Communication Leadership blog

Top Secret Talks: The tension between national security and a free press is the focus of a groundbreaking CCLP series in New York

2010-02-26T17:58:33Z

In conjunction with the Off-Broadway debut of Top Secret: The Battle for the Pentagon Papers, conversations spotlight journalists, scholars, jurists and public policy leaders

With the nation involved in two wars and facing continuing threats of terrorism, USC Annenberg’s Center on Communication Leadership & Policy (CCLP) presents TOP SECRET TALKS, a timely examination of the tension between the government’s need for secrecy and the public’s right to know, in conjunction with the New York production of Top Secret: The Battle for the Pentagon Papers.

As issues of government classification—and declassification—confront the current administration and as the Internet opens new frontiers for the disclosure of confidential information, Top Secret Talks promises a month long series of conversations with leading journalists, scholars and policymakers about the modern lessons of the Pentagon Papers story.

Individual programs are presented by organizations such as the Columbia Journalism Review, Human Rights Watch, NYU’s Wagner School of Public Service, the Asia Society, The New York Institute for the Humanities at NYU and the Center for Public Integrity. Speakers will include Daniel Ellsberg, the former Defense and State Department official who gave the Pentagon Papers to the Washington Post; legendary Washington Post investigative reporter Carl Bernstein; Leslie Gelb, who led the Department of Defense project that produced the Pentagon Papers; New York Times managing editor Jill Abramson; Washington Post editor Marcus Brauchli; and playwright Geoffrey Cowan; among others. Continue reading for a more detailed schedule.

]]> Originally produced by LA Theatre Works and presented in partnership with New York Theatre Workshop and Affinity Collaborative Theatre, Top Secret: The Battle for the Pentagon Papers, opens Off-Broadway at the New York Theatre Workshop with previews beginning February 24. Individual tickets went on sale Friday, January 29. To purchase tickets, visit New York Theatre Workshop.

The play asks an enduring question: In a democratic society, when and how long, if ever, should a government be allowed to keep secrets in the name of national security? Top Secret provides a dramatic look at The Washington Post's decision to publish information from the classified study documenting U.S. involvement in Vietnam after a federal court had shut down publication by The New York Times. The ensuing court battle over the potential national security threat posed by publication tested the parameters of the First Amendment – and focused a spotlight on the conflict between government and the press. The epic legal battle went to the nation's highest court - arguably the most important Supreme Court case ever on freedom of the press.

All TOP SECRET TALKS will be presented at New York Theatre Workshop, 79 East 4th St., New York, NY 10003. Discussions are free and open to the public.

Please click here for a complete schedule.

State Department's Alec Ross visits USC Annenberg to discuss new communication technologies & US foreign policy

2010-02-13T05:11:15Z

CCLP hosted Alec Ross, Secretary of State Hillary Clinton’s Senior Advisor for Innovation, for a visit to Los Angeles in February 2010 for a series of discussions about the impact of technology – current and potential – on key issues on the U.S. foreign policy and development agenda.

CCLP director Geoffrey Cowan and USC Annenberg Dean Ernest J. Wilson III brought together entertainment, media, and academic leaders to explore ways in which their experience and expertise might facilitate the application of mobile, web and other rapidly evolving technologies in areas like human rights, economic development and women’s empowerment.

]]> Increased participation of the entertainment industry in U.S. cultural diplomacy was a central topic. Other participants included USC’s Institute for Creative Technologies, which demonstrated the cutting-edge work it is doing in web-based technologies as virtual training platforms for the U.S. Army, and USC Marshall’s Institute for Communication Technology Management, led by former Fox executive Lucy Hood.

Since joining the State Department in April 2009, Ross has spearheaded major technology-based initiatives in Pakistan, the Democratic Republic of Congo, Mexico and elsewhere.

To follow up on the visit, I will be helping CCLP develop a new project to explore ways to extend the reach of new technologies and regularize their availability and the processes through which they might be deployed by NGOs and others working in critical issue areas.

From left, Geoffrey Cowan, Alec Ross and Dean Ernest J. Wilson III

USC Marshall's Lucy Hood presents research from the Institute for Communication Technology Management.

Alec Ross and Jeremy Curtin

Should Government Support Journalism? It Always Has

2010-02-08T23:53:25Z

Everyone knows from American history class that the First Amendment is the great protector of press freedom in the United States, barring Congress from "abridging" the sacred right to publish what you want to publish.

So does that means there's a constitutional wall that separates government and the press, just as it separates church and state?

Not exactly. Contrary to popular perception, the Constitution has not prevented the government from being a supporter of the press, and in fact it has been a generous benefactor since the founding of the country.

In a report issued at USC's Annenberg School for Communication and Journalism, my colleague Geoffrey Cowan and I concluded that federal, state and local governments have contributed billions of dollars a year to the commercial news business.

]]> Even now, these governments devote upward of $2 billion in postal subsidies, public notices and tax breaks to the for-profit press, more than twice as much as they spend on public radio and television, which are widely understood government creations.

These findings come at a time of severe economic trauma in the news industry. A combination of the deep recession and an Internet-led digital revolution are pressuring news many news organizations in the extreme, and it's not clear whether all – or even most – will survive.

Is there a role for the government in helping ensure that citizens continue to get the news and information they need in American democracy? One popular response is no; government has no place in subsidizing the news business. Our findings disagree: It has always taken a place, even before the country was founded.

As early as colonial America, postmasters set steeply discounted rates for publishers who sent their newspapers and magazines through the mail. At the same time, local jurisdictions began requiring that public agencies publish notice of official actions in newspapers. These practices would persist for more than 200 years, and they both would be enormously beneficial to publishers' bottom lines.

By the late 1960s, postal subsidies were worth nearly $2 billion to newspapers and magazines (in today's dollars), and public notices brought in hundreds of millions more in high-margin revenue. A combination of state and federal tax breaks for news magazines was worth another $1 billion (again in today's dollars).

Now, though, those subsidies are in the midst of long-term decline. Starting in 1970, the Postal Service began to dial back its discounts for publishers. Today, they have all but vanished. The $2 billion worth of preferences in 1970 is down to $300 million. The same downward cycle appears to be starting now for public notices. Legislation has been introduced in at least 40 states to allow government-mandated public notices to move to the Internet, a move that would drastically reduce newspapers' revenue and could eliminate it altogether.

All of which raises a question: If the government has supported the news industry for all of American history, shouldn't it consider new forms of support now, when the survival of news businesses is in doubt?

Our answer is yes. Our report does not recommend specific new policies, and in fact observes that given the rapid growth of news and information in the digital world, it's possible that government action may not be needed.

But we don't know yet whether this happy outcome will occur. It's also possible that citizens' information needs will go wanting as legacy news operations continue to shrivel. For that reason, we urge policymakers to consider alternatives in which the government would help fill the gap – whether through technology innovations or public broadcasting investments or favorable tax policies.

In taking such steps, political leaders should know that their actions would not be radical departures. They would in fact be perfectly in sync with all of American history.

This column was originally published by AOL News.

Government Financial Support of News Media Continues Steep Decline, Adding to Financial Crisis in News Business

2010-01-28T17:30:00Z

Government financial support that has bolstered this country's commercial news business since its colonial days is in sharp decline and is likely to fall further, according to a CCLP report released January 28, 2010. (Watch video from the Washington, D.C. briefing at the National Press Club by clicking here) Because these cutbacks are occurring at the height of the digital revolution, they will have an especially powerful impact on a weakened news industry

Public Policy and Funding the News is a unique effort to begin examining how involved the government, at all levels, has been in subsidizing news throughout American history to foster an informed citizenry; and what this support has meant for publishers, journalists and news consumers. The report analyzes some of the financial tools that government has used to support the press over the years -- from postal rate discounts and tax breaks to public notices and government advertising. The report documents cutbacks across a range of sectors and presents a framework for the consideration of policy options to place the industry on more secure financial footing.

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It is a common myth that the commercial press in the United States is independent of governmental funding support," says Geoffrey Cowan (pictured, above during the briefing at the National Press Club in Washington, D.C.) who co-authored the report and is USC Annenberg School dean emeritus and director of the Center on Communication Leadership & Policy (CCLP). "There has never been a time in U.S. history when government dollars were not helping to undergird the news business to ensure that healthy journalism is sustained across the country."

"Certainly, the U.S. has never supported news-gathering the way some European and Asian countries have," said David Westphal (pictured, below with Cowan and CCLP Law Fellow Ariel Fox), report co-author, former Washington Editor for McClatchy, current CCLP senior fellow and USC Annenberg executive-in-residence. "The point here is that it's time all of us, outside and inside the industry, realize that tax dollars support the American news business, and those dollars, which throughout our history have been critical in keeping the news media alive, are now shrinking quickly."

The late 1960s marked a high-water mark of government support for the news business. The postal service was subsidizing about 75% of the mailing costs for newspapers and magazines, roughly $2 billion in today's dollars. Today, however, publishers' mailing discounts for their printed news products are down to 11% or $288 million.

Paid public notices, government-required announcements that give citizens information about important activities, have also been lucrative for newspaper publishers, providing hundreds of millions in revenue to publications ranging from local dailies and weeklies to national newspapers such as The Wall Street Journal.

For example, in a four-week study, researchers found that the government was responsible for the most purchases, by column inches, of ad space in the Journal. And the newspaper wants more: in 2009 they battled Virginia-area papers in a move to get their regional edition certified to print local legal notices.

This public notice income is especially important to weekly and other community newspapers, accounting, in 2000, for 5 to 10 percent of all revenue. But now, proposals are pending in 40 states to allow agencies to shift publication to the Web.

Tax breaks given to news publishers are likely to decline because many are tied to expenditures on paper and ink and cash-strapped states are seeking to find new sources of revenue. Federal and state tax laws forgive more than $900 million annually for newspapers and news magazines, with most of the money coming at the state level.

Some additional excerpts:

In 2009, federal, state and local governments spent well over $1 billion to support commercial news publishers
The cumulative effect of reducing these government subsidies is not the primary problem afflicting the news business today. At most, government assistance has dropped by a few billion while newspapers alone have lost more than $20 billion in revenue in the last three years. Yet, government support represents a critical element of economic survival.
Policymakers cannot afford to be mere spectators while these changes flash by. American government does not work very well if citizens do not have a reliable supply of news and information. What is playing out in the news business is a vital national interest

Public Policy and Funding the News offers a framework to pursue options currently under consideration, including 1) Allowing newspapers to become non-profits; 2) Tax credits for taxpayers who subscribe to newspapers; 3) Expanded federal investment in digital technology and infrastructure, including broadband access; 4) An antitrust law timeout to allow publishers to form a common strategy; and 5) Significant new government funding for public radio and public television.

As policymakers debate these and other proposals, Cowan and Westphal offer the following principles:

First and foremost, do no harm. A cycle of powerful innovation is under way.To the extent possible, government should avoid retarding the emergence of new models of newsgathering.
Second, the government should help promote innovation, as it did when the Department of Defense funded the research that created the Internet or when NASA funded the creation of satellites that made cable TV and direct radio and TV possible.
Third, for commercial media, government-supported mechanisms that are content-neutral – such as copyright protections, postal subsidies and taxes – are preferable to those that call upon the government to fund specific news outlets, publications or programs.

"We live in an era of profound technological change that threatens many forms of news media. We do not favor government policies that keep dying media alive. But we do believe government can help to provide support during this period of transition," says Westphal.

A complete copy of the report is available online at www.fundingthenews.org. The website also features supplemental research papers on eight specific areas: postal rate subsidies, tax policy, broadband expansion, international broadcasting, government funding of public broadcasting, public notice requirements, copyright laws and antitrust regulations. In addition, the authors have collected an online directory of proposals for government intervention and links to public hearings and other activities on these issues.

What is Government's Role in Supporting the News Business?

2010-01-21T18:53:35Z

A new report on the role of government in supporting newspapers and other news organizations will be released by the University of Southern California’s Center on Communication Leadership & Policy on Thursday, January 28, 2010. That same day, a press briefing will be held at the National Press Club in Washington, D.C. at 9:30 a.m.

The report, Public Policy and Funding the News, is co-authored by Geoffrey Cowan (pictured, left), USC Annenberg School dean emeritus and director of the Center on Communication Leadership & Policy (CCLP), and David Westphal, former Washington Editor for McClatchy Newspapers and current CCLP senior fellow and USC Annenberg executive-in-residence.

The report examines a common myth: that the commercial press in the United States is independent of governmental funding support.

]]> According to the authors, "There has never been a time in U.S. history when government dollars were not propping up the news business. This year, federal, state and local governments will spend well over $1 billion to support commercial news publishers through tax breaks, postal subsidies and the printing of public notices."

Issues to be discussed include:
• The impact of falling government subsidies on the news business today
• A framework to consider various legislative and regulatory proposals to support news and information
• Public broadcasting support, including international broadcasting initiatives
• Antitrust regulations and intellectual property statutes
• Publication requirements for public notices
• Tax policies
• Postal rates and regulations
• Subsidies to expand broadband service

EVENT:
Briefing on Government’s role in supporting news organizations. Release of report “Public Policy and Funding the News”

LOCATION:
National Press Club, Holeman Lounge

DATE:
Thursday, January 28, 2010

TIME:
9:30 a.m. – 10:30 a.m.
Briefing and continental breakfast

PRESENTERS:
Geoffrey Cowan, director, USC Annenberg Center on Communication Leadership & Policy
David Westphal, senior fellow, USC Annenberg Center on Communication Leadership & Policy

SPONSORS:
Center on Communication Leadership & Policy
Annenberg School for Communication & Journalism
University of Southern California, Los Angeles, Calif.

This project is made possible in part by a grant from Carnegie Corporation of New York. The statements made and views expressed are solely the responsibility of the authors.

EMBARGOED MATERIALS:
For a copy of advanced embargoed materials, please contact Carrie Collins at 301-664-9000 x18; ccollins@bcc-associates.com or Amelie Hopkins at 301-664-9000 x10; ahopkins@bcc-associates.com.

Curtin, Glickman and Zacchino appointed CCLP senior fellows

2010-01-08T15:00:00Z

A top news executive and two leading global policymakers have been appointed 2010-2011 senior fellows of Center on Communication Leadership and Policy (CCLP) at the USC Annenberg School for Communication & Journalism. As part of CCLP, senior fellows contribute to the Communication Leadership blog, participate in public programs and lead projects in specific areas of engagement for the Center.

Newly appointed CCLP senior fellows are:

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Jeremy Curtin, who served until December 2009 as Coordinator of the Bureau of Information Programs in State Department, where he was the government’s senior public diplomacy officer. During more than 30 years in the Foreign Service, he specialized in international public affairs and strategic communications. He served with U.S. embassies in Europe and East Asia, including as Minister-Counselor for Public Affairs in Seoul, South Korea. He held a number of positions in Washington with the U.S. Information Agency, the National Security Council and the State Department. Working with the U.S. Agency for International Development after the fall of the Berlin Wall, Mr. Curtin directed a program to support independent media and other democratic institutions in newly free Eastern Europe. From 2002 to 2005, he was chief of staff and senior adviser to the Under Secretary of State for Public Diplomacy and Public Affairs.

As a senior fellow, Curtin is developing a program to explore how governmental and non-governmental organizations can incorporate new communication technologies, including social media, to achieve strategic objectives.

Dan Glickman, the former White House cabinet secretary and Member of Congress who serves as chairman and CEO of the Motion Picture Association of America. While at the MPAA, Glickman has led efforts to safeguard intellectual property, reduce trade barriers and enhance the movie ratings system. He also leads the industry’s advocacy efforts during a time of profound globalization and technological transformation. Prior to joining the MPAA in 2004, Glickman was the director of the Institute of Politics at Harvard University’s Kennedy School of Government. He was Secretary of Agriculture during the Clinton administration and previously served for 18 years in the U.S. House of Representatives. During that time, he was an active member of the House Judiciary Committee, where he was a leader on technology issues.

As a senior fellow, Glickman will work on programs exploring the role of media in a democracy with a special focus on government and campaign finance regulations.

Narda Zacchino, an author and award-winning journalist who served as a top editor at the Los Angeles Times and San Francisco Chronicle. During her 31 years at the Los Angeles Times, she was a reporter, government and politics editor, Sacramento bureau chief, editor of the Orange County edition, deputy managing editor and vice president. She was deputy editor of the San Francisco Chronicle from 2001 until 2007, when she left to co-write a book on NFL star/Army Ranger Pat Tillman with his mother Mary. Zacchino was an editor at the Center for Investigative Reporting before co-founding Time Capsule Press, whose inaugural book, The LA Lakers: 50 Amazing Years in the City of Angels, was published in October 2009. She is an editorial and business consultant at Truthdig, a daily news website and is currently working on a new book about California.

As a senior fellow, Zacchino will work on programs exploring the role of media in democracy with a focus on state government financial crises.

In addition to the new appointments, current CCLP senior fellows include Neal Baer, Cinny Kennard, Adam Clayton Powell III, Kit Rachlis, Richard Reeves, Orville Schell, Derek Shearer and David Westphal.

“Each of our remarkable senior fellows is finding ways to navigate some of the most challenging issues facing democracy in this era of profound changes in culture and technology,” said Geoffrey Cowan, dean emeritus of the USC Annenberg School and director of the Center on Communication Leadership and Policy. “We are thrilled that Jeremy Curtin, Dan Glickman and Narda Zacchino will be joining the Center on Communication Leadership and Policy to help instruct students, engage in public discourse and advance research efforts in these areas.”

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.

Frontline's Fanning decries commercialism in public broadcasting

2009-12-22T18:52:31Z

Public broadcasters face grave risks of losing credibility and trust through increasing commercialism of their work, says David Fanning, founding executive producer of the award-winning series Frontline.

It is "shameful" he says about the ways some public stations use pledge drives to market products for local sponsors. "This is our deepest embarrassment as public broadcasters...we spend more of our energy and promotional time pushing programs that have nothing to do with our mission."

Fanning delivered remarks at the annual James L. Loper Lecture in Public Service Broadcasting in November before an audience of public broadcasting leaders, community leaders, scholars and students.

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The program also honored USC Annenberg School dean Ernest J. Wilson, III, (pictured, left, with fellow CPB board member Bruce Ramer) who was recently elected to chair the Corporation for Public Broadcasting Board of Governors.

While sharing his inspiring career trajectory as a young filmmaker in South Africa to executive producer of a weekly documentary series for PBS, Fanning spoke about the tremendous potential FRONTLINE films have to impact policy. He recalled an experience shortly after 9/11, which he described as an “awesome responsibility for journalists.”

“Hunting Bin Laden was made two and a half years before 9/11. It was the film we rebroadcast two days after that tragic event, to extraordinary public response," Fanning said. "In fact, the morning after, PBS got a call from the White House, saying Vice President Cheney wanted a copy ...Those next days, in packed screenings on Capitol Hill, we were literally briefing the Congress and the US government on who was Osama Bin Laden and what was Al Qaeda.”

According to Fanning, such narrative documentaries are highly expensive and make little economic sense for networks. “It only makes journalistic sense. And that’s if you believe that in an increasingly complex world, someone needs to pick through the mass of information that comes flooding at us day and night, and choose a path through it.”

Fanning discussed the unique responsibility of public broadcasting and the funding challenges facing the industry. To survive, he believes, "we should be arguing that the best hope for this whole system is to build it around a mission for journalism."

On a cautionary note, he adds, "I am particularly concerned about a threat to our essential public identity. This is already happening. They‘re called “sponsorships”, but they are essentially commercials all over public broadcasting websites, local and national, radio and television. I’ve argued strenuously that we are threatening our special status as non-commercial media ... we all swim in a sea of commercialism, and that’s precisely why we need to keep ourselves clean of it."

"One day, I’m afraid, when most of our work is experienced on the web, we will wake up and the public will say we’re no different from the rest of them. Why should we give you our membership money? And why should the government give you our tax dollars?"

For Fanning, it all comes down to a question of intelligence. “It is, and has to be, our watchword. If we can’t say that the idea, the story, the film, we’re working on is intelligent, then we shouldn’t be doing it. In fact, we shouldn’t be given the means to do it. Someone should take away the money they give us to produce these films.”

Also attending the program were public broadcasting pioneer James L. Loper, Ph.D. (pictured with his wife Mary Lou) the honorary chairman of the Loper Lecture series, and philanthropist H. Russell Smith, former board chairman of KCET in Los Angeles. The Loper Lecture is made possible through the generous support of the H. Russell Smith Foundation.

Watch the Loper Lecture by David Fanning>>

Read Fanning's remarks>>

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.

2009: A year for philanthropy-driven news

2009-12-15T21:53:30Z

This article appeared as an op-ed in the Sunday, Dec. 13, edition of Newsday.

Will news nonprofits bankrolled by foundations and philanthropists be pillars of the future media ecology? To judge by the fast decline of mainstream media's business model, and the fast rise in philanthropy-funded journalism, it's starting to look that way.

This has been an extraordinary year for the creation of new-media organizations and Web sites, and a big reason is the money that foundations and wealthy individuals are investing. Thousands of community news sites have been launched, and most of the prominent ones are nonprofits. Just in the last month or so we've seen launch announcements about the Bay Area News Project (with $5 million from Warren Hellman), the Texas Tribune ($4 million from John Thornton and others) and the Chicago News Co-operative (grant money from several foundations).

]]> But community news sites are only one of the arenas in which nonprofits are rapidly filling the news vacuum. ProPublica (with $10 million a year from the Sandler family) is leading the revival of investigative reporting, and it's hardly alone. State and regional investigative reporting nonprofits have emerged in New York, Massachusetts, Colorado, California and Washington state; more are in the works.

Nonprofits of a different sort – universities and their journalism schools – also are gearing up. In California, UC-Berkeley journalism students are joining forces with the Bay Area News Project. At the University of Southern California, more than 100 students working on the news site Neon Tommy are producing journalism that serves Greater Los Angeles, not just the campus.

Will the growth of these nonprofit news sectors continue? In the short term, almost certainly. The primary factor that caused it – public concern about the hollowing out of mainstream media – isn't likely to end soon. Moreover, these projects have been successful innovation experiments, demonstrating that news organizations much smaller than the daily newspaper can produce news that has value and impact.

That isn't to say there aren't questions about nonprofit news. What about nonprofits' independence from funding sources, or their ability to compete with for-profits? And the big question, of course: sustainability. It's foolish to rule out long-term philanthropic funding. But it's probably true that most foundations and philanthropists are likely short-term investors.

Even now, though, we can see the ground shift, with new kinds of organizations putting money into news and information. Non-governmental organizations like Human Rights Watch are adding news units designed to get their message out. Labor is also entering the picture, giving money to Web news sites like the soon-to-launch Voice of Orange County in California, with expectations that these sites will probe issues of interest to their workers. This trend will take us deeper into the worlds of advocacy and agenda-driven journalism, a brand of news that used to be commonplace in the United States but that mostly disappeared with the arrival of monopoly newspapers and big networks.

This will make for a chaotic and unsettling period, where old boundary lines are likely to break down. The good news is that the disparate contributions of nonprofits, for-profits and non-news organizations have the potential to create a news ecology far richer and more democratic than the one that's fading away.

Entrepreneurship and the Community Web: Motherlode of ideas

2009-12-11T22:39:05Z

One of them is fueled by a $2 million investment and embarked on a plan to establish community news network in 50 American cities. Another is a south Los Angeles site serving a neighborhood just 1 square mile in geography. One has been in the community news business for six years; another is just now starting to monetize his site.

These were among the news sites represented at Friday's "Entrepreneurship and the Community Web" conference at the University of Southern California. To my knowledge, anyway, it was the first time a large group of community news sites had ever gotten together in California. It was obviously overdue. The participants fed off each other's zest for their work, and left Los Angeles with a productive list of good ideas. You can watch the entire daylong meeting here -- and read another account by analyst Peter Krasilovsky here.

]]> One of the best takeaways came from afternoon keynoter Jonathan Weber, who runs NewWest in Missoula, Mont. Weber has become known for the series of conferences he runs each year on topics his news site targets -- issues like development, water, the environment. What was new to me is that he's been able to use these conferences to offer continuing-education credits in a variety of professions that require them -- planning, real estate, engineering, etc. That helps strengthen the base of people willing to pay the $300 or so registration fees -- and gives him a conference profit margin of about 50 percent.

You couldn't help but be impressed -- I couldn't anyway -- by the range of ideas and approaches and geographies of the 15 site owners who told their stories on Friday. That's true, of course, despite the fact that very few are doing little more than breaking even on their operations, if that. But reading past the details, I'd be shocked if we don't see continued rapid expansion of the community news-site space. And as veteran Barry Parr of Coastsider said, if you wait till the business-model problem is solved, it's too late.

Here's a smattering of highlights from my notes:

BIGGEST FINANCING: Amra Tareen of AllVoices, the Bay Area citizen journalism site, represented the best-financed operation -- she recently completed a second $4.5 million round of funding. And she reported new details on her business' attempt to monetize its 4 million monthly uniques. Her 2010 revenue target is $2.2 million, and she's in the market to beef up her advertising effort. AllVoices uses algorithms and a community rating system to present 220,000 "citizen reporters" worldwide. Currently 40 percent of the contributors are from the United States.

BIG PICTURE: Morning keynoter Jarl Mohn (venture capitalist, formerly chief executive at MTV and E! Networks) offered participants some guideposts for how to think about entrepreneurship in their own lives. First, consider the 80-20 rule. Spend 80 percent of your time running the business but reserve 20 percent for getting away to brainstorm new ideas. His own experience: You have to physically get away to really make it work. Second, think about content as a continuum from commodity to creative. Unless you can figure out how to replicate commodity content many times over, the creative side is where you want to be.

GOOD NEWS/BAD NEWS: Consultant Peter Krasilovsky forecast robust growth in the local online ad space, which is now a $30 billion-a-year business. (Online represents 19 percent of local ad spending.) The challenge: How to get at that money in a way that costs don't consume all the revenue. Krasilovsky said that on average, most small businesses spend just $1,500 in advertising. Self-serve approaches hold promise, he said, but they're not there yet. (Jonathan Weber later noted that his approach at NewWest is to focus on a select group of high-volume advertisers that provide decent margins and quit trying to monetize smaller advertisers.)

AD NETWORK: Ben Ilfeld of SacPress.com previewed plans to announce a local advertising network of the many small news sites in Sacramento. The announcement is to come this week, and will involve working with Adify. Ilfeld described what sounded like a complex but necessary step to achieve scale in a market with a multitude of tiny operations. One approach: Each participant in the ad network can select a small list of Do-Not-Sell businesses that are off-limits to the overall network.

A NATIONWIDE COMMUNITY NETWORK: Chris Jennewein has big ambitions: a 50-city network of community news sites whose competitive advantage is centralized operations for tech, billing, SEO, analytics, etc. So far he's launched two -- San Diego News Network, the Southwest Riverside News Network -- and expects to christen a third on Feb. 1 in Orange County. The San Diego site has a staff of eight journalists and 12 business-side staffers, plus 30 contributing writers and editors. The Riverside operation is much smaller, with an editor, reporter and ad salesperson. The company's aims are $10 CPMs, which he says are occurring so far in San Diego and Riverside. Jennewein's for-profit launched with $2 million in investment.

CONFERENCES AT NEWWEST: Jonathan Weber hosts three to four conferences a year, and they bring in $45,000 to $80,000 apiece. His 50 percent margins have been achievable in part because of the year-to-year repetition that drives down costs. In addition to the registration cost, each conference has sponsors that pay between $750 to $6,500. (The sponsors, he noted, have no say in the conference program.)

MORE FROM WEBER: Reflecting other speakers, Weber said local advertising is a "tough, tough game... We haven't cracked that yet." It's an extremely competitive environment, he said, and sales management represents a high barrier to success. On other topics: Weber is narrowing the focus of his business, recently selling a small indoor-advertising component. "We were getting to be a teeny-tiny media conglomerate." On longevity: NewWest, launched in 2005, is now a break-even company. "We've gotten a lot of business in the last 18 months because we've been around." On citizen journalism: "We thought it was going to be a lot bigger."

THE VALUE OF PRE-LAUNCH COMMUNITY DISCUSSIONS: Susan Mernit and Kwan Booth provided a snapshot of the newly launched OaklandLocal, which attempts to tap into the rich nonprofit ecosystem of the Bay Area. (The site debuted with 35 nonprofit partners.) Mernit said she and others spent four months talking to nonprofit organizations in Oakland, so on launch day the site had strong receptivity from many quarters. She said the roughly 12,000 uniques in the first month was much higher than expected. One concern is sustainability. One of Mernit's partners told her: "We're strip-mining people's goodwill."

THE KISS STRATEGY: Barry Parr has tried all number of advertising approaches at his Coastsider site, which has been in operation for five-plus years. His current strategy: Keep it as simple as possible. "I don't talk about clicks," he said. "It's totally about branding... I basically tell an advertiser you can be on every page of Coastsider for $300 per month." The result, he said, is that he's getting the enviable CPM rate of $30.

VOLUNTARY SUBSCRIPTIONS: We determined that Peter Sklar was the dean of the conference, his EdHat site in Santa Barbara having launched in 2003. Sklar's innovation is voluntary paid subscriptions of $1 per week. So far 450 people are contributors, yielding almost $25,000 a year. (One of the perks of membership: You get to be identified on the site; non-contributors must remain anonymous.)

THE EXIT STRATEGY: Julia Scott was a member of the first-ever Entrepreneurship Boot Camp earlier this year sponsored by the Knight Digital Media Center. She now presides over the robust BargainBabe site, where she offers her readers tips about discounts, coupons, etc. She was fresh off an appearance on Good Morning America where she offered her expert advice. Scott is looking to sell her business in one to three years. Why? She wants to make BargainBabe merely the first of several businesses she wants to incubate.

Check out the video for additional presentations from Eric Richardson of BlogDowntown, Louis Freedberg of CaliforniaWatch, Anh Do of LA.Spot.us, Scott Flodin of Total Capitol, Jake Bayless of EmpireReport, Eddie North-Hager of LeimertParkBeat, Tara Leonard and Maria Gaura of SantaCruzWire -- plus Michael Overing and Ariel Fox on legal issues for bloggers.

We'll have more on this conference at its aftermath, including a survey from California news site operators on their traffic and balance sheets.

Below are the presentations that were given at the conference:

Peter Krasilovsky presentation

Peter Sklar presentation

Chris Jennewein presentation

Susan Mernit & Kwan Booth presentation

Julia Scott presentation

MIchael Overing presentation

Scott Flodin presentation

Eddie North-Hager presentation

Bloggers and the First Amendment: Shield Law Test

2009-12-11T01:02:10Z

(Note: This is the second in a series of posts about this topic by Kelsey Browne & Ariel Fox)

Finally, on its 17th try, the Senate Judiciary Committee voted to send the proposed Federal Shield Law to the floor. This is promising, particularly because the Senate bill’s definition of who would be eligible for Shield Law protection – as it currently stands – is pretty good for bloggers, and better than the House bill’s definition. As we discussed previously, the House’s version restricts coverage to those who receive a substantial portion of their livelihood or substantial financial gain from their journalistic work, whereas the Senate’s new version protects those whose “primary intent” from the start is to gather and disseminate news to the public. Why is the Senate’s current definition better? Because an intent to disseminate news to the public, from the beginning of the journalistic process, is more reflective of an engagement in the journalistic process than a paycheck, particularly given the recent proliferation of volunteer reporters and news sites.

We propose a definition of “covered persons” under the Shield Law in which primary intent to disseminate news to the public plays a threshold role. In addition to this primary intent, and closely related to it, is the requirement that the topic matter be of interest to the public – not personal gossip. Once – and only if – those two requirements are met, a judge should consider three related factors: credibility, accountability, and the established nature of the news site.

]]> Primary intent is of the utmost importance because the purpose of shield laws should be to protect journalists and their sources so that those journalists can provide newsworthy information to the public. This idea is at the root of the constitutional privilege, even if it is not at the root of many state shield laws, which, as Cydney A. Tune writing for the Practicing Law Institute (PLI) explains, “define the protected class more narrowly than the First Amendment does by focusing on the claimant's affiliation with a type of news entity rather than on the intent the claimant had in gathering the information” (PLI Patents, Copyrights, Trademarks and Literary Property Course Handbook Series March-April 2009, Blogging and Social Networking: Current Legal Issues, 128-29). If the goal of a source, in speaking to a writer, or a writer, in listening to a source, is not to share or learn information that will then be provided to the public, there is no reason to grant special protection to the source or the writer. Shield laws were never intended to encourage secretive relaying of information in general. They were intended to encourage speaking to the press, so that the press could inform the public. O’Grady v. Superior Court, one of the few cases to consider internet postings and shield laws (here, California’s), notes how a website can be deserving of protection if, “like any newspaper or magazine,” its “raison d’etre [is] the dissemination of a particular kind of information to an interested public.” This particular raison d’etre is and has always been the driving force behind the press, and, in order to claim the protection of the press, must be the driving force behind a blogger as well.

A second, related threshold inquiry concerns the subject matter of the blog. Blogs range a wide gamut, but in order to claim shield law protection they should contain general information that is newsworthy to an audience. While the audience interested in the news need not be national, nor even a large part of the population, it should be more diverse and larger than the bloggers’ circle of friends. As Amy Bauer notes, while more than half of bloggers discuss personal – i.e., non-newsworthy – topics, “42 percent regularly post about news and 35 percent about politics” (770). Bauer argues, and we agree, that, “The more frequently a blogger posts about newsworthy information, the more likely she is functioning as a journalist within the meaning of the FFOIA [Free Flow of Information Act] and the purpose of shield law protection” (770). While we believe the particular blog post in question should be “news” in order to be protected, other posts—appearing in the same site, by this author or others—can be helpful in determining whether or not the subject matter of the blog is news. One thing to be clear about, however, is that some editorializing should not remove a post or a site from being news. Just because a blog contains an opinion does not mean it does not also contain information the public might find newsworthy. Indeed, as Bauer notes, “Many established media contain at least some--and a number contain almost exclusively--editorials and opinion pieces” (770). Maureen Dowd and George Will deserve just as much protection as their colleagues ostensibly reporting just on the facts.

Once the two threshold components have been met, the following factors can augment a blogger’s argument for receiving a protection that would be afforded to traditional journalists. Because this is a highly fact-specific inquiry, it should be left to the judge’s discretion to decide what weight to give these factors in each scenario. Clearly these components – credibility, accountability, and the establishment of the site – are interrelated, as they all speak to the legitimacy of the organization.

The first factor is the credibility of the author and the site, which can be demonstrated in a few different ways. Although bloggers often lack the resources to hire copy editors and fact checkers, which can provide the same editorial review process as newspapers and other mainstream media outlets, a blogger can develop a system of verifying information by stating the source of information whenever possible (769). Keeping thorough notes and conducting extensive research demonstrates a commitment to accuracy that enhances a blogger’s credibility (769). Bloggers can also take advantage of the nature of the medium, which allows an author to link directly to his or her sources to provide further verification. The number and types of sources are a good indication of the bloggers’ reliability (768). Several links to primary documents such as a government report or data from a respectable agency, for example, enforce an author’s credibility. A lack of citations, or links to websites with anonymous posters, might raise some doubts as to the truthfulness of the information. Although regular use of anonymous sources raises a red flag, a blogger who relies on anonymous sources “sparingly and justifiably,” can still be using a journalistic work process (768). Relatedly, the number of times an author or a publication is linked to as the source also bolsters the credibility of that particular blog. If other journalists or bloggers refer to a particular site, this could mean that the site is a reputable publication (487). The more a site or a blogger is cited by others, the more likely it is that that person is a respected source within the community. For clarification, one thing we do not believe adds to the credibility of a blogger is the fact that he or she can be “commented upon” or “checked” by online readers around the world. Though some have used this as a defense of bloggers (482), what is often anonymous commenting does not truly increase the veracity of a post.

Another factor to consider is the accountability held by the blogger, or the extent to which the writer is putting his or her reputation on the line. Someone who is clearly identified as the author of a particular post, for example, has much more to lose than someone who is writing anonymously (487-488). This is particularly true when someone lists not only their name but also professional affiliations or credentials, which can be verified. An author who openly associates with the information placed on the site gives credence to the argument that the information is accurate, reliable and legitimate. While this may not always be the case, the fact that someone is willing to accept responsibility for the information on his or her site shows his or her conviction, in the same way that a journalist must stand by the information that appears under his or her by-line in a newspaper. Accountability can also be demonstrated by the degree to which there is transparency in the ownership and sponsorship of the site (583). This helps to determine what possible motives a blogger may have in writing about a particular subject. A site that is owned by an energy company, for example, might have a severe bias if reporting on energy policy and would, therefore, be less deserving of shield law protection. Knowing who is paying the author and producing a site is important to determine whether the reporting and writing is objective journalism or disguised propaganda.

The final factor that should be considered when evaluating whether a blogger qualifies for a reporter’s privilege is the established nature of the site on which the blogger posts. The frequency and regularity of publication on the site ensure that a blogger has a regular pattern of newsgathering and news dissemination. While we do not feel that there needs to be a minimum number of articles published per week, we do think that consistency in publication shows that the site has a clear and established mission to gather and disseminate information. The amount of time a particular site has had a permanent web address also helps to show the degree to which it is a stable publication. Both the frequency of publication and the length of time a site has occupied its current web address were factors considered in O’Grady v. Superior Court. Additionally, the court considered the number of unique visitors to the site each month. To this, we would add that the number of hits a site receives over a period of a day or a week should also be considered. If a site receives heavy traffic, this could indicate that the site has “a ‘following’ that looks to it for news and information on a regular basis for one reason or another” (487). The combination of the characteristics of publication, the location on the web, and the relationship with the audience creates a picture of the site that helps to differentiate a serious publication with a journalistic function from those that are not. Looking at the established nature of the site will also prevent people from claiming a reporter’s privilege without necessarily serving a reporter’s purpose. This can help the court in determining whether the site and those who publish on it are deserving of the same protections afforded to journalists who work in more traditional media.

This test delineating when a blogger is a journalist stays true to the purpose of the shield law by using intent and subject matter as the threshold qualities needed for any sort of privilege. This will limit the application of the shield law to those pursuing specifically newsgathering activities, as opposed to protecting anyone with the ability to publish online. The tiered factors provide a guideline for judges to ultimately determine whether or not a blogger would qualify while maintaining judicial discretion. It should be noted that any privilege afforded to journalists – whether publishing in print, broadcast or online – should be qualified and subject to a balancing test that weighs freedom of the press and the people’s right to know against other potentially conflicting values, such as national security and the grand jury process.

Presented at FTC: New players help strengthen news scene

2009-12-01T18:39:04Z

Remarks prepared for delivery Dec. 1 at Federal Trade Commission workshop on "How Will Journalism Survive the Internet Age?"

Today, anyone can aspire to be a news provider, and increasingly, people and organizations are deciding that’s exactly what they want to be. It’s this process -- many voices instead of few -- that is fundamentally transforming our news ecology.

The new players come in all sizes and forms, including the traditional for-profit model. I'll focus here on nonprofits and also on non-news organizations that are quickly emerging as news producers. These newcomers are not making up for all the resources shed by mainstream media. But they are making up for a significant, perhaps growing, share. And in places like San Diego and New Haven, you can argue that a more robust news environment has already taken hold.

]]> It won't be long before nearly every community has at least one news blog or site that reports on civic life. Sometimes, it'll be a citizen's passion; in others a paid staff of 1 or 5 or maybe 10 reporters. You can see the 10-reporter version at nonprofits like the Voice of San Diego or the St. Louis Beacon, as well as recent startups like the Texas Tribune and the Bay Area News Project.

Although even the largest community news site today has only a fraction of the news staff of their mainstream cousins, it's noteworthy that most are targeting the heart of civic life – which is the territory we're most worried about losing. The foundations and philanthropists subsidizing these operations may well be giving us a window into the future.

We're also seeing rapid growth in the area of nonprofit investigative reporting – not just nationally but in places like Massachusetts, Wisconsin, Colorado and California, where new state investigative centers have bloomed.

There are many questions about these new nonprofits, not least whether they’ll be sustainable in the absence of a robust revenue model. But the examples of the Voice of San Diego, now in its fifth year, and the Center for Public Integrity, about to celebrate its 20th birthday, suggest sustainability is not impossible.

Other institutions like universities and their journalism schools are becoming increasingly important news providers. A key point here is that not all of the new players are news organizations. Foundations like the Kaiser Family Foundation and nonprofits like the Hechinger Institute have established news organizations devoted to their issues of interest -- in the case of Kaiser, health; in Hechinger‘s case, education. NGOs like Human Rights Watch have added news teams to disseminate the organization’s work. Labor unions in Chicago and California are bankrolling news sites that pay attention to worker issues.

Governments, too, will play a role. My USC colleague Geoff Cowan and I wrote this week that federal, state and local governments are directing well in excess of $1 billion a year in subsidies to commercial news media, continuing a trend that began even before the birth of our country. While these particular subsidies are almost certain to decline, new ones are already emerging.

In Los Angeles, county government recently hired an LA Times journalist to report on county issues. Why? Because it felt the public wasn’t learning about its issues from the local press. And because it now has the wherewithal to do something about it -- namely a Web site full of county news.

Now, all of the examples I just cited about non-news organizations raise questions. Isn’t the Los Angeles county government site really public relations and/or propaganda? How can we be sure the Kaiser Family Foundation won’t let its views on health seep into its news coverage? Same question for Human Rights Watch and its research on rights abuses around the world. Won’t the sites paid for by labor give us a pro-worker point of view.

Just as we debate the point-of-view programming today on Fox or MSNBC, these are valid questions. So far, though, we can see some answers. In every case, the work of these organizations reads like legitimate journalism. So here’s probably another place we can glimpse the future: a universe in which many, many organizations -- some with axes to grind -- dive into a newly opened world of journalism. As news consumers we’ll have to determine whether we’re reading legitimate information we trust, or a crafty PR deception.

We don’t know yet whether a better informed citizenry will result. But with the dramatic expansion of news voices, and new hybrid models of journalism, there’s little doubt that the potential is there.

Thank you.

Cowan & Westphal: Reality check. Shrinking government support contributes to news media economic decline

2009-11-30T21:33:13Z

A mythology about the relationship between American government and the news business is again making the rounds, and it needs a corrective jolt.

The myth is that the commercial press in this country stands wholly independent of governmental sustenance.

Here's the jolt: There's never been a time in U.S. history when government dollars weren't propping up the news business. This year, federal, state and local governments will spend well over $1 billion to support commercial news publishers through tax breaks, postal subsidies and the printing of public notices.

And the amount used to be much higher.

]]> This topic is back in the news because of the rapid economic decline of newspapers, news magazines and many broadcast outlets. Amid deepening concern about the impact on our democracy, some are calling on the government to get involved. Leonard Downie and Michael Schudson were among the latest, urging limited government aid to support the cause of news and information. The Federal Trade Commission is among the federal agencies wading in, scheduling discussions Dec. 1-2 to gauge whether government intervention is needed.

The truth is that American government and the news business have always been joined at the hip, and not just through the government's copyright protections, restrictions on anti-competitive practices and regulation of the public airwaves. It's also through the infusion of tax dollars.

The Postal Service's subsidy of mailing costs for newspapers and magazines, which dates back to colonial America and the Postal Act of 1792, is often raised as Exhibit A. Less well known is just how large this subsidy was – and how much it has shrunk. As recently as the late 1960s, the government was forgiving roughly three-fourths of print publications' periodical mailing expenses, at a cost of about $400 million annually (or, adjusted for inflation, about $2 billion today). Much of that disappeared with the Postal Reorganization Act of 1970 and in subsequent cutbacks. But the Post Office still discounts the postage cost of periodicals by about $270 million a year.

Postal subsidies, though, are just the start of the story. Federal and state governments forego about $890 million a year on income and sales tax breaks to the newspaper industry, most of it at the state level. The actual figure is probably much higher because many states don't report tax expenditure details.

Another major form of government support comes through public-notice requirements, which also have their roots in colonial America. These laws require cities, counties and school districts, along with state and federal agencies, to buy advertising space in newspapers to disclose a range of government actions – such as plans for a new school. Take a look at the Wall Street Journal, for example, and you’ll usually find a page or more of federally paid and mandated ads – in impossibly small print -- announcing property seizures. Those are public notices, and nationwide they bring in hundreds of millions of dollars in revenue.

But all three of these categories are shrinking. For example, legislation has been introduced in 40 states to move public notices to the Web, and the Department of Justice has already announced it will shift property-forfeiture notices from newspapers to its own Web site. The impact would be another blow to newspapers, especially small ones: In 2000, the National Newspaper Association estimated that public-notice billings accounted for 5-10 percent of newspaper revenue.

Postal subsidies, tax breaks and public-notice requirements only begin to describe the ways governments at every level have supported the American news industry. Municipalities provide newspapers with enormous sales and marketing benefits by allowing vendor boxes on public sidewalks at little or no cost to the newspaper companies. Drug advertising regulations by the Food and Drug Administration have been a boon to magazine publishers because they require TV ads to be accompanied by more specific disclosure, and magazines are one of the approved outlets. Commercial broadcasting has also benefited mightily, via the free use of government-licensed airwaves.

After backing the news industry for more than 200 years, the government should assess how it can be most helpful now, when the future of news and information is so uncertain. As it debates possible forms of support, the government should consider these principles:

First and foremost, do no harm. A cycle of powerful innovation is under way. To the extent possible, government should avoid retarding the emergence of new models of newsgathering.

Second, the government should help promote innovation, as it did when the Department of Defense funded the research that created the Internet or when NASA funded the creation of satellites that made cable television and direct TV possible.

Third, for commercial media, government-supported mechanisms that are content neutral -- such as copyright protections, postal subsidies and taxes -- are preferable to those that call upon the government to fund specific news outlets, publications or programs.

However policymakers proceed, they should do so based on facts rather than myth. The government has always supported the commercial news business. It does so today; and unless the government takes affirmative action, the level of support is almost certain to decline at this important time in the history of journalism.

This post is co-written with CCLP Senior Fellow David Westphal.

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.