time economists expect the markets to recover.

"We do not believe a new Google search deal is likely to be as favorable," DiClemente said.

Jay Rosen to Barack Obama: Be yourself!

Some interesting speculations by Jay Rosen on his PressThink site about the future shape of government/media realtions under the Obama administration in the U.S.

The thing he is pretty sure of is that they will have to be less opaque and dismissive than those of the Bush/Cheney years:

What is over? The idea of one interlocutor, the White House press corps, acting as our quasi-official watchdog, and an oligopoly of firms—Big Media—through whom news of the presidency flows. That’s over. The big firms are not done; they still have serious pipe going out to homes and bars. But their world is shifted. The White House can go direct—that’s what whitehouse.gov is—and people can go direct (in certain limited ways) to the White House. Control over the sphere of legitimate debate is more widely distributed. The presidency has never had a participation wing, but this seems to be under discussion. Who knows where that goes. Today, however, the White House started blogging.

Behold the communications operation at 1600 Pennsylvania Avenue. It is a broadcaster and media company in itself, with global reach and an unstoppable brand. The White House briefing room, where the press is informed and asks questions, is sacred space for projecting American power and explaining the president’s positions around the world. Making a farce of that space, as Bush did, is not in American interests. Recovering civil and truthful uses for it is.

For more read here.

The ABC - and SBS - of Social Innovation

Public service broadcasting was one of the great 20th century social innovations in media. The aim of public service broadcasters (PSBs) was to seek to harness the new mass media towards social purposes. These included nation-building, mass education, strengthening the information base of democracies, and broadly-based cultural improvement, particularly in areas such as documentaries, news and current affairs and children’s programming.

Public service broadcasters have been major generators of social innovation. Social innovation refers to those forms of social and cultural value that are generated over and above commercial benefit to providers and the benefits to the users or audiences. Given that institutions that generate social innovation are often publicly funded, the tricky question is always to work out whether the less tangible social returns exceed the cost to taxpayers, and whether the value is maintained over time as cultural expectation and technological affordances change.

In the case of PSBs, three messages seem to come through. First, the key to the PSB model is not government funding per se – governments have funded broadcasters from Albania to Zimbabwe, with very mixed results – but the combination of public funding and a degree of independence and autonomy from the government of the day.

Second, a relationship with commercial broadcasters that is both complementary and competitive at some levels seems most conducive to innovation, as it forces PSBs to be more responsive to their audiences, and less inclined to adopt a ‘we know best’ mentality, while at the same time promoting their distinctiveness from the commercial sector.

Finally, the role played by Charter in making broadcasters such as the ABC and SBS accountable to Parliament is vital. Charters provide performance benchmarks that move the rationale for PSBs from market failure (providing what the commercial services don’t) to combining provision of specialist programming with the need to be innovative and responsive to community expectations.

The Department of Broadband, Communications and the Digital Economy (DBCDE) recently called for public submissions into the future roles and responsibilities of the ABC and SBS as Australia’s national broadcasters. The DBCDE Review has been read at one level as a move by the Rudd government to draw a line under the ‘culture wars’ of the Howard years, where debates about perceived ideological bias were seen as permeating the relationship of government to the PSBs – especially the ABC – at all levels, from funding to Board appointments.

More generally, however, the Review of National Broadcasting is being undertaken at a time when the remit of public broadcasters worldwide is being looked at. In contrast to the 1990s, where much of the debate was about whether they are still needed as cable and satellite TV and the Internet lead us to a multi-channel universe, the debate is now about how best to reconfigure their mission in a media environment where users increasingly expect participation, interactivity, and content on demand from any digital media device at any time and place.

The ABC has been a national leader in the provision of online media, with its content-on-demand iView service attracting massive traffic for TV over the Internet, but this comes at a cost. In contrast to radio and television, where the cost of reaching each additional consumer is zero to the broadcaster once infrastructure is in place, the cost in terms of network time and capacity for allowing existing content to be accessed online increase with a growing number of consumer. This is before any consideration is given to committing resources for developing Web-only media content. Public service broadcasters do not have online provision within their Charter obligations, and are funded to only a limited extent – and in the SBS’s case not at all – to provide it to Australians.

In a submission that I co-authored with Stuart Cunningham, Axel Bruns and Jason Wilson for the Review of National Broadcasting, we propose that the ABC and SBS should be understood as public service media. This is not only an accommodation to the 21st century reality of media convergence, but it emphasizes how it is the services provided, rather than the delivery platforms on which they are carried, that is at the core of pubic support for the ABC and SBS today. It also indicates that the basis for supporting public service media is not simply that of market failure in a limited channel environment, but the capacity to promote innovative, engaging and inclusive Australian information and entertainment content in a world of seemingly limitless media choice.

This vision of public service media is framed by a larger understanding of social innovation in the 21t century. At the time when public service broadcasters were first established, social innovation was largely understood as something that came from the centre. Governments identified national priorities, and set up institutions to realise them.

The development of the Internet draws attention to a second vision of social innovation, where it comes from the margin and it built incrementally rather than being the product of large-scale, conscious organizational design. Whatever were the original intentions in developing the Internet, it has proved to be a radically decentralized informational and communications system, where innovation arises from the ad hoc and unco-ordinated actions of myriad individuals whose activities become interconnected in the complex networked ecology to a whole that is exponentially greater than the sum of its parts.

The ABC and SBS can effectively harness both of these models of social innovation. To do so, however, we would ague that there should be a substantial opening up of both organizations to user-created content. By becoming more participatory public service media organisations, there is the scope to stimulate more public participation, creative output, diversity of sources and, ultimately, more public support for both the ABC and the SBS.

In the case of the ABC, its national network of local news and media production bureaus provides considerable scope to develop hyper-local media content that directly communicates with its communities, particularly in non-metropolitan Australia. While the ABC has user-created content initiatives such as Radio National’s “Pool” project and ABC Online’s “Unleashed” section, these continue to be add-ons to a service which continue to emphasise a transmission model of communication, where it is the in-house media professional who decide what their audiences should receive.

We continue to be a central role for journalists and media professionals at the ABC, but it should increasingly be one of working with their audiences to better enable them to become content creators in an ongoing way, rather than periodically providing outlets where users are permitted to contribute. What New York University Professor Jay Rosen terms the ‘people formerly known as the audience’ are increasingly finding their own means of producing and distributing content. Th ABC can help to shape this activity in ways that generate greater quality, reach wider audiences, and enable more significant conversations among Australians about matters of shared local, national and international importance.

For the SBS, user-created content has the potential to promote a new relationship to Australia’s diverse ethnic, language and cultural communities. In news and current affairs in particular, SBS has been a leader in provision of international news and information, but this has largely been done off the backs of the big global news agencies. Material sourced and distributed through the Internet among different communities could provide new windows on world events, with SBS acting as a ‘meta-news-aggregator’, developing an informal network of specialist ‘reporters’ around particular topic areas and international events.

The ABC and SBS have long demonstrated their capacity to be social innovators in the provision of news, information and entertainment content to Australians. As public service media organizations, they are uniquely placed to enable new usr-created content opportunities in the online media space while also managing such content sourcing strategies with their policy, legal and Charter obligations. In doing so, they would not only play a pivotal role in international debates about the future of media and journalism in an environment where media consumers are participants and content co-creators, but also enhance the awareness of Australians of what is possible in the new media environment by drawing upon and renewing their sources of credibility and reputation in the community.

Clay Shirky on Media in 2009

Digital media futurist Clay Shirky in conversation with The Guardian on what can be expected with newspapers, books, magazines and television in 2009:

Newspapers

The great misfortune of newspapers in this era is that they were such a good idea for such a long time that people felt the newspaper business model was part of a deep truth about the world, rather than just the way things happened to be. It's like the fall of communism, where a lot of the eastern European satellite states had an easier time because there were still people alive who remembered life before the Soviet Union - nobody in Russia remembered it. Newspaper people are like Russians, in a way.

Jeff Jarvis said it beautifully: "If you can't imagine anyone linking to what you're about to write, don't write it." The things that the Huffington Post or the Daily Beast have are good storytelling and low costs. Newspapers are going to get more elitist and less elitist. The elitist argument is: "Be the Economist or New Yorker, a small, niche publication that says: 'We're only opening our mouths when what we say is demonstrably superior to anything else on the subject.'" The populist model is: "We're going to take all the news pieces we get and have an enormous amount of commentary. It's whatever readers want to talk about." Finding the working business model between them in that expanded range is the new challenge.

Why pay for it at all? The steady loss of advertising revenue, accelerated by the recession, has normalised the idea that it's acceptable to move to the web. Even if we have the shallowest recession and advertising comes back as it inevitably does, more of it will go to the web. I think that's it for newspapers. What we saw happen to the Christian Science Monitor [the international paper shifted its daily news operation online] is going to happen three or four dozen times (globally) in the next year. The 500-year-old accident of economics occasioned by the printing press - high upfront cost and filtering happening at the source of publication - is over. But will the New York Times still exist on paper? Of course, because people will hit the print button.

Books and magazines

If you pick a magazine at random, it will not interest you. For people who care about quality, it's easier to find it online. If it's a highly qualified niche magazine, something aimed at surgeons or firefighters, it's going online. There's no reason those things should exist.

The great advantage magazines have is glossy pictures. It's better to read on paper than on the web but it's much better to look at pictures on paper than on the net. Brides magazine is going to be the last one standing.

The book world is more secure. I think the big revolution is going to be print on demand. Imagine only having one browsing copy of every book in a bookstore. You could say "Malcolm Gladwell's Outliers looks good", and out pops a brand new copy. Why does a bookstore or a publisher have to be in the shipping and warehousing business?

TV

The big fight will be between passion and mass appeal but I don't think it's a question of who will win. It's not a transition from A to B, it's one to many. The question is who figures out the business model that says it's better to have 6 million passionate fans than 7 million bored ones? That is going to be the transformation because what you see with these user groups, whether it's for reality TV or science fiction, is that people love the conversation around the shows. The renaissance of quality television is an indicator of what an increased number of distribution channels can do. It is no accident that this started with cable.

And the BBC iPlayer? That's a debacle. The digital rights management thing ...let's just pretend that it was a dream like on Dallas and start from scratch. The iPlayer is a back-to-the-future business model. It's a total subversion of Reithian values in favour of trying to create what had been an accidental monopoly as a kind of robust business model. The idea that the old geographical segmenting of terrestrial broadcasts is recreatable is a fantasy and a waste of time.

What does the next decade hold? Mobile tools will certainly change the landscape, open spectrum will unleash the kind of creativity we've seen on the wired internet, and of course there will be many more YouTube/Facebook-class applications. But the underlying change was the basic tools of the internet. The job of the next decade is mostly going to be taking the raw revolutionary capability that's now apparent and really seeing what we can do with it.

More media trouble: Tribune and Fairfax

This item from Tuesday's Wall Street Journal via The Australian:

TRIBUNE Company has filed for bankruptcy protection, in a sign of worsening trouble for the newspaper industry.

In recent days, as Chicago-based Tribune continued talks with lenders to restructure its debt, the newspaper-and-television concern hired investment bank Lazard as its financial adviser and law firm Sidley Austin to advise the company on a possible trip through Chapter 11 bankruptcy, people familiar with the matter say.

Tribune owns eight major daily newspapers, including the Los Angeles Times, Chicago Tribune and Baltimore Sun, plus a string of local TV stations.

A Tribune spokesman said the company doesn't comment on rumours or speculation. A spokeswoman for Lazard didn't respond to requests for comment. Representatives of Sidley Austin couldn't be reached for comment.

Tribune's latest actions underscore the deepening distress enveloping Tribune and other newspaper publishers. Their businesses are being battered by dwindling advertising sales, and many are carrying debt loads that are unmanageable in current market conditions. Industry insiders expect some papers will need to fold in coming months or seek protection from creditors to reorganise.

Tribune has been on wobbly footing since last December, when real-estate mogul Samuel Zell led a debt-backed deal to take the company private. Tribune has stayed ahead of its $US12 billion ($18 billion) in borrowings with the help of asset sales. Now, however, shrinking profits are tightening the noose.

The company's cash flow may not be enough to cover nearly $US1 billion in interest payments due this year, and Tribune owes a $US512 million debt payment in June.

One of Tribune's most pressing concerns: The company is likely to be in violation of debt terms that limit borrowings at the end of the year to nine times its adjusted profits. The ratio stood at 8.3 at the end of the second quarter, before Tribune reported an 83 per cent decline in operating profit for the three months ended September 28.

Violations of such debt covenants have become commonplace for newspaper companies as their profits have ebbed. Lenders so far have been willing to give the companies a pass in exchange for higher interest rates and other concessions, but Tribune has little wiggle room. Terms of the company's debt already are so loose and its financial standing so unsteady that a covenant waiver may not help.

Tribune's hiring of Lazard, meanwhile, brings it a firm experienced in debt restructuring, and one that has become a go-to adviser for newspaper companies in financial distress.

Even as its financial performance worsens, Tribune has some options. A sale of its Chicago Cubs baseball team is under way, and Tribune owns valuable stakes in businesses including the cable-TV channel Food Network.

Tribune already has auctioned off pieces of the company, including the Long Island, New York., daily Newsday to raise cash. Now, frozen credit markets have depressed sale prices.

Selling off more newspapers may not be a viable alternative because buyers are scarce and Tribune may be better off holding onto the profits from its papers.

And cost cutting is most likely afoot at Fairfax under new CEO Brian McCarthy:

SPECULATION is growing that likely new Fairfax Media chief executive Brian McCarthy could restructure senior management.

It is likely he will elevate more former key Rural Press executives to top positions in the Fairfax group.

It is understood Mr McCarthy will be formally anointed as CEO of Fairfax at a 9.30am board meeting in Sydney today.

The meeting comes after broking firm Goldman Sachs JBWere revealed last night that Fairfax's weekly page count across its main metropolitan newspapers, The Sydney Morning Herald, The Age and The Australian Financial Review, fell by about 5 per cent. This was led by a 20 per cent fall in classified ad pages across all mastheads.

Today's board meeting will also discuss how it plans to pay down $2.5 billion in debt. It will examine immediate options that include cutting dividends, selling off assets and more cost cuts. Mr McCarthy's former role as CEO of the leanly run Rural Press, taken over by Fairfax last year, is seen as the perfect training for Fairfax's necessary belt-tightening.

Fairfax is moving on from its expansionary phase of recent years -- which saw it clock up debt by making a number of takeovers -- to one of getting the best out of existing assets.

Speculation has centred on the possible elevation to more senior roles of a raft of former colleagues of Mr McCarthy at the regional newspaper group, all schooled in what has been dubbed the Rural Press "School of Cost Management".

As one media analyst at a broking firm put it yesterday: "Some of the Rural Press team have effectively been the shadow cabinet since the merger with Fairfax. But following the landslide election win of Brian McCarthy as Prime Minister of Fairfax, they are now likely to move to the front bench."

Those possibly in line for elevation under such a policy could include: Brian Cassell, currently Fairfax's group finance general manager; Allen Williams, head of community newspapers for the Hunter and Illawarra regions; and Allan Browne, CEO of regional publishing, southern and western.

Mr Cassell is particularly in touch with the McCarthy approach, having been his trusted finance lieutenant as general manager, accounting and finance, for Rural Press, a company famed for its lean approach.

Mr Cassell's current finance role at Fairfax sees him as No2 to the company's current CFO, Sankar Narayan. Mr Narayan was appointed in April 2004, under the former Fairfax regime of Fred Hilmer. Like Mr Hilmer, he had a management consulting background.

Mr Narayan is broadly viewed by analysts as a "strategic" CFO who was appropriate for the company's expansion of recent years. However, as one media boss put it yesterday, Mr Narayan is not regarded "as an operational CEO".

Alternatively, informed sources say, while Mr Cassell is viewed as a "numbers guy, not a strategic CFO", this could be an appropriate choice for the company in the finance area as it moves to a belt-tightening phase under Mr McCarthy.

Already, Mr McCarthy -- who for 20 months has been Fairfax's head of Australian operations -- has had another former Rural Press executive as a key right-hand man, with Lloyd Whish-Wilson CEO of Fairfax's NSW and ACT metropolitan publishing.

There have been suggestions of a restructure of roles at the top of Fairfax under a McCarthy regime. Mr McCarthy may look to restructure national and metropolitan newspapers to break down silos within the business.

One more radical scenario could see a return of Fairfax to a single national management structure, as opposed to the state-based silos now in place.

Late yesterday, it was revealed Fairfax's departed CEO, David Kirk, completed his term still owning a total of 1.97 million of the company's shares.

Media jobs crisis

The downturn in media industries is really starting to bite in the U.K.

LONDON, Nov 28 (Reuters) - British media companies could cut tens of thousands more jobs in the coming years as the economic downturn hits an industry already ravaged by the Internet revolution.

British newspaper groups and broadcasters have announced a host of cuts in recent weeks as the downturn in advertising caused by wider economic problems eats into revenues.

But analysts believe this is just the latest wave from the troubled industry, and that worse is to come. They expect stabilisation in the advertising industry by 2010 and not a proper recovery until the London Olympic Games in 2012.

Claire Enders, founder of independent consultancy group Enders Analysis, told Reuters she expected about half of all UK media jobs to go by 2013 under current economic conditions.

"We calculated the total jobs in the media in the UK at about 400,000, that includes newspapers, radio, TV, production companies, advertising and so on, at the end of 2007.

"Between the beginning of 2008 and 2013 we're expecting half of those jobs to go. The big employers are the regional press, magazines, local advertising sales. Real numbers are in print."

For more read here. There is also wholesale belt-tightening in the US entertainment industries.

Interestingly, it is predicted that it is those services rely most upon subscriptions (such as BSkyB) that will fare best, and those most reliant on advertising (free-to-air broadcasters such as ITV) will do worst.

Presentation to CPRF 2008

2008 CPRF Presentation

2008 CPRF Presentation

View SlideShare presentation or Upload your own. (tags: journalism youdecide2007)

Presentation with Jason Wilson to 2008 Communications Policy Research Forum, UTS, Sydney, 29-30 September. The full paper can be found here.


SlideShare Link

Communications Policy Research Forum

I have been at the Communications Policy Research Forum at UTS today. Congrats to Mark Armstrong and the Network Insight team for getting this one going again for 2008. The full program can be found here. 

As I spent most of the day trying to get online - problem was that I was using Firefox and not Safari browser - I'll direct you to a few links rather than write about the papers.

Jonathan Levy, Deputy Chief Economist, Federal Communications Commission, US on the digital transition in the US and some lessons for Australia. 

Stephen Quinn on changing journalism (Key quote from Washington post: "You either change journalists (behavioural change) or change journalists (fire the old ones and bring in the new)").

Australian Communications and Media Authority presentations on current communications and media research.  

More tomorrow.

News/paper

Internet guru Vinton Cerf on the future of newspapers:

Newspapers in the future

"I'd like to suggest to you that the term newspaper should be broken into two parts, news and paper. The paper part needs to be put aside for a moment, as it is only one of many potential distribution methods. The news engine is independent of the delivery mechanism, or it should be…. when you move into the online environment you know that deadline is a bit of a funny word, or at least it should be because it can go as soon as it's editorial accepted. The notion that news is continuous as opposed to an episodic thing has a lot of dramatic effects on the consumers of that information."

HASS in the Capital - Day #2

Day 2 of HASS in the Capital, hosted in Canberra by the Council of Humanities, Arts and Social Sciences. A lot of the discussion was about process and futures for CHASS, but the main event was the address to the National Press Club by Senator Kim Carr, the Minister for Industry, Innovation, Science and Research. The full text of Senator Carr's speech can be accessed here.

Senator Carr's speech contained a number of new initiatives, including the Australian Laureate scheme to replace Federation Fellowships, new policies to promote international research linkages, and a new Head of the CSIRO. For those who think that the arts and humanities have something to offer national innovation policies, Senator Carr is very interested in developing such links at a practical level.

What was striking was that the questions at the National Press Club are only asked by the assembled (small) group of journalists, who receive the speech in advance. It was fascinating to note that of the 10 questions, only two could be said to relate to the Minister's themes in the speech around education and research, and one of those was asked by the moderator, Ken Randall. Others came with set question about the car industry, the textile industry, carbon reduction policy (two questions, including one by Glenn Milne (see earlier post)), and one on whether it would be innovation if the Minister's department started using green pens instead of red pens.

A game of two halves. Good speech; crap questions from the media. This may be about how CHASS has to do more to make its issues more relevant to the media, but it also showed a high degree of laziness among the assembled journalists.

After the Olympics: Evaluating the Global Media Coverage

I woke up this morning to Radio National, and heard the BBC report on the 2008 Beijing Olympics closing ceremony. In commenting on it being a spectacle of noise, fireworks and lot of dancers, the BBC reporter commented:

China can do what democracies can't, because its government is not accountable to the voters.

Um, hello? Government in democracies do not spend lots of money on public spectacles? Taxpayers will not accept this, and want the money to be spent on roads, hospitals, schools etc.

Next Saturday, in the city of Brisbane, the democratically elected government will conduct Riverfire, a public spectacle on the Brisbane River involving, yes, noise, fireworks and dancers.

The transparently bogus claim made by the BBC reporter - that only undemocratic governments can put lots of resources into public spectacles - has typified a lot of coverage of the Beijing Olympics, particularly from Britain.

The hold of the concept of totalitarianism on the Western journalistic imaginary has been quit striking. In a way of thinking that was presented by the 'Four Theories of the Press' model back in the Cold War era of the 1960s, the line has been run that in countries with state-run media and one-party governments, all activities are an extension of the monolithic one-party state. This in turn is contrasted to an entirely normative account of how the media actually function in liberal democracies, making everything appear to be a construct of state ideology.

To take another example, Marina Hyde in The Guardian could attribute the large number of volunteers on hand in Beijing to, wait for it, the authoritarian one-party state that China has. The fact that Sydney 2000 could get 50,000 volunteer without resorting to a suspenion fo democratic rule seems to have missed this columnist.

China does need good independent journalism, and does need good independent research on its journalism. The closeness of the government, the CCP and the media is a major issue that needs to be addressed to develop a civil society that can accompany its impressive economic performanc and growing world power status.

But as long as Western media coverage of China remains freeze-locked in the model of totalitarianism that was an artefact of Cold War politics, and as long as it pursues criticism of China that completely ignores its own culture and context, we will have an awkward intellectual stand-off.

Quality work on how the world's media covered Beijing 2008 remains to be done.