Adam Clayton Powell III

U.S. Newspaper cutbacks erase 40 years of gains

2010-01-04T16:38:42Z

TOKYO – Sometimes pictures really are worth a thousand words. At year’s end, a dramatic chart published by Silicon Alley Insider was shared by email among journalists and former journalists showing just how much the newspaper industry has shrunk in the past decade.

The graph measures newspaper employment, showing a steadily upward curve from 1947, when 230,000 people were employed at U.S. newspapers.

The curve peaks in 1990 at almost double that number - just over 450,000 jobs at U.S. newspapers.

Then the decline starts, gradually at first: By 2000, the line dips below 400,000 jobs.

]]> But in this decade, the line plunges. In 2009 newspaper jobs had fallen to 270,000 – a loss of one-third of the jobs in nine years.

Unless there is an unexpected reversal of the trend, by the end of 2010 we could see newspaper jobs fall to the level of 1947.

Of course, in 1947 newspapers had large numbers of people in jobs that no longer exist – remember rewrite desks, or typesetters? – so the number of reporters and editors may not have fallen to the 1947 levels.

But the steep decline of this decade, as it continues into 2010, is one measure of how journalism is changing in the U.S.

Everything Old Is New Again - and Again and Again

2009-12-18T20:35:31Z

For last year's elections, major newspaper web sites introduced such innovations as issues tracking and geotagged election watches, evidently unaware that these very tools had been introduced by Evans Witt and others back in 1996 on the first newspaper election web sites, when new media were really new. Some sites even had audio and video clips in 1996. OK, video over dialup was pretty jerky, but it was there, 13 years ago, the dog walking on its hind legs.

Now we see print editors gearing up for tablet computers, as reported this week by the New York Times. The Times even describes a "consortium" of publishers to try to drive standards.

]]> “Should the standards be set by the hardware industry, or should the publishers help the hardware industry create the proper standards?” the Times quotes John Squires, described as interim managing director of the consortium.

John Squires, meet Roger Fidler.

Over a decade ago, Roger Fidler developed a tablet-based standard for newspapers and magazines for - yes - a consortium of publishers. Funded by the Gannett Foundation, Fidler's early- to mid-1990s design work is almost exactly what is being reinvented fifteen years later. But from what I can see, Roger's design is cleaner, and both the articles and the ads are more interactive.

(Disclosure: Roger and I were colleagues at Gannett Foundation's Media Studies Center at Columbia University, later renamed the Freedom Forum Media Studies Center, where I was Director of Technology Studies.)

MSC Executive Director Ev Dennis, who now runs the Center for Communications at Fordham, and John Pavlik, who was my predecessor at MSC and now chairs Rutgers' Department of Journalism and Media Studies, were also early supporters of Roger's tablet design research, and they could write an authoritative history.

If you are interested in more of Roger's work, he's now at the University of Missouri. And if you are in the neighborhood, he can show you his fifteen-year-old tablets. They're probably in a museum.

Why does the news industry keep retracing its technological tracks?

In my interviews, it's clear that turnover is so complete in the online world that there is no institutional memory of what these same organizations developed in the last decade. Those who don not know the history of media technology truly are doomed to repeat it.

P.S. If you want to see some of those 1996 election news sites, pick up a copy of Lethargy '96, the book I co-authored with the late John Mashek of the Boston Globe and Larry McGill, who is now at Princeton. It has descriptions of the top ten news sites, along with usage stats and screen shots for October-November 1996. The designs of some web sites haven't changed much since then. The book is out of print, but I hear it's on eBay for much more than we ever would have thought to charge for it.

Why does anyone really want to buy NBC?

2009-11-24T15:42:06Z

WASHINGTON – Any day now, if published reports are accurate, cable giant Comcast will celebrate Thanksgiving not by dining on turkey but by feasting on peacock: Comcast is set to acquire NBC from General Electric. However, reports in the past few weeks touching on the financial performance and prospects of NBC Television raise an interesting question:

Why does anyone really want to buy NBC?

And why does Comcast, in particular, really want to buy NBC?

]]> To start, NBC is in decline: Business Week reports that NBC’s longtime position as the leader in network TV ad sales has ended, with CBS now the leader.

That is remarkable, given CBS begins with two enormous handicaps, starting first thing in the morning: NBC’s dominance all morning with “Today.” CBS is well behind second-place “Good Morning America” on ABC, running a weak third (or even fourth in many major markets) with the CBS News “Early Show,” which is both markedly less popular and much shorter than “Today,” so it has a fraction of the number of ads and they sell at bargain prices. CBS finally becomes competitive toward midday, with “The Price Is Right,” which was one of my grandmother’s favorite shows in the 1950’s.

The second handicap is the evening news. Just as CBS News lags far behind in the morning, it is dragging down the network’s fortunes in early evening. Again it is NBC narrowly in the lead, ABC close behind, and the CBS Evening News with Katie Couric lagging far behind. Those evening news broadcasts may have a smaller audience than they once had, but the commercial revenue is still quite valuable – if you are in the lead.

So CBS comes from a poor third place in the morning and evening news audiences and revenues, meaning it must be clobbering NBC in audiences and ad revenue in the high-audience prime time hours of 8-11 p.m., 7-10 p.m. in the middle of the U.S.

One big reason is that NBC has stopped competing and is in full retreat. Their in-house code phrase is that they are programming prime time “for the margins” – i.e., cut costs severely and produce programs so cheap that they can turn a profit even as NBC prime time drops to fourth place – and sometimes fifth, behind Spanish-language Univision.

Here is how it plays out: The first hour of prime time is devoted to inexpensive “reality” shows, games and “Dateline NBC.” The last hour of prime time is Jay Leno on weeknights and reruns and sports on weekends, all much, much less expensive than CBS’ dramas. The result: according to the Business Week story, CBS now has 12 of the 20 most popular programs on television, with ABC’s “Grey’s Anatomy,” “Desperate Housewives” and “Dancing with the Stars” dominating the rest of the list.

In two months it gets worse for NBC: Just as the network loses its only big audience program, NFL Sunday Night Football, Fox will begin the next season of its dominant “American Idol” series, drawing still more viewers from NBC. To get out of the basement and build its audience and ad revenue, NBC will have to spend dearly to develop new programs to find the one or two hits to start the long climb back up. Think “Cosby” and “Fresh Prince.”

So, to return to the question of the moment, why does anyone really want to buy NBC?

And why does Comcast, in particular, really want to buy NBC?

One answer has been swirling about some financial blogs and was presented clearly in a Wall Street Journal analysis. It turns out Comcast’s cable business is devolving into a generic commodity, courtesy of video on the Internet. As the Journal analysis put it, “their worst fears lurk just around the corner.”

The fear: U.S. television fans, especially younger ones, are watching more “television” over the Internet. Comcast’s business, built on those lucrative monthly cable bills of $100 and more, could erode just surely as the newspaper, music, movie and, perhaps most analogous, wireline telephone businesses are being hollowed out by free web sites, by free or cheap downloads and by cell phones. When “television” is on the Internet, why pay that big cable bill?

So Comcast is hoping to cash in on all of those new cable channels that come with NBC -- and that is where the real money is, in USA and CNBC and the others, not in the legacy NBC network. Surely, for Comcast, the biggest cable guys in the country, owning the biggest family of cable networks seems a great fit. Or maybe not: The Wall Street Journal notes that some of that same thinking led to the AOL-Time Warner merger.

Too gloomy? Look again to those young TV fans for predictors of things to come. They don’t read newspapers (other than online). They never listen to AM radio (unless it is streamed online). And now they are abandoning television: Business Week quotes one analyst who says viewers aged 18 to 49 watch 90 minutes less television per night than viewers just a few years older, age 25 to 54.

90 minutes less television viewing per night.

Another signpost up ahead: the most successful title of the week in all of entertainment this week was not a television show, not a movie and not a record. It was a video game, "Call of Duty: Modern Warfare 2," which made $550 million in the first five days it was released, ten times more than it cost to produce, according to published reports. It was the most successful entertainment product of the week – by far.

And this: Not that long ago, stores began selling television sets that were “cable ready.” Take it home, plug it into a cable line and start enjoying cable TV. Now go to an electronics store and look at the new “television” sets and “DVD players.” Now they come Internet ready, with little Netflix logos. Take it home, plug it into a broadband line and start enjoying “television” and movies -- and games and YouTube and Facebook – without an antenna or cable TV.

All of this will surely affect CBS, Fox and ABC as well. But those networks, still profitable, can coast slowly down as this demographic shift deflates the television audience. But NBC is leading the way down.

The result: Comcast could be paying top dollar for a legacy network at is nadir and a bouquet of cable channels that are profitable, for now, just as the entire television business, broadcast and cable, is at a tipping point – pointing down.

It is not difficult to imagine “television” going the way of newspapers and AM radio: it won’t entirely disappear. It will just be a dwindling, increasingly marginal medium for a dwindling, aging audience.

Newsday is first to take the plunge, goes all-pay online next week; one major provider vows to remain free

2009-10-23T03:29:01Z

NEW YORK -- Look, up in the sky! It’s a balloon!

No, it’s not Falcom Heene floating over Colorado (or not, as it turned out). It’s Terry Jimenez, floating over Long Island!

Who???

Dear readers, meet Terry Jimenez, hero to newspaper publishers and scourge of free content on the Internet. What, you’ve never heard of him? Those of you without the Terry Jimenez poster can write to the Newspaper Association of America. Think of the iconic Farrah Fawcett poster, but with presses rolling. Really.

No, just kidding (I think).

]]> Terry Jimenez is Publisher of the Long Island daily Newsday, and he is launching the biggest trial balloon of the month, in his announcement that Newsday will be the first major metro daily to retreat behind a pay-only Internet wall.

Long discussed by newspaper owners envious of the huge success of The Wall Street Journal pay-only Internet site -- with a huge asterisk: you can actually find most of the Journal content by going through a back door. Rupert Murdoch’s News Corp has long been publishers’ poster child for what they think a newspaper web site should be: another source of subscriber revenue. And since the Journal ink-on-paper edition just passed USA TODAY to become the largest circulation newspaper in the U.S., the web site may have boosted the dead tree edition’s sales, because wsj.com is available for free to anyone who has the paper paper delivered.

And that is exactly the model Newsday has in mind: Subscribe to the paper paper and you get all of the content on the web. For a mere $5 a week, you can get everything at www.newsday.com – but if you don’t pay, you just get all of the ads and a few teasers.

Terry Jimenez’ move next week will be closely watched, and imitators are already getting in line. Other publishers say they want to move their web sites to the wsj-newsday model, too, but one said he wanted to wait a decent interval (say, a day or two) so there would be no question of collusion. That’s illegal -- with a huge asterisk for daily newspapers who would compete with each other, but Congress helpfully allowed erstwhile newspaper competitors to merge business operations and otherwise engage in collusive and uncompetitive business practices.

And yet, dear reader, from coverage of the report by Len Downie and Michael Shudson urging federal subsidies to newspapers, you thought that newspapers weren’t already heavily, um, financially supported by the government which they cover without fear or favor. Exemption of newspapers from federal anti-monopoly laws is just one subsidy that my colleagues Geoffrey Cowan and David Westphal are studying, but you should read their reports for details. And we don’t need to detail the many subsidies of broadcasters or their government-monopoly-granted cable cousins. And they all still lose money! Is C-SPAN the only news medium in the U.S. not dependent on government largesse?

But I digress.

Jimenez’ bold move at Newsday will be cited favorably and copied by publishers (and their employees) from coast to coast tired of cutbacks. Besides, no one seems to know an alternative. One former Gannett editor over lunch last week noted that the Gannett-owned Detroit newspaper has evolved into a web site with an occasional ink-on-paper edition attached, printed three days a week. But that’s unfair: Detroit is the basket case of major markets, in a state so bankrupt that sustained federal “stimulus” spending has generated only 397 new jobs. Yes, that’s fewer than four hundred for the entire state of Michigan for all of the $787 billion of federal “stimulus” spending. No, I’m not making that up: Those job numbers are official government stats. As always, truth trumps satire, even though Jon Stewart is so often closer to what’s really happening than corporately co-owned anchor Katie Couric. Does that mean The Daily Show should get a (new) federal subsidy?

But once again I digress.

Back to Jimenez and his silver (gold?) trial balloon. Oh joy! Oh rapture! Oh Seraphim! Let the subscriptions flood the Internet newsrooms! Glory be to the bottom line! Oh frabjuous jubjub!

But… What’s this: Is that dark cloud in the sky? Are lightning bolts truly about to strike the paid-newspaper balloon? And careful readers will have noticed the second part of this article’s headline, after the semicolon.

Let’s back up: Newspaper publishers are honorable men and women, but they are, well, newspaper publishers. And as we all are frail humanity, they are prone to assumptions based on their experiences. If you are accustomed to being a monopoly provider of news, then you are prone to act as if, well, you are a monopoly provider of news. Which is why incumbent media rarely understand competition from innovators, from radio to television to the Internet to… You get the idea.

But newspapers long ago ceased to be monopoly providers of news. The barrier to entry, as it were, fell long ago, documented in the pre-web era by Anthony Smith, Ev Dennis and many others, Goodbye Gutenberg, indeed. They just don’t know it yet. Maybe they know it intellectually, but viscerally, they are still the dinosaurs wondering about these pesky rodents. And by the way, was that a meteor that just struck?

So the moment of newsday.com going all-pay seemed an appropriate time to visit with Richard Sambrook, head of BBC News, one of the world’s most respected sources of international news. (Disclosure: Sambrook was extraordinarily helpful to this writer in my public television days, including helping me add much live BBC television news from London including three live newscasts a day to the schedule of Howard University Television in 2002.)

And here is the problem and the promise of the Newsday balloon:

Sambrook assured me that BBC News is and will always remain free. In the UK, the BBC is supported by the license fee paid by all owners of television receivers (or at least they are supposed to pay). Globally, BBC News is supported by advertising. So if a major story is breaking anywhere in the world, you don’t need to go to newsday.com (or wsj,com or nytimes.com). Auntie Beeb, a.k.a. news.bbc.co.uk, will always be there, worldwide. Free of charge. Zip. Nada.

This is really bad news for nytimes.com. The New York Times has staked its future on its national and international coverage,losing money in the process but the banker to and second largest stockholder of The New York Times, Mexican billionaire Carlos Slim may lose patience and just take over the company. And do you want to be the new Mexico City bureau chief?

But once again I digress.

By now you see that what Newsday is really selling is Long Island news. Nassau and Suffolk Counties. That’s it. And that is what newspapers, from a million circulation to a few thousand, are selling: local news. Newsday hs a huge advantage, as noted by Jimenez in his announcement:

“75 percent of Long Island households are already Newsday home delivery” customers, Jimenez said. Wow! Who has that penetration!!!

Oh, by the way, Nassau and Suffolk are two of the richest counties in the United States. To paraphrase the PBS slogan, if Newsday can’t do it, who can? But this will be the question, from Newsday to local dailies in medium- and small-size markets everywhere: Can you convert your web site readers to paid subscribers before they (and you) discover there are also competitors for local news?

Stay tuned, dear readers. As Bette Davis once said, “Fasten your seat belt. It’s going to be a bumpy ride.”

Come to think about it, she was an incumbent referring to a disruptive innovator!

Two Newspaper Models: Microlocal success, large market challenges

2009-10-05T18:06:55Z

WASHINGTON, D.C. – The latest evidence of financial viability of microlocal news comes from an article in the Wall Street Journal describing the Register-Star, a successful newspaper in Hudson, a town in Columbia County, New York.

The formula is a familiar one: “a rich diet of local politics, education news, crime, school sports and people stories.”

]]> You can see its extensive online coverage here. And according to the Journal article, the Register-Star never relied on classified advertising as heavily as the major metro dailies, all of which have seen their classified ad revenue eviscerated by craigslist.com. But that’s another blog; let’s go back to the editorial side, to examine local news and sports.

Sports in microlocal news means school sports, always a backbone of local news across the U.S., even for large market television stations in much of the country. For small-town newspapers and microlocal web sites, extensive coverage of high school and middle school sports is essential to success: This is news and sports coverage that is in effect under the radar, without competition from the wire services or other publishers. ESPN and the AP cover the major leagues, and those scores and stories are all over the Internet, with coverage of the pros and high-profile college sports part of what is now an Internet news commodity.

But microlocal newsrooms can neglect major league games to focus on Little League games – and have the coverage all to themselves. By emerging as the sole source of home town news, microlocal newsrooms can survive as viable businesses. Just as major metro dailies in most cities grew into major metro monopolies or duopolies, with monopoly-level profits, now it is the small-market microlocal dailies and web sites that are the new news monopolies, avoiding the commodity business model that is eroding their larger counterparts.

So how does this play out in newsrooms of larger-circulation newspapers?

The Wall Street Journal is notably successful in charging on line, but so far it is the notable exception. The New York Times tried to charge for its columnists and then backed away when neither its readers nor its columnists liked the idea. The Times has been rescued, for now, by a $250 million cash bailout from controversial Mexican billionaire Carlos Slim (see background here). But the Times is paying a huge price for that lifeline, agreeing to pay Slim an exorbitant interest rate and elevating him to the third largest stockholder in the company. And if he exercises his options, Slim could soon own the largest piece of the New York Times Company.

Then there is The Washington Post, which is going in a very different direction. For example, The New York Times owners doubled down on print, buying the Boston Globe at the worst moment, and the Times now is facing a loss on the order of a billion dollars. By contrast, The Washington Post passed on the Globe and instead bought Kaplan, a very profitable company that has financially cushioned the Post and given it some breathing room while it tries to invent a new business model. (This is all explained quite clearly in the current Vanity Fair)

The Post has also gone its own way editorially, pulling back from national distribution to focus on its home territory here in Washington, D.C., and the surrounding suburbs. With its economy dominated by a recession-proof local industry – the federal government – the Post’s financial base is more secure than one based on, say, New York City’s investment banks. But the Post is not immune from the nationwide newspaper trends of falling circulation and declining revenue.

Which brings us back to sports. For the Post to dominate its coverage area, it needs to dominate coverage of sports -- and not just the pro teams, because ESPN, NFL.com and everyone else in sports is covering them, too. So the Post should be the go-to source for all of the hundreds of thousands (maybe over a million) fans of high school sports, right?

Wrong.

It turns out high school sports scores have now been squeezed out of the Post by earlier deadlines, caused by the new realities of fewer printing plants and new delivery truck schedules. Not surprisingly, this has not gone unnoticed by Post readers, who wonder what happened, just as high school football season started. In Sunday’s Post, the paper’s Ombudsman responded with a full explanation.

Okay, the new realities of fewer printing plants and new delivery truck schedules are, well, the new realities of the newspaper business. But by eliminating high school sports, and the avid fans who follow them, the Post seems to be opening itself to new microlocal competitors, competitors who can close later, print closer to home -- and include those high school sports scores.

Will YouTube be the Craigslist of TV News?

2009-08-06T18:01:18Z

BOSTON -- Watch that space: YouTube video news is here, tailored just for you, featuring news of your microlocal neighborhood, just for you.

If you haven’t seen it, YouTube News Near You is an automated microlocal news service, with software detecting a your location and matching it with video news stories from that neighborhood. Turn on, tune in, and drop out of the six o’clock local TV news.

So far the story selection is pretty limited. Think of YouTube's new local news service as 2009’s version of the “Camel News Caravan,” NBC’s 15-minute nightly newscast of the early 1950’s, hop scotching your neighborhood for headlines. But five decades ago, John Cameron Swayze soon gave way to Huntley and Brinkley, and modern NBC television news was born. YouTube news could evolve really quickly in the next few years, or the next few months, especially as YouTube signs up local television and newspaper newsrooms around the country as video-providing partners.

]]> And please note YouTube news is launched by Google, which dominates search advertising. YouTube news will drill down and let Google deliver ads tuned to microlocal neighborhoods, because viewers are already tagged by their location. It’s easy to imagine Google adding viewer self-selection to enable specifying which neighborhood (or neighborhoods) you want delivered to your computer: self-identification by nine-digit zip code. Now microlocal online ads start to really make sense, because advertisers can pinpoint exactly where viewers are. Coming soon to your computer: ads for momandpopstore.com

Viewers will also be able to self-select in other ways. Embedded in the very structure of YouTube is self-selection driven by choices you make. You clicked on three stories about traffic? Here’s another – and a local political candidate’s ad touting his proposals to ease traffic congestion. You liked that clip on the fire down the street? People who liked that story also liked this one, too... and by the way Amazon has a sale on fire extinguishers if you order on line in the next five minutes.

Sound farfetched? Not at all: News Near You went mainstream in The New York Times this week. But last month there were reports in the blogosphere noting YouTube’s approach to publishers asking to become a “YouTube news partner.” One blog included the text of the pitch from YouTube, complete with five benefits, from larger audiences and increased revenue to detailed demographic analyses, for free, of the people who play their videos. News Near You is snuggling much closer to you than you may have expected.

One item not included in the pitch: What will YouTube News Near You do to local journalism? It’s easy to imagine this could go either way:

On one hand, Google may have found another mother lode, and some lucky newsrooms will be partners, sharing the ad revenue and thus able to afford more and better local reporting.

At the other extreme, YouTube news could be the craigslist of video news, eviscerating the revenue that supports TV and cable news, just as Craiglist eviscerated newspaper revenue.

Of course both could happen, or some combination of these extremes. And given the accelerating pace of change, it’s likely we will not need to wait very long to whether News Near You is good news or bad news for journalism.

New revenue streams boost TV, while new fees may stifle Internet radio

2009-05-26T19:53:15Z

WASHINGTON -- Speakers at a conference of broadcasters here last week described new revenue sources that may make the difference between profit and loss for U.S. broadcasters.

And there was bad news for streaming media on line -- which turns out to be good news for radio stations.

]]> First, here’s a look at that new revenue for television. Actually, it's not that new: it's just suddenly getting bigger - billions of dollars bigger. That new money is from political ads, a revenue stream turning into a veritable Mississippi River of money, and it comes at a time when the local TV ad business is falling rapidly - down 20 to 40% year over year - and may represent the margin of profit for U.S. television stations as early as next year.

Political ads have now grown into a multi-billion-dollar business, and there is no sign candidates will reduce their ad spending any time soon. (See “2008 Political Ads Worth $2.5 Billion to $2.7 Billion,” Broadcasting & Cable, December 2, 2008, and discussion in the 2009 edition of The State of the News Media )

More good news for TV stations: off-year political spending, in those odd-numbered years when there are no federal elections for President, Senate or House, is increasing rapidly, courtesy of issue ads. We're seeing more and more, and as Congress debates major new federal programs for health care, energy and other big-ticket items, the people with money at stake will be buying their way onto a television screen near you.

This may or may not be good for American democracy, but it is good news indeed for the bottom line at TV stations.

The second revenue stream for TV broadcasters is, well, cable. Yes, over-the-air broadcasters can and do collect per-household payments from cable TV and satellite companies, just like CNN or MTV, courtesy of an act of Congress. Here is how the FCC describes it: “The Communications Act prohibits cable operators and other multichannel video programming distributors from retransmitting commercial television, low power television and radio broadcast signals without first obtaining the broadcaster's consent (Cable Carriage of Broadcast Stations, FCC).

And once a few pioneering TV station owners discovered they could charge for that consent --- just like CNN or MTV – their fellow broadcasters decided to join the bandwagon. And like political advertising, the fees are rising so rapidly that they are becoming billion-dollar boosts to TV stations' bottom lines - at no cost whatsoever to the stations.

Is this a good business, or what?

You bet, say station owners.

Now, wait just a minute, say ABC, CBS, Fox, NBC and other networks: The reason cable and satellite operators are paying stations all that money is not because of local news and syndicated "Seinfeld" reruns. No, the reason stations are reaping these big fees are because of “CSI” and “American Idol,” programs produced by networks, not by stations. So much or most of the “retrans consent” fees should come to the networks, not the local stations.

Watch that space. Or as William Goldman famously wrote (and Deep Throat evidently never said), “Follow the money.” It's always good advice.

Now for the bad news for streaming web sites - which may be good news for radio.

That news is Performance Fees.

Performance fees would be mandated by legislation now before Congress, requiring radio stations - including Internet radio stations - to pay fees to musicians whose recordings they play. The fees scale up to 5% of a station's gross revenues. Performance fees are strongly opposed by the National Association of Broadcasters. But it turns out these new fees could help, not harm, radio stations.

Here’s why: They would stifle Internet radio, a growing source of competition to radio broadcasters. Internet streaming is typically low-budget, undercapitalized and often a one-person operation. The new payments will drive many if not most of them out of business. (They could also drive many of them offshore, outside the US, 21st century digital versions of the 20th century pirate radio stations that broadcast from transmitters located offshore on ships outside of territorial waters.)

By contrast, many if not most U.S. radio broadcasters can afford the payments. So if enacted, performance fees, intended to benefit artists and performers, will also be a new cost of business -- and a new barrier to entry for some of the most creative Internet radio sites.

Some radio broadcasters may also not survive the new fees: Cathy Hughes, founder of the African American-owned Radio One stations, predicts the demise of many black music stations, especially the small gospel music outlets, which have little or no profit margin. And note recent protests targeting one of the bill’s sponsors, Rep. John Conyers.

As with the growth of political advertising, performance fees may or may not be good news for democracy. But it is good news, indeed, for much of the radio business.

Credit where credit is due: Most of these data come from a fascinating presentation by a panel of media analysts from Wachovia Securities. Unlike politicians and public interest groups (often politicians by another name), the only metric that interested these bankers is whether their broadcaster customers can repay their loans. At least it kept the calculations clear.

And if you are curious about what your faithful correspondent had to say to a bleary-eyed 8 a.m. audience, you can see it here.

The week the media crashed

2008-12-16T18:05:24Z

So this is how it ends:

- Detroit newspapers have lost so much revenue they plan to publish and distribute a traditional paper only two days a week, according to the Wall Street Journal
(and reported here).

- NPR has lost so much revenue that it will cancel programs once considered the network's future to conserve resources for its decades-old hits, according to an NPR announcement.

- NBC has lost so much revenue it announces it will only program four hours a week of traditional prime time entertainment next fall. Yes, that's correct: four hours a *week* -- read on. (The press release is available here.)

- The Tribune Company, owner of the Chicago Tribune, the Los Angeles Times and a host of other newspapers, has lost so much revenue that it filed for bankruptcy protection from its creditors, sending shockwaves throughout the industry.

And all of that was just last week.
]]> In little more than a decade, the Internet has grown from a communications tool for the scientific elite into the force that is fragmenting mass media. The Internet, with a shove from the recession, are pushing 20th century American media to evolve into something that our great grandparents would find familiar: the golden age of the pamphleteer.

But back to NBC: The network's announcement that Jay Leno's nightly show will move from 11:30 to 10 p.m. (and Conan O'Brien from 12:30 a.m. to 11:30 p.m.) means inexpensive talk formats will expand to replace traditional television dramas and comedy - what Hollywood calls "scripted entertainment" - starting at 10 p.m., 9 p.m. in the middle of the country.

NBC considered the announcement so important it interrupted live coverage of the Blagojevich corruption scandal to switch to live coverage of its own Jay Leno announcement.

But remember, it was also NBC that announced earlier that it could no longer afford to buy traditional TV entertainment shows for broadcast for the first hour of the evening - before 9 p.m. -- so it now will only schedule games, "reality" shows and NBC News "Dateline" from 8 to 9 p.m.

That leaves only one remaining hour, 9 to 10 p.m., for scripted dramas and comedies. But only four nights a week: NBC runs sports on Sunday nights and reruns on Fridays and Saturdays.

So starting next year, NBC will only need to buy four hours of scripted programs. But let's spin this out: if "Heroes" is renewed on Monday, "Law and Order" on Tuesday, "The Office" and "30 Rock" on Thursday, that leaves exactly one hour a week, Wednesday 9-10, as the last NBC opening for all of Hollywood's stars, producers and studio
executives.

Leaving only one hour a week (okay, for the sake of argument let's say it's two hours) for all of NBC's drama and comedy development, in a business where most shows that premiere fail, does not exactly give NBC an edge in developing the next generation of hits.

(It is worth noting that CBS strongly and gleefully disagrees with NBC's strategy, expecting "CSI: Miami" and its other 10 pm hits will benefit by reduced competition at 10 pm from Leno's NBC talk show.)

Game almost over.

Which brings us to NPR.

The nation's largest public radio broadcaster gave as the reason for the cutbacks "[a] sharp drop in our current and projected corporate underwriting." You can see more details in NPR's internal staff memo (full text here).

So just as in commercial broadcasting, "noncommercial" broadcasting relies heavily on advertisers and advertising. Yes, advertisers -- the same companies that advertise on commercial broadcasting - but on "noncommercial" broadcasting, the commercials are "underwriting." (Plus public radio and TV suspend hours of programming at a time for telethons for themselves.)

And just as NBC is all but eliminating its future in scripted drama and comedy, NPR is eliminating its newest daily news programs -- "Day to Day" and "News and Notes" -- which were designed as future core offerings of the network:

"Day to Day" has had a surge of audience, according to the NPR website and "News and Notes," which started on NPR as "The Tavis Smiley Show" before Tavis quit NPR, was designed to attract younger and nonwhite listeners to NPR News.

Not so coincidentally, "News and Notes" is also what inside NPR is called "mission" programming: programs justified by the public mission of NPR but not likely to be supported by commercials (underwriting). Of course sometimes there are surprises: such "mission" programs as "Wade in the Water" become hits. And, if you look far enough into the past, "All Things Considered" was a "mission" program.

But just like Jay Leno on NBC, NPR's "All Things Considered" and "Morning Edition" are mature programs. Both Leno and "ATC" have peaked in total audience, and that audience is aging, an anathema to youth-obsessed advertisers (and underwriters).

And at NPR, "ATC" and "Morning Edition" have long been the cash cows, profits from which are used to support mission-driven, money-losing NPR programs such as "Performance Today" (which NPR has spun off to a public radio competitor, American Public Media; details here).

NPR has not seen an audience drop in 25 years, and that one led to a financial crisis and broad layoffs which in NPR is still called "the crash." What happens if NPR News is just another aging mass medium, like newspapers, and the audience drops once again - and doesn't recover?

But step back from the profit and loss and consider the more important policy question: NPR was never designed to be just another business. Its genesis was in the Kerner Commission Report of 1968, which cited media neglect a major cause of urban unrest. The Commission recommended creation of a new noncommercial medium, and its explicit charge - and public broadcasting's explicit core mission, the reason Congress gave public radio and television all of that money -- was "to serve the underserved."

Now, by relying on advertising, pursuing the same affluent mass audience as commercial broadcasting and thus abandoning its core mission, NPR has made itself into just another mass medium, supported by commercials (underwriting).

(OK, public radio isn't entirely supported by ads, but then neither are cable TV networks supported entirely by ads. Public radio relies on a second revenue stream, listener contributions. Cable TV networks have a second revenue stream, viewer contributions, also called your monthly cable bill. Contributions to NPR differ from contributions to your local cable company in that your cable bill is generally fixed in price, while you can elect to contribute as much as you want to NPR - and it's tax deductible.)

Now please don't misunderstand: I still listen to NPR, but I listen the way our students listen: downloading specific stories that interest me to my computer.

And I still watch NBC television, but I watch the way our students do: live sports. That's it. Everything else is available on line, on my schedule, not NBC's. For certain, I was among the millions who watched Tina Fey as Sarah Palin - but not on NBC. We watched on the Internet.

Game over.