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The media stands accused of failing to foresee the global financial crisis, of a lack of understanding of the issues, and even of having a hand in the problems we now face. The Editors Weblog has been following the debate, beginning with an interview with the Managing Editor of the Financial Times, Daniel Bogler, who highlighted the problem of the media "fanning the flames" of the crisis. Is the media responsible, or are these accusations merely a knee-jerk reaction?

Danny Schechter is a respected investigative journalist and the author of Plunder, a searing indictment of the modern banking system, the role of government in finance, and the greed-is-good mentality. Schechter's book was published one week before the collapse of Lehman Brothers on the 1st of September, and it examines the very problems that were about to unfold. The Editors Weblog spoke to Schechter about the media's failure, the ethics of advertising, responsible journalism, and the cult of the CEO.

Two key failures

Schechter believes that there were two key areas where the media failed. He says that there was little or no examination into the new breed of exotic financial products that caused many of the problems, such as CDO's, and that the media ignored the warnings from community housing organisations of the predatory lending practises in some of America's poorest communities. "This was a big media failure, we were not warned about it" says Schechter. If Schechter's assertion is correct, why did the media fail to fulfil its role? Newspapers, and the media in general, are supposed to be the fourth estate, a watchdog for citizens. Is it a lack of knowledge on the workings of high finance or has the media lost its way and become part of the problem?

Why did the media fail in its early warning role?

Schechter believes that the media failed in its role because of vested interests. He points out that one of the key sources of revenue for newspapers is real estate advertising in weekend supplements and classifieds, as well as advertisements for credit card and refinancing companies. As a result, he argues there is a connection between the real estate and newspaper industry, their future and success are intertwined. Schechter says, "The newspaper industry is the marketing arm of the real estate industry. In some cities you actually had newspapers getting a piece of the action of sales through the ads that they generated. So they were actually part of the corruption of this whole relationship. So of course there was little real scrutiny about what was actually happening in the neighbourhoods where houses were flipping, where people who couldn't afford to buy houses were buying them with bogus mortgages. Newspapers were making money on the sales of these homes."

Schechter argues that after the dot.com bubble burst back in 2000, all the advertisements from these new emerging businesses stopped, so the $3 billion in lost advertising revenue for the media industry had to be found somewhere. Schechter puts forth that credit card companies and refinancing firms stepped into the gap. He points out that the majority of people do not automatically spend money that they don't have, but it was marketed to them through the media in advertising and life-style supplements. Most of the money that the media makes in advertising is in the last quarter in the run up to Christmas, newspapers run articles on the best presents to buy, and so forth, all of it driving a concept of "buy and shop" which "stimulates consumption." Schechter says, "for me, on the consumer front newspaper's are a marketing instrument and on the investment front it's a confidence building instrument. The media was part of this whole sales machine, and it happened at the same time that newspapers were cutting back on investigative reporting, and ironically expanding business news targeted at the business world; not at the general public, not on the economy and how it affects you and me."

Has financial journalism lost its teeth?

Another criticism levelled at business reporters is that they are too close to Wall Street and the City, and have too much respect for the institutions they are supposed to be examining. John Friedman of MarketWatch was at the press conference announcing the Bank of America's acquisition of Merrill Lynch and wrote, "the media were so polite and deferential to the two CEOs; they behaved as if the press conference were a victory lap for the financial services industry." Schechter believes that "business men are seen as heroes" and it's all part of the "cult of masters of the universe"; he cites the endless sycophantic articles about Bill Gates of MicroSoft and Richard Branson of Virgin. He argues that there is a kind of "cultural embedding, as financial journalists cover business, they become part of the scene, they identify with the players, go to the parties, they are increasingly in a world of fewer and fewer people that is cut off from the mainstream of American life." He believes that many financial journalists want to be like these Masters of the Universe that they write about every day.

Schechter also says that there is no real pressure at the top of media organisations to thoroughly investigate these companies. Thee reason being that they would be investigating their advertisers. As a result, there is no impetus behind financial reporting, no push for the truth and the heart of the story, not enough cynicism.

Furthermore, with the advent of multi-platform publishing and shrinking newsrooms, journalists are frequently, "fireman, going from one fire to the next. When you are doing that, there is very little time for reflective analytical reporting."

Where is the counter-narrative?

During an interview recently on the Editors Weblog, the FT's Managing Editor Daniel Bogler said, "It's unfortunate that the financial literacy and understanding of how things work in the City and of basic accounting and so on, is actually very thin in financial journalism." Schechter agrees with Bogler's point saying, "You have people who are not really very well educated covering these issues. Hence they go to a briefing and a company gives them a story, and they don't really have a counter-narrative."

Reviewing his argument, Schechter's assessment of the media is damning indeed; but it is not unilateral. Schechter points out that many newspapers and bloggers are asking the right questions and searching for the truth in this financial crisis. He cites the UK's Telegraph and Guardian newspapers, saying they "have been way ahead. I find the coverage of the British media better, and increasingly much more critical of what is happening."
 
Omission and Commission

Looking back over the rapid collapse of the world's financial markets, and the uncertainty ahead, Schechter says it is, "a financial system failure, a regulatory failure and a media failure. Everyone is willing to talk about the first two, but they are not willing to discuss the last one. We are all in this. It's a media failure of omission and commission."
 

It isn't a secret that the American newspaper industry is experiencing difficult times, as core print revenues and circulation are falling. Many think that online news, which has been accompanied by double-digit online advertising growth in recent years, can make up for the decline in print. But several studies and articles think otherwise.

"The Web audience is growing at a great clip, while print circulation is not. And online revenues are growing faster, too, albeit from a smaller base. If the trend continues, there's little doubt that -- "eventually" -- online becomes the main business," said Bill Keller, the New York Times Executive Editor, in a 2007 interview with IwantMedia.

But as sanguinity faces off with the numbers, perhaps we shouldn't hold our breath for "eventually."

Internet revenue is growing -- in 2003, newspapers collected a mere $1.2 billion from online advertising; last year the figure was nearly $2.7 billion. "We're growing at a double-digit rate," said Randy Bennett, of the Newspaper Association of America.

But there's a problem. Scott Karp, of Publishing 2.0, has dubbed it the "10% problem." Karp explains that looking at New York Times print and web circulation numbers, "What you find, with some modest rounding, is that print circulation is about 10% of total audience reach, while online advertising revenue is 10% of total ad revenue -- the economics are nearly the perfect inverse of what they should be."

Why, as audiences shift to the web, are advertisers not following?

Although newspaper websites are attracting a lot of visitors, they aren't keeping them there.

According to the American Journalism Review (AJR), the typical visitor to nytimes.com, which attracts over 10 percent of the entire newspaper industry's online traffic, spent an average of just 34 minutes and 53 seconds browsing its extensive editorial and interactive offerings in October. That's 34 minutes and 53 seconds per month - just 68 seconds per day online. By contrast, according to Scarborough Research, print readers report spending 16 minutes a day with their newspapers.

And as small as 68 seconds a day is -- it's actually about three times longer than the average of the next nine largest newspaper sites.

Although a minority of news hounds linger on the sites, Greg Harmon, director of Belden Interactive, estimates that as many as 60 percent of online newspaper visitors are "fly-bys," people who use the site briefly and irregularly. "Everyone has the same problem," explains Jim Brady, editor of washingtonpost.com. The news industry's continuing challenge, Brady says, is to turn "visitors into residents."
 
Thomas E. Patterson, of Harvard University, who has conducted a yearlong study of 160 news sites, also offers an intriguing, if not unsettling, theory: the web is a fundamentally different way of viewing information, and as such, web ads may not be as effective as the traditional kind. "I'm not sure [advertisers] are convinced yet about how terrific a sales tool [a Web display ad] is," said Patterson. "The evidence isn't strong yet that it can drive people into a store the way a full-page newspaper ad can. They're less confident about what they're getting online."
 
To add insult to injury, online newspapers face these challenges in a fiercely competitive new medium. "Unlike the print business, in which newspaper publishers generally enjoy near-monopoly status, the online news world is littered with entrants - from giants like MSNBC.com and AOL.com, to news aggregators like drudgereport.com, to blogs by the millions," writes Paul Farhi of AJR. "This makes it tough for any online ad seller to do what newspaper publishers have done for years - keep raising their ad rates." "Ultimately, it comes down to supply and demand," said Leon Levitt, vice president of digital media for Cox Newspapers. "And there's an awful lot of supply out there."

In the midst of this, the online ad growth is beginning to slow. The confidence-building, double-digit increases are fading fast. In the first quarter of 2007, the newspaper industry saw a 22 percent gain in online revenue - impressive, but less so when seen as the smallest uptick (in percentage terms) since the NAA started keeping records in 2003. In the second quarter, the industry rate slipped yet again, to 19 percent.

And even with these double-digit increases, newspapers' print ads still draw more than 20 times the revenue from online sales, having collected  $46.6 billion in print ads last year.

The New York Times Co., the leading online newspaper company, derives just 11 percent of its revenue from the Web, and it not public how much of that 11% comes from nytimes.com vs. its other digital holdings, such as the popular about.com.

The challenge news sites face now is how to continue to move online, but bring advertisers with them.

It's "in the interest of both newspapers and advertisers to shift content to the Internet," said Philip Meyer, author of The Vanishing Newspaper.

Advertisers can focus their target audiences and can monitor consumers' behavior online, Meyer points out. At the same time, "newspapers can at last grow their businesses without being held back by the variable costs of newsprint, ink and transportation...In the recent past, newspaper owners have preferred to cut fixed costs, like editorial staff, which gives a quick boost to the bottom line but weakens their hold on the audience. Using technology to cut the variable costs is a better strategy even though the payoff takes longer."

Sources: The American Journalism Review, The State of the News Media 2007, Publishing 2.0, The New York Times
 

The Washington Post won a record six Pulitzer prizes on April 7th, topping the paper's previous record of four Pulitzers in 2006.

The Post took home the public service medal honoring its expose on Walter Reed hospital, which revealed the negligent care of American war casualties.

"It's a reminder of what basic journalism can get you involved in," said Washington Post reporter Dana Priest, one of reporters on the Walter Reed story. "At a time when journalism is under this cloud of financial uncertainty, reporters have to stay focused, and if we don't, we sort of doom people like the Army specialist who lived with the cockroaches in Building 18. We can do better than that."

Other awards for the Post included the breaking-news award for its coverage of the Virginia Tech shootings, as well as a prize in national reporting for an examination of Vice President Dick Cheney's behind the scenes influence.

The New York Times received two Pulitzers, recognizing the paper's investigative reporting about toxins in medicine and consumer products from China, and for explanatory reporting on an article targeting the ethical dilemmas of DNA testing.

Others in the winner's circle included The Chicago Tribune, The Milwaukee Journal Sentinel, The Boston Globe, and Investor's Business Daily, Reuters, and The Concord Monitor.  

No prize was awarded for editorial writing this year.

Go here for a complete list of winners.

Source: Associated Press

As print newspaper revenues continue to fall, Bill Richards of Crosscut, suggests that papers look to devices such as Amazon’s Kindle, which use E ink technology.

When he started in 1994, David Dunkley Gyimah was one of the first video journalists in the UK. An academic lecturer and avid videojournalist who has advised newsrooms internationally, he explains how ‘any old’ newspaper can put up a regular video feed within weeks. Even better: newspapers have the assets to potentially produce better videojournalism (VJ) than their TV counterparts, both in terms of internal organization and marketwise.

Ten years ago, the Associated Press (AP) was a “collection of different companies.” The online and print teams were independent units, its video team was largely set apart in London, and its international branches all had different logos and cultures. Since then, AP has moved to become a fully digital multimedia platform, following the “one name, one logo, one story” precept. The Editors Weblog interviewed Tom Kent, AP’s deputy managing editor, who insisted on the importance of cultural change and communication for smooth newsroom integration. More than that though, Kent details the strategies put into place, explains the changes in the editorial process, and gives a preview of the future of the integrated newsroom.

Challenges for old media in the digital age – what Reuters has to say.

USAToday.com is about to unveil its revamped version, starting this week-end. Upgrades will focus on building a community and developing a ‘network journalism’ concept, through increased interactivity, the use of personal profiles and more. This might be the next step for newspaper websites.

One of this year’s major trends in newsrooms was the generalized evolution of the newsroom itself, into what was dubbed ‘integrated newsrooms’. Gannett came up with its own innovative version though, the Local Information Center (IC). The Editors Weblog interviewed one of the main engines of this venture, Jennifer Carroll, Vice President of New Media Content at Gannett Corporation.

The big newsroom story of 2006 was the transformation at The Telegraph in the UK – the layout, the building and most importantly, attitude. There are a number of different ways to present news to an audience – popular means such as newspapers, radio and television – and now, more than ever, online. The Telegraph was looking for a way to improve their product whilst embracing audio and visual to greater effect. And so, The Telegraph integrated newsroom was born.

Web-first policies have come under scrutiny for the balance between getting a story published quickly and getting the right, fact-checked, edited story published. Newspapers often struggle through this delicate balance when deciding what goes on-line when. That’s to say nothing of the sometimes not so invisible division between print and on-line departments. Neil Chase, Continuous News Editor at the New York Times, talks to the Editors Weblog about their continuous news-desk and why it’s a model that works not just for the on-line product but benefits the print product and journalists too.

 
Thanks to the Internet, anyone with a computer can put his or her ideas on a world platform.  This has created new citizen power never felt by individuals nor the communities in which they live.  For the first time, writers are truly paying attention to what citizens want to read, rejuvenating news in local communities who feel a lack of local coverage from traditional sources. Debbie Galant, a Montclair, New Jersey Local, saw a desire for news in her community that made her decide to try her hand at online reporting. Hoping to fill the local news void in their community Galant and co-founder Liz George started a local news site, Baristanet.com.

Friday 24^th of November, a good 80 Dutch and Flemish editors and researchers gathered in the European Journalism Centre, Maastricht, Netherlands, to assess and discuss several prototypes of novel newspaper products or services. All are web-based one way or another, and ready for the Web 2.0 publishing environments. The in total six demonstrators feature remote reporting tools, video content based on strategic alliances with non-journalistic partners, e-paper trials and online reader communities. Most were developed in close cooperation with specialised R&D centres. Together, the prototypes reveal the contours of the future electronic newspaper.
Al least half of the demonstrators will make it to real applications, the other are subject to further testing in living lab conditions.
General conclusion of the event: we need further experimentation to capture the essence of digital presence. In the conference report, the applications as well as the editors’ appraisal are described more in detail.

In less than two years, the number of video blogs (vlogs or video podcasts) has grown from just a handful to over 7,000, according to blogging directory Mefeedia.

The power of trust in the media and citizen journalism are among the topics to be discussed by top media names at a two-day forum in London next month hosted by the BBC and Reuters.

The 2006 We Media Global Forum will bring together opinion formers and leaders from media, business and technology to discuss and collaborate on how the media can foster