Matt Welch takes media reformistas to task for hypocrisy

Matt Welch, in a post at Reason, pinpoints the hypocrisy of the media reformistas movement. Given what Welch documents they are on the record as lamenting—-the faceless corporate control of newspapers, the cost-cutting pressures that come with being a publicly traded newspaper company, the lack of local ownership (and concern with local affairs that comes with it) and, above all, the trend of media companies gobbling up ever more media companies—-they should be applauding the new ownership of the Tribune Co. by its employees and Sam Zell—a mensch with a face.

But, Welch continues, they have dissed Zell as well. That’s because, as I add in a comment to Welsh’s piece, it is increasingly clear that the leaders of the movement have a real agenda that can be gleaned from the writings of Robert McChesney, the academic who mixes their Kool Aide. In his book Rich Media, Poor Democracy McChesney holds that you cannot have a democratic society so long as the media—no matter how many firms—are privately owned, profit-seeking and supported by American commercialism. So long as the choice is from privately run media companies no number of providers is acceptable.

Media reform, McChesney contends, is prevented because the people think there is diversity and that the media “give people what they want.” That’s a far more condescending attitude than even Newton Minow might have pinned on the mass audience. The reformistas, of course, are smart enough to see behind this illusion—-but not the rest of us constituting the great unwashed. How imperious!

Retiring WSJ Managing Editor Says High Profits Created Newspaper Industry’s “Golden Age”

Today is the last day on the job for Paul Steiger, who has been the managing editor of The Wall Street Journal, for the past 16 years. That’s an impressive run by any standard.

Last Saturday the Journal published his valedictory on the front page under the headline “Read All About It: How newspapers got into such a fix, and where they go from here.” (Sub. still required)

It is a marvelous recap of where we've been and a forthright how-we-got-here, a no-tears tree-top look at the newspaper industry. Having been writing about the industry and its love-hate relationship with technology and consolidation since 1973, I have found that journalists are often the least objective when writing about their own industry. He smartly captured the ebb and flow in a way that the vast majority of Journal readers-- who have not followed every wrinkle and trend -- would understand.

But in the midst of this guided tour guided, Steiger makes an observation that would surprise many media reformistas. First he describes what journalism was like when he started out:

As a kid reporter in the '60s, I heard tales from newsmen and photographers about how, just a few years earlier, they had sat in cars, engines running and radios tuned to police bands, trying to get an edge in covering the next murder. The national and international news would be handled by the wire services. Lurid local photographs on page one were what sold newspapers in that era.

A certain fast-and-loose, devil-may-care attitude often prevailed. I remember walking past a photographer's open car trunk and noticing that he carried a well-preserved but very dead bird among his cameras and lenses. The bird, he explained, was for feature shots on holidays like Memorial Day. He'd perch it on a gravestone or tree limb in a veterans' cemetery to get the right mood. Nowadays such a trick would get him fired, but in the 1950s, this guy said, there was no time to wait for a live bird to flutter into the frame.

But then, he says, something happened. Starting in the 1960s the industry “morphed into a series of mini-monopolies. This came about first as “mounting costs forced a shakeout -- mergers and newspaper closings that typically left one city paper preeminent in the morning market and another in the evening.’ Then the evening papers ran into troubles, “crushed by a phenomenon that can be summed up in two words: Walter Cronkite. More and more families gathered in front of the tube at the dinner hour.”

This is how Steiger characterizes the results of a newly prosperous newspaper industry:

Many of these information behemoths invested heavily in quality, expanding their reporting locally, nationally and internationally. This was good business as well as a boon to readers, because it raised barriers to entry for would-be competitors.

The result was a golden age of American journalism. In New York, Washington, Chicago and Los Angeles, of course, yet also in Boston, Philadelphia, Miami, Milwaukee, Atlanta, St. Louis, Des Moines, Louisville, St. Petersburg and more, daily papers were willing to send reporters far afield in pursuit of stories exposing corruption or explaining the world. Newspapers opened or expanded Washington bureaus and added reporters abroad. Some stationed them not just in London, Moscow and Tokyo but in places like Sydney and São Paulo.

As their financial strength and staff size increased, they became fearless in pursuing corruption.

The “golden age of journalism.” Profitable newspapers had the resources to invest more into their product. Intuitive? Or counterintuitive?

Isn't competition what we seek as the mechanism to ensure that the juices flow? Shouldn’t more competition – not less—be associated with the golden age of journalism?

Although he is not writing about competition per se, in his chronology Steiger provides some answers:

• “The news operations of the three main television networks in those days followed a similar pattern. As profits grew, they added to staff and launched foreign bureaus and investigative projects. The Sunday-night magazine program CBS launched in 1968, "60 Minutes," set a new standard for expensively produced and deeply reported video journalism.”

• “Cable TV added a new worry, because here was a medium that could target smaller, exclusive audiences and thus pose a greater challenge to print.”“Then in the 1990s came the digital networks and the Internet, unleashing forces that would ultimately undermine newspaper business models that had been so supportive of journalism.”
  
  
• Finally: “The decisive blow may have been Google's, with its powerful search engine that would either give you a quick answer to a question you had or steer you to sites that could. The irony, of course, was that some of the most useful of those sites were newspapers’.”

More could be added to Mr. Steiger’s description of the forces and trends. But the basic pieces are there. So, what are the lessons learned?

First, that profitable organizations have the wherewithal to spend to maintain and improve their products or services. I've written about this before. Some may take the money and run—a short term maximization philosophy. But many—probably most judging by Steiger’s list of newspaper cities—will look for longer term profit “optimizing” strategies. And for two or three decades that worked well for the newspaper publishers and their millions of stockholders.

Second, competition works. But critics and regulators must recognize the shifting boundaries of the market. Competition for newspapers was coming not necessarily from other newspapers, but from media that were partial substitutes: broadcast television, then cable networks, then online providers. They were and are competing for advertiser revenue, consumer personal consumption expenditures—and consumers’ time. Cumulatively they have taken a toll.

(Paul Steiger is now editor in chief of Pro Publica, “an independent, non-profit newsroom that will produce investigative journalism in the public interest.”)

WOTM FAQ #4: Is the debate about media concentration you are having with other scholars fun and stimulating?

A FAQ series featuring some real questions I have answered from time to time.

It’s been awhile since I last added to my FAQ. The above is based on the opening line of a recent email I received from a graduate student. Following is my response.

I can assure you that the subject of media competition and its effects is not a simple academic debate among scholars. This is a high stakes issue. The measurement of media competition-- indeed the definition of what this means-- has policy implications for a wide range of players as well as for society at large. The folks who style themselves as media reformers I believe are more interested in creating a media environment that would be LESS diverse, more beholden to small time moguls with ideological agendas and more ridden with bias than anything we have now. Today the many large companies are most publicly held (the public being the pension funds that teachers, union members, and the rest of us invest our savings in), that are far more transparent than mom and pop entities are, and, by and large, are interested in profitability rather than steering the political or cultural content in any specific direction. I prefer to have the owners as merchants, not missionaries.

News Corp. is often held at the bogey-man by the reformistas. Yet News Corp. has been one of the major providers of choice and diversity in the media business.

-- In the 1980s, it was Murdoch's company that created the fourth broadcast network that media critics had been pleading for over decades.
--In the 1990s, News Corp. risked more of its money to start a second competitive all-news and information network.
-- In the current decade News Corp. continues to subsidize a money losing New York Post newspaper, when other publishers are cutting and running.

One reason this does not impress the so-call media reformers is that the content of these outlets is not what they think "the people" should have ready access to. What they all have in common is that they present us consumers with real choices, with media diversity in the most pragmatic sense.The Fox Network initially went down market, when the reformers assumed a new network would be more elitist. Fox News may or may not be conservative, but it is certainly different than CNN or MSNBC: that's diversity. The New York Post is not my idea of a great newspaper-- but New Yorkers already have the Times and Newsday and the Daily News. The Post is a real choice. Not mine, but for hundreds of thousands of readers. If owning Dow Jones will help News Corporation launch-- again with its own money at risk-- a competitive financial news network to compete with CNBC, then how do we lose?

I don't know if these comments fit into your research, which apparently is looking at a global context. I am merely reinforcing what I hope you have leaned from these "debates": that there is more to media competition than a string of percentages of audience share, who has how much revenue and lists of who owns what.

Media “Monopoly” as seen from the real world

You don't have to be an economist to intuitively know that close substitutes can act as very effective competition. Remember pop in glass bottles? When the only choice for diapers was to wash poopie cloth? When television news meant three broadcast networks? When music had to be distributed on vinyl?

The media debate du jour is whether a merger of two satellite radio providers, Sirius and XM, would create a monopoly. Regulators will need to determine the relevant product market. Is it the means of distribution—satellite—or the product: music and talk coming from speakers or earphone?

Weighing in on this debate is one Scott Stolz of Tarpon Springs, Fla (and therefore probably not the same Scott Stolz who is a sound mixer in Hollywood). This Mr. Stolz had the following letter published in yesterday’s Wall Street Journal. (sub required). I repurpose it without further comment.

XM and Sirius
March 1, 2007; Page B7

The thought that a merger between XM and Sirius could create a monopoly is absurd ("Making Radio Waves," Review & Outlook, Feb. 21). They would offer only one of many content options for consumers. It's a moot point anyway. By the time the merger is completed, satellite radio will have won the battle with radio but lost the war. When I subscribed to XM three years ago, I immediately quit listening to traditional radio. Satellite radio is simply a superior choice. However, now that my 927 favorite songs reside on my iPod, I have little need for radio of any kind. Why scan the dial in hopes of finding a song that I like when my iPod contains only songs that I like?

Scott Stolz
Tarpon Springs, Fla.

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