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The Demise of Satellite Radio?

A little more than a month ago, former satellite radio competitors Sirius and XM merged their services. It was hailed as the beginning of a new era.

Or is it the end?

Satellite radio, which emerged only in the beginnig of this decade, is quickly becoming technologically obsolete. In the new world of saturated wifi and broadband access, the very concept of satellite radio is being questioned. And economically, the news is worse.

The newly created Sirius XM Radio Inc. is trading at about 12 cents a share. The company is $1 billion in debt, which is due sometime in 2009. Its biggest patron, the automakers of Detroit who outfit new models with satellite radio, are on the verge of bankruptcy and face an uncertain future.

Just four years ago, Sirius splurged by paying Howard Stern a record five-year, $500 million contract. Stern, once a ubiquitous presence on the radio, has virtually vanished from the public consciousness. Rest assured, there won't be another payday nearly as lucrative at the end of this contract. He just might retire.

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Matt Collins, New York Times

Meanwhile, old-technology (or "terrestrial) radio has defied all odds by plugging along. In July, Rush Limbaugh signed a new eight-year contract worth $400 million with Clear Channel Communications. Limbaugh said he never considered moving his popular franchise from the traditional network:

With 600 affiliates, that's an unmatched platform that essentially has ubiquity.

Much more ubiquitous than the vanishing satellites.

The Great Shrinking Papers (Cont.)

Coming on the heels of the Detroit newspapers' decision to curtail publication and delivery of their weekday papers, a few other dailies have followed suit with great reduction of printed papers.

The Tallahassee Democrat announced Monday that it's taking measures to reduce its paper production, eliminating the "TV Book" from the Sunday paper and shrinking the Monday and Tuesday editions. The paper cited dramatic losses in ad revenue as the primary reason for the reduction, after having trimmed 25 jobs in December.

Meanwhile, the Cincinnati Enquirer is eliminating classified ads from its Monday and Tuesday papers, also after cutting jobs and getting about 60 employees to take voluntary buyouts. And as with the Tallahassee Democrat, the TV listings will be either reduced or purged.

Declining ad revenue, in the face of a recession, has forced a number of papers to take dramatic measures to cut cost. In the newspaper business, the top two expense items are payroll (and a good chunk of which goes to non-newsroom employees) and newsprint. So far, most papers have sought to reduce cost by slashing staff and reducing the size of the paper in order to cut cost.

But how long can newspapers continue to shrink its product without massive loss of their customers? The year 2009 is shaping up to be a watershed moment for the industry. Without a sudden improvement in the economy, it's but a certainty that a significant number of papers will be printing their final editions next year.

A large-scale migration to the web, however, appears all but inevitable. And there is some good news in this department: Almost each of the top 30 newspaper websites saw huge gains in recent months. The Los Angeles Times' web site, for example, in November made a 143% gain in unique visitors compared to the same period last year. The historic presidential election helped, sure, but there's little doubt that many people today are still reading their newspapers - they're just doing it online.

USA Today Keeps Its Hold on No. 1

While newspapers were losing subscribers everywhere in 2008, USA Today managed to buck the trend. The nation's top selling paper now has a circulation of 2,293,000, up slightly from 2007. In fact, USA Today and Chicago Sun-Times are the only papers ranked in the top 20 that gained readership from a year ago, according to the annual BurrellesLuce Report.

The Wall Street Journal joins USA Today as the only papers cracking the 2 million mark. The New York Times, at No. 3, continues its alarming slide, losing nearly 80,000 in circulation from the past year to finish with just over 1 million. Los Angeles Times, New York Daily News, New York Post, Washington Post and Chicago Tribune follow as the only other papers clearing the 500,000 mark.

Of the top 15 dailies, five are in the New York metro area. Two-paper towns continue to disappear as New York and Chicago are the only cities with multiple papers ranked in the top 25.

Magazines, meanwhile, held up reasonably well from 2007, with the AARP publishing the top two ranked magazines, followed by Reader's Digest. The Huffington Post continues to be the top ranked English language blog. And for the first time, social networks appeared in BurrellesLuce's rankings, with Facebook checking in at No. 1.

There was some good news for the weathered Grey Lady. The Times still publishes the most-read Sunday paper, with a circulation of over 1.4 million. And its web site is by far the most trafficked among newspaper sites in the U.S., checking in at No. 26. The Washington Post's site, at No. 100, is the only other newspapers site cracking the top 100.

Heading for the Cliff with Blinders On

Sometimes I just don't get newspaper journalists, my onetime comrades-in-arms. With doom and gloom all over the newspaper business, many of them can't seem to see the big picture. Most often, they'd blame the impending demise of the papers on either corporate ownership or the Internet.

Here's latest example. Writing for the Wall Street Journal, Paul Mulshine of the Newark Star-Ledger thundered:

So if you want a car or a job, go to the Internet. But don't expect that Web site to hire somebody to sit through town-council meetings and explain to you why your taxes will be going up. Soon, newspapers won't be able to do it either.

Has it ever occurred to him that the web and the survival of newspapers need not be mutually exclusive?

For newspapers to stave off elimination, they need to start seeing the web as an ally, not an enemy. You can still practice journalism on the web, but you can't practice journalism when you're unemployed. What newspapers are facing now is mostly a technical issue, not one of their relevance. People still need journalists to do their jobs, they just don't necessarily need their news in the form of printed paper thrown at their doorsteps.

Glenn Reynolds and Will Leitch don't pretend to be - and they'll never replace - journalists. But instead of spending countless time bashing them, journalists need to open their eyes, and minds, to survive the Internet Age.

Web Blows By Papers as News Source

For the first time ever, more people cited the Internet than newspapers as their primary source for news, according to the latest Pew Research Center survey, conducted Dec. 3-7 among nearly 1,500 adults in the U.S.

Currently, 40 percent of the respondents say that they get most of their national and international news from the Internet, up sharply from 24 percent in 2007. Newspapers remain the top source for 35 percent, about even with the past three years, but down significantly from the 50 percent as surveyed in 2003.

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Pew Research Center

Television is still the top source for news, with 70 percent (multiple responses were allowed), though the web is closing in on it as well. Among young people (ages 18-29), the Internet has pulled even with TV, with each drawing 59 percent. Just a year ago, twice as many young people cited the tube over the web (68 percent to 34).

The Internet's gain in 2008 was partly fueled by the heated presidential election, during which a record number of people flocked to the web daily to get their political news. But the survey also confirmed perhaps the worst-kept secret in the media industry, that the viability of the printed press is in grave danger. The two trains have passed each other in broad daylight.

Grey Lady Selling Her Ball Team

Hard hit by the financial crisis and dwindling readership, the New York Times Co. is looking to unload its stake in a fabled sports franchise and its ballyard.

Why, it's the Boston Red Sox and Fenway Park, of course.

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The Times Co., according to the Wall Street Journal, is seeking a buyer for its 17.5 percent interest in New England Sports Ventures, which owns the Red Sox, Fenway Park and NESN, the dominant sports television network in New England. The company may also include the Boston Globe newspaper in the package.

It's well known that the New York Times is facing unprecedented financial crunch. In September, Mexican billionaire Carlos Slim acquired a 6.4 percent stake in the company for $127 million. It recently put its Manhattan building up as a collateral in an effort to secure a new loan to replace a $400 million credit line that's scheduled to expire in May 2009. It's reported that the Times Co. is $1 billion in debt.

The problem is that short of selling its assets - and this would be a terrible time to sell - the Times Co. has very few options. Its ad revenue took a huge dive so far in the fourth quarter and its flagship paper is continuing to lose readers (at least the print editions) at an alarming rate. The latest ABC circulation report puts the Times at just over 1 million readers, down nearly 8 percent from 2007 and a net loss of nearly 183,000 readers since its peak in 1993.

Adding to the Times' woes is the continuing erosion of its prestige. Just earlier this week, it was forced to admit that it had published a fake letter from Paris mayor Bertrand Delanoe criticizing Caroline Kennedy's senatorial bid. Its shoddy journalism was, well, appalling:

In this case, our staff sent an edited version of the letter to the sender of the e-mail and did not hear back. At that point, we should have contacted Mr. Delanoe's office to verify that he had, in fact, written to us. We did not do that. Without that verification, the letter should never have been printed.

Who knew it'd be so hard to find all the real news that's fit to print?

Beltway Marriage of Convenience

The Washington Post and Baltimore Sun have announced that on Jan. 1, 2009, the papers will share the majority of their content. The two papers were already part of the Los Angeles Times-Washington Post News Service, but previously they were prohibited from using each other's content. That restriction will be lifted by the new agreement.

Both papers insisted that this marriage of convenience will not result in newsroom cuts, but merely reassignments for reporters now doubled up on the same beats. The Sun will concede most of the coverage on the federal government, as well as the Navy football beat, to the Post, while the Post will be using the Sun's reports on northern Maryland counties and horse racing at Pimlico.

"I know journalists in both newsrooms may find this anathema," said Timothy A. Franklin, editor of the Sun, "but we're talking about daily, breaking, fairly routine stories so The Sun can use its resources developing original, unique content, which I think is a key part of our future success."

But one can't help but wonder if buyouts and layoffs would be imminent, particularly on the Sun's end. The paper is owned by the Tribune Company, which just filed for bankruptcy earlier this month and is looking to divest some of its assets, including the Chicago Cubs baseball team. Like just about every other paper in the United States, the Sun experienced a steep drop in readership in recent years. Its 2008 circulation is listed at 218,923, down 6 percent from 2007.

Top 10 Media Stories of 2008

Editor & Publisher released its top 10 "Newspaper Industry Stories of the Year." Of course, in keeping with the times, it's no longer simply the "newspaper industry." At least four of the 10 stories deal in some ways with the web and/or the business part of the media industry.

The top story, no surprise, is the rapid job losses in the newspaper business. Coupled with the hard-charging recession, the cuts reached apocalyptic proportions in 2008:

The U.S. Department of Labor estimates some 21,000 newspaper industry jobs disappeared this year. Somehow, newspaper owners continue to think that the way to handle economic downturns is to make their product worse be eliminating its most important asset, people. But with fewer reporters to dig up news as newspapers transition to the Web their content is going to look more and more like everything else online, limited and poorly reported.

That roughly echoed my sentiments when I applauded the Detroit newspapers' decision to reduce printing papers instead of cutting newsroom staff. Whether or not their bold gamble will set a new trend likely will become the top story for 2009.

Washington Post: Fair and Balanced

Former Washington Post reporter Ronald Kessler thinks the paper has turned a corner - veering back toward the center.

After for years competing with the New York Times to see who could do a better job trashing the Bush Administration, the Post has decided to reacquire its journalistic objectivity, according to Kessler. The turning point apparently was the appointment of Marcus Brauchli, formerly of the Wall Street Journal, as executive editor in September.

Kessler observes:

No longer do I pick up the paper to find slanted stories that suppress or ignore the other side or that mischaracterize issues to further a liberal agenda. Instead, honesty has been restored to the coverage. It has become more probing and interesting as well.

Last week, the lead story on Page One was, "Charter Schools Make Gains on Tests." Prior to Brauchli's takeover, it would have been unthinkable for the paper to highlight that a pet Republican approach to education was successful. When conservative icon Paul Weyrich died last week, the Post ran the story under a three-column headline on Page One. In contrast, The New York Times ran a story on page B11.

The question is if this trend would hold, now with the Democrats sweeping back into Washington. Would the Post scrutinize every move by the incoming Obama Adminstration or could it be that its grand strategy is to make nice with whomever is in the White House?

I'm sure the Washington Times would be very interested to find out.

White House vs. New York Times

Seems like the Bush White House is willing to take the heat on Iraq, Guantanamo, Katrina, the bailout and a whole host of goings-on that it may or may not have been the culprit.

But when it gets blamed on the housing meltdown, especially coming from the New York Times, the gloves are off.

The White House issued a blistering 500-word rebuttal accusing the self-styled Paper of Record of "gross negligence." The statement, released by White House Press Secretary Dana Perino, called the hit piece relying "on hindsight with blinders on and one eye closed.

The White House accused the Times of framing a hypothesis - "It's Bush's fault" - and going about proving it by ignoring any countervailing evidence:

There are many more reporting failures in this story -- failure to consider the impact of monetary policy; ignoring the regional nature of housing markets; and ignoring the Bush Administration's historic proposal to overhaul the nation's regulatory system, for example. But then a review of these issues would wave complicated the reporters' myopic point of view that only Bush Administration policies could possibly be responsible for the housing and finance crises.

White House counsel Ed Gillespie was more glib, telling Fox News: "They've had to mortgage their building in Manhattan to help make ends meet, and they've been reduced to junk-bond status. I don't know if the New York Times' shoddy reporting is the result of being in junk-bond status, or if their junk-bond status is what's resulting in their shoddy reporting."

The Times, meanwhile, offered a terse response with a plug to boot. Said Executive Editor Bill Keller:

The piece that has driven the White House spokesmen to such a show of apoplexy was based on on-the-record interviews with dozens of current and former officials of the current administration. It is part of an ongoing series that examines in depth the accountability of numerous players in the economic meltdown, including Congress, rating agencies, brokerage houses and the Fed. The series is available in full on our Web site, nytimes.com.

To Charge or Not to Charge ...

Joel Brinkley, a former foreign policy correspondent for the New York Times, had what he considered a revolutionary idea for floundering newspapers to regain their footing. In essence:

Now, here's my idea: The newspaper industry should ask the Justice Department for an antitrust exemption that would allow publishers to collaborate on a decision to begin charging for their Web sites. No paper would have to charge, and each paper could determine its own price. But if most papers in a region - San Francisco, Oakland and San Jose, for example - began charging for Web access at more or less the same time, many readers would likely subscribe.

Basically, Brinkley wants the Justice Department to allow the newspapers to practice a form of collusion so they can begin charging for original content. Collusion is required because unless almost all of the papers decide to get in, it would blow the pooch.

The problem with this thinking is that unless the entire world goes in on it, it just won't work. In fact, Brinkley's idea is really backward thinking - his old employer, the New York Times, had tried it and it didn't work. The Times Select concept was officially abandoned in September 2007 because paywalls only hurt business.

Newspapers would be better off thinking up ways to extract more out of their advertisers than the ol' pay-per-view route.

Watchdog of Media Watch

The newspaper business is in its death throes, apparently. But that hardly means journalism is dead.

The media industry is evolving at a breakneck pace in the opening stanza of the 21st century - and instead of just reporting the news, the media frequently find themselves in the news. Since we here at Real Clear Politics follow the news, it's become imperative for us to also keep up with the people who bring us the news.

A veteran newspaperman-cum-digital media maven, I relished this challenge. I got my first job as a paperboy at the age of 15 and worked up the newspaper food chain from there. In my 20 years as a journalist, I put in time both as an editor and a writer, covering diverse events ranging from the Super Bowl to Hong Kong's change of ownership.

Viewing the newspaper business as a sinking ship, I jumped into the high seas and surfed for the web. Three years ago I began a new life as the BCS Guru and six months ago I found my kindred spirits at Real Clear Politics and helped start our new international politics and news site Real Clear World.

Everyday, you'll find a little bit of something here covering the media - from the journalism realm to the business end. Your interest is most welcome, as are comments and tips. You may contact me at sam@realclearpolitics.com.


- Samuel Chi, December 2008