Monday, January 23, 2006

Can we save newspapers?

Last November a Washington Post piece by Frank Ahrens made the following point about the newspaper industry as it is currently structured: "To the list of challenges faced by newspapers--declining circulation, rising newsprint costs and increased competition from more up-to-the-minute media--add another: rising pressure from investors to make more money and reverse sliding stock prices."

Ahrens was talking about the latest woes afflicting the troubled Knight Ridder group, owner of the Philadelphia Inquirer, the San Jose Mercury News, and the Miami Herald.

Now Douglas McCollam follows up on this issue in a piece in the January/February edition of Columbia Journalism Review ("A Way Out?"). McCollam again recounts the sorry situation newspaper most newsapaper companies find themeselves in--of sustaining profit margins (around 20%) that would be fantastic in almost any other industry, but which are deemed sub-par by the shareholders who expect even higher profits from their media holdings. The impact of this on the newspapers themselves--and on our notion of a healthy Fourth Estate press functioning in a vibrant democracy--should be of great concern to all.

The November Washington Post article also outlined the scale of the problem. To review:
    Knight Ridder is vulnerable to a sell-off because its stock price has steadily declined, and the same holds true for other major media companies that own newspapers. Gannett Co.'s stock is down 21 percent over the past year, The Washington Post Co.'s is down 19 percent and the New York Times Co.'s is down 30 percent--opening the door to shareholder dissent.

(I had previously noted in a mediaville blog post the particular problems suffered by Tribune Media--owner of the Los Angeles Times and Chicago Tribune--which "recently secured a profit margin of 'only' 17.5 per cent -- high by almost any other industry's measures, but low for the obscenely profitable mainstream media").

CJR's McCollam points out that, by the end of 2005, Tribune's stock was down 29 percent. And the rest of McCollam's figures are even more depressing than those provided by Ahrens. This, then, is a serious problem. But McCollam gives us an insight into just how serious the problem is, pointing out that "In an effort to arrest the slide and appease shareholders, virtually every major newspaper in the country got busy slashing editorial positions and aggressively cutting costs." He goes on:
    In response [to shareholder pressure], many newspapers are desperately trying to convince the market that they, too, are sexy, hi-tech companies. To please the market, companies like Knight Ridder have done almost everything their large shareholders have asked — slashing staff, making stories more “reader friendly,” searching for Internet strategies that might magically transform newspapers from dead-wood deadbeats into new-media darlings. To date, none of it has worked.

So what's the answer? Are newspapers--and the huge reservoir of journalistic expertise and professionalism (yes, really!) they provide--headed for the chopping block in a vain attempt to be "sexy"? Can they be saved before they're destroyed in the race for ever-higher profits? Well, yes they can, argues McCollam: By being taken back into private ownership (i.e., by ceasing to be publically traded companies on the stock exchange).

Ahrens also brought this up in his November Washington Post piece when he pointed out that "Some within the industry think newspapers are better suited to private rather than public ownership," he notes. "Private companies attempt to minimize earnings, which are taxable, and maximize cash flow, which can be used to pay down debts. Public companies, however, are pressured to maximize earnings to appease shareholders." McCollam elaborates on this point in his piece:
    What newspapers really need, above all else, is ownership that values journalism and understands that the work of gathering, writing, and publishing the news is an inherently inefficient business that is in a period of profound transition. The private press baron of the past might have been a blowhard propagandist with the ethics of a wharf rat, but at least he loved the trade. Compared with the lineup of bloodless managers and mandarins currently squeezing the life out of journalism, Charles Foster Kane looks pretty damn good. So while there is no guarantee that the private ownership of today would recognize the value of journalism, it has already been established that Wall Street does not. Maybe it’s time we took our chances.

McCollam writes a well-considered piece that points out the potential pitfalls as well as the potential benefits of privates ownership. But he makes a convincing argument that the private route is better for newspapers--which are qualitatively different from entertainment companies--and ultimately better for a thriving democracy.

Monday, January 09, 2006

Two views on the coming digital TV transfer

Here are two recent examples of where the press is getting it right and getting it wrong in covering the pending transfer from analog to digital television--now scheduled for Feb. 17, 2009 (the date that federal lawmakers have set for "the last broadcast of conventional television.") In other words (notes the LA Times) that's the date "when analog TV signals will be turned off in favor of digital broadcasts, which offer improved pictures and more programming choices". (See here for a wikipedia backgrounder.)

The LA Times gets it (more or less) right. The Tribune-owned paper has been getting hammered by its parent company of late (see this current Coumbia Journalism Review article to understand why), but it's still able to come up with some useful and insightful editorial comments from time to time. A Times editorial from just before Christmas focuses on the downside of the Feb. 2009 deadline for the transition, especially for poor people. It reminds readers--most of whom who probably still haven't completely grasped this--"that tuning in the new signals requires either a digital TV, which the vast majority of homes don't have, or a converter box (possibly from a cable or satellite TV service) to translate the digital broadcasts into analog pictures." What's more, "with an estimated 73 million TVs in more than 30 million homes tuning in analog signals through antennas today, a lot of viewers are likely to be caught unprepared when those signals vanish."

But the Times holds that, although Congress has enacted legislation granting vouchers to help with the purchase of set-top converters, lawmakers are generally less concerned with helping poorer, unprepared citizens than with raking in the $10 billion to $30 billion of revenue that the auction of the analog spectrum could provide the U.S. Treasury. The editorial goes on:
    Washington should not let the quest for revenue override a more fundamental goal: If the high bidders in the auctions are affiliated with the local telephone and cable companies that already offer high-speed Internet service, they're not likely to use the airwaves for a cheaper version of broadband. Similarly, the high bidders might be more interested in offering movies to cellphones than a fat pipe to the Web. That's why Washington should leave some of the reclaimed frequencies open to the public without need for lease or license. With the right technologies and rules to guard against interference, these airwaves could not only enable community-based high-speed Internet services, but provide a laboratory for wireless innovation. By opening a few slivers of the spectrum to unlicensed wireless data services in 1986, the FCC made possible an explosion in Wi-Fi, or wireless fidelity, communication gear and services that continues to this day. The reclaimed analog TV frequencies hold even more promise. Rather than mining every bit for auction revenue, lawmakers should reserve some of the airwaves for whatever services and applications that innovative technologists and community groups can squeeze into them.

While the LA Times editorial staff makes some sensible points on the digital handover a Wall Street Journal goes off on a tangent, missing the point (at least in this case), by choosing to carp about government handouts to the poor. The WSJ piece (which requires a subscription, so you can't read the original unless you pay), points out that
    In the best government giveaway since cheese handouts from the Reagan Administration, Congress has voted to provide consumers $40 vouchers to buy digital-to-analog converter boxes. Essentially, Congress is budgeting $1.5 billion for millions of Americans who don't need the money -- so that they can keep using obsolete technology. Moreover, most people won't notice a change in 2009. They will already have digital TVs (all new sets sold after mid-2007 must be digital), or they will still be subscribing to cable or satellite services that can send digital signals even to analog TVs. One universally acknowledged truth -- even in Congress -- is that the people who gobble up many of those vouchers will not be needy. Millions of households with satellite dishes and new big-screen TVs also have at least one old analog set lying around, and each family is entitled to two $40 vouchers. As we learned when many of the non-poor joined long queues for Reagan cheese, Americans would stand in line for marmoset pelts if they were labeled "free." To encourage such grabbiness in 2009, Congress has earmarked $5 million for voucher advertising. Mark your calendars.

These comments stir up echoes of Reagan-era "welfare queen" mythmaking, and they provide some pretty strong evidence of where the Wall Street Journal editorial board's sympathies--or lack thereof--lie.

Wednesday, January 04, 2006

The Korean Cloning Scandal: A Win for Science

As usual, lies, deceptions and frauds were a part of American news in 2005. We are forever plagued with those willing to abuse the trust of others for personal and political gain. However, science is a pursuit that grows stronger as individuals engage in errors and deceptions.

In politics, sports, business, journalism and most other fields, deception is detrimental to the entire endeavor because the average person “knows” those who get caught represent only a portion of the guilty. January 4 newspapers reported Jack Abramoff’s role in a new political scandal. The public looks at what has been revealed and infers that there is more to this iceberg beneath the surface. (Tom DeLay probably regrets calling Abramoff “one of my closest and dearest friends.”) Jose Canseco’s steroid admissions caused doubters to look more closely at Rafael Palmeiro, Barry Bonds and others. Public cynicism was confirmed when Palmeiro tested positive for steroids and Bonds admitted “inadvertent” steroid use. Enron, Global Crossing, Adelphia, and Tyco only convince us that there is much more undetected deceit in the business sector. Judith Miller’s faulty reporting on Iraqi WMDs and Jayson Blair’s plagiarism and deception impacted the New York Times and journalism. Regarding journalists, even Bill O’Reilly, a leading contender for “Most Irrational Public Figure,” said December 29, “Any kind of irrationality on the part of the American media impedes the honest flow of information and causes damage to our system of checks and balances.” (Most Irrational Public Figure is not a real award—but it should be.)

Fraud occurred in 2005 in the scientific community as well. In May an article in Science described breakthrough research in human cloning and cloned human stem cell lines. December 15th one of the co-authors admitted that evidence for the article had been faked. One day later, Hwang Woo-suk, the lead author, requested retraction of the paper. It remains to be seen whether this current episode will take a place with Cold Fusion, Piltdown Man, the Baltimore Affair and Lysenkoism among discreditted ideas in science.

Cheating in banking, business, politics or law are failures of the safeguards in the system and commonly seen as indicators of further corruption. Catching frauds that slip through the system is a win for science because no fraud of major scientific ideas can hope to go undetected. Science is a process of asking questions and questioning proposed answers. As surely as an interesting finding is announced, others will seek to confirm it and the one making the claim better have the proof. (It is important to note that there is a difference between fraudulent ideas in science and fraudulent academic and ethical practices. There is a disquieting body of evidence of scientists claiming credit for work that is not rightfully theirs and other unethical behaviors. See the excellent work by Horace Judson, The Great Betrayal: Fraud in Science.)

Skepticism is a key element of science, but skepticism is not researchers looking critically at their own work. It is the critical analysis of one researcher’s work by others. Scientists may be biased, sometimes fooled and even dishonest, but Science is unrelentingly skeptical and will root out false notions in the long run. Thomas Hobbes described the distinction between fallible humans and the skeptical safeguards of science. Even the scientists who know they commit fraud do not want others to get away with fraud because even the cheaters have a stake in the perception of the system as honest.

The Korean cloning scandal is a win for science, because it shows that cheating on the Big Ideas of science will be caught. It is the nature of science that any major idea will be tested again and again. Breakthroughs in science always become the basis of future research. When additional scientists try to build on fraudulent ideas, the new research will fail and that will lead back to the prior cheating. Individual scientists may have a motivation to cheat, but all of the others have a stake in catching cheaters.