What the News Corp Scandal Tells Us

Given all the ink or pixels devoted to covering the scandal at the 168-year-old News of the World and parent company, News Corp., I'd have to say that the scandal has become one of the summers top two biggest stories.

The other, in case you've been able to forget, is the political machinations around the debt ceiling.

From a practical matter, it seems that executives other than the editors had to have been aware of some of the money being paid out to British police officers. After all, someone had to prepare the checks or withdraw the cash while someone had to approve the payments. And those payments came out of someone's budget. (Knowing how budget meetings go, I would have liked to have been in the room when those budget items had to be justified.)

But what's interesting about the scandal isn't the scandal itself.

It's that I've yet to see much noise/buzz/commentary on what the scandal says about journalistic integrity and standards. 

Most news organizations today are focused on covering breaking news -- which is not always the same as breaking the news itself. For example, lots of local TV news stations boast about covering breaking news by which they mean local crimes, water main breaks, storms hitting the area, etc. They rarely talk about their role in uncovering the news.  (In terms of local TV news, perhaps that's because a lot of their news -- like the water main breaks -- impact entire communities and are rarely "Exclusives.")

So in a culture of covering breaking news, getting the news out first is a priority.

News of the World, however, had a culture that also prized the ability to uncover news, to generate exclusives -- and that may have helped it become England's largest Sunday paper by circulation.

But the end result, as we know all know, is a culture that led to breaking the law. Even before laws were broken, the News of the World's culture led its reporters, with the knowledge and approval of its editors, to push beyond the limits of journalistic integrity. 

More than ever, because of the scandal, the media must also look at what "integrity" means. Exclusives can be important, but journalists and bloggers need to define what steps they will and won't take. Will they pay money to get access to a noteworthy source for an interview? If they pay money to  that source, how will they disclose that fact? (And how will they vet that the source is factual?)  What criteria will they use to determine whether they use confidential source (those quoted without direct attribution)? The New York Times has a criteria it published online but a lot of other news organizations have not made clear the criteria they use.

The media should also ask itself about where the limits should be -- where that line is -- and what steps they'll take to prevent reporters, editors, bloggers, etc. from crossing that line.

It's not only journalists who should be asking and answering these questions. It's also the consumers of newspapers, magazines and social media, who are important because they make the decisions about issues and subscriptions to buy.

What's interesting is that more than ever, journalists, publicists and social media practitioners are in some ways more tied together than ever. Or perhaps it's that journalists and publicists are in the same boat and are re-arranging the deck furniture.

Either way, we all must work on an evolving definition of what's news and how to communicate news, opinion and press releases.  For bloggers and reporters alike, that includes disclosing potential conflicts of interest. For PR functions, when you work with bloggers and other social media influencers, it's important to make sure they disclose any conflict of interests.

Interestingly, the Journal's Bret Stephens wrote an interesting column today (after I wrote the original version of this blog article last night) that discusses journalistic integrity by comparing WIkiLeaks to News of the World  as a way to compare news in the public interest (such as uncovering government corruption) and news "merely of interest to the public," which Stephens defines as "just so much tittle-tattle about essentially private lives." I don't necessarily agree with Stephens' conclusions, but I think it's a discussion worth having.

What should "journalistic integrity" is now an open question, one that we must address in the wake of the phone hacking scandal.

News Corp. Validates "The Year of Online Subscriptions" Predictions

In acquiring an electronic reading platform called Skiff and in making an investment in Journalism Online, a company co-founded by Steven Brill, that develops pay models for newspapers and magazines, News Corp. has validated our prediction that 2010 is the year of online subscriptions.

Rupert Murdoch is literally putting his money where his mouth is. It's going to push others to take Journalism Online more seriously. And expect that by 2012, we will be paying access to a lot more online news content.

Check out the prediction, Prediction #3: 2010 will be the year of online subscriptions.

Murdoch to Build Paywall Around the London Times -- Will Others Follow?

A fierce proponent that newspapers need to charge for content, even if available online, Rupert Murdoch is putting your money where his mouth is. News Corp. papers, the Times of London and the Sunday Times will establish a paywall and start charging online readers as of June 2010.

The planned fees are not significant --£1 for one day's access or £2 for one week's access for those who don't subscribe to the print edition. (Print subscribers will get free online access.)

What is significant, is that, as AdAge noted in an article, "New Test for Paid Content as Competing News Sites Remain Free,"competitors to the Times of London "such as The Guardian, The Daily Mail and The Daily Mirror remain free for all comers." (It's interesting to note that AdAge offers a hybrid approach, with some free articles and some available behind a paywall.)

So will readers pay for online access to the Times of London, when they are not used to paying for content? Will they merely shift to competing online sites? Or will those sites start charging online readers for access?

There are some who think Murdoch is making a bad decision. Well, not just a bad decision. TechCrunch sees it as evidence of The Madness of King Rupert.

My guess: That more paywalls are inevitable because newspapers need the revenue stream, and can't afford to give away content. We're a long way from the dot-com era, when sticky eyeballs were everything. They're still important, but now publishers need those eyeballs to contribute more than just boosting ad rates.

At the very least, this latest move continues to validate our prediction in calling 2010 the year of the online subscription.

New York Times Unveils More Details on the Journal's new NYC Metro Section (Which Competes with the NYT)

Interestingly, reports about the Wall St. Journal's new daily New York City metro section, which starts April 12 and is expected to average 12 pages, came not from the Journal but from the New York Times -- with whom the Journal is directly competing in a newspaper war.

Check out the Times article, "Journal vs. Times in Newspaper Battle Over New York Readers – And Advertisers" by blog fav Richard Perez-Pena. The article positions the Journal's new metro section as the latest front in a newspaper war (the advantage: reporters are already embedded). But beyond the scope of a NYT-WSJ war, Perez-Pena notes that the Journal's new section could also impact the New York Post, another News Corp. properties and one already serving NYC -- though not the upscale readers and advertisers.

Here are some key facts about the upcoming section:

• The Journal is investing $15 million in the new section.
• It will have a staff of 35 people (out of a staff of 750).
• Most of the reporters will be reassigned from other sections.
  
• The Journal plans to invest another $15 million in another attack on the Times, aimed at attracting women readers and more home subscribers (more attractive to advertisers).
• The new section will cover daily real estate news, cutlure, business, sports and some metro/government news.
  

As readers of this blog may remember, the Times and Journal have competed over the past year to shed light on how the recession impacted the super-rich.

Check out Perez-Pena's article for more details and insight.

In a Web 2.0 World, It's Important to Define "Credibility"

I've been thinking a lot about credibility lately. Rupert Murdoch makes the point in a recent Wall St. Journal op-ed that there's more competition than ever for people interested in news -- and that's a good thing for consumers.

I don't necessarily agree with more competition is good when it comes to journalism. (That said, I don't think it's good when there's only one source for news, either.)

In his article, "Journalism and Freedom: Government assistance is a greater threat to the press than any new technology,"Murdoch says, "Media companies need to give people the news they want." And that seems to explain Fox News and most of News Corp. properties.

That doesn't always translate into accuracy.

Which leads me back to credibility.

I'm concerned that there are a lot of sites available now that post articles that provide some take on the news, many of them catering to a particular audience's belief systems. And that they don't provide objective perspectives, just self-reinforcing content.

The Boston Globe's Ellen Goodman recently wrote about the topic, "Facts and figures, myths and mantras." Interestingly, the response to her column was a mixed bag of polarized thought, some blaming MSM. (Hint: most times when you hear someone refer to "mainstream media" or especially as MSM, that person will tend to be a conservative and they will have been criticizing the media. You can out the responses to Goodman's column here: May fact-checkers not just endure but prevail.)

So the question becomes: what's credible? How can sites ensure they provide credible news and opinion? And what can organizations do to ensure that their social media programs are credible and engage their constituencies?

CNN launched a new ad campaign that features three CNN anchors with the words "Truth," "Facts" and "News" followed by an ad that says "First."

The problem is that truth, facts and news can be subjective. Facts can be emphasized or de-emphasized to make a particular point.

For example, I'm reading "Perfect Pitch" by Jon Steel about winning new business, and he makes the point that facts alone aren't enough. Citing the criminal trial of OJ Simpson, Steel points out that the prosecution focused a lot of attention on the bloody glove that linked (in their opinion) Simpson to the double murder. Yet Johnnie Cochran said if the glove "does not fit, you must acquit."

News organizations take facts and weave a narrative around them to make sense of the facts. To provide context. That's how you can have the New York Times and Wall St. Journal look at the same topic, reported similarly in their news pages, and take such different, opposing stances on their editorial pages.

That's not saying one paper is right and the other wrong. Just that interpretation of those facts is clearly important these days.

So how should we define what's credible? Is credibility in the eye of the beholder? Is it how the Supreme Court defined porn as you know it when you see it?

Organizations that seek to leverage social media will have to figure out how they can be credible, how they can engage their audiences, without turning them off.

The FTC has issued new rules that bloggers must comply with in terms of disclosing gifts or payments from companies. Will that ensure credibility?

People can now get paid for tweeting paid-for messages.

I think we've got to be very careful about being accurate and credible or else you'll turn off the very people you're trying to reach.

That's one of the challenges to leverage social media.

Tough News For Rupert Murdoch -- and implications for the sector

While some people are pointing to the smallest bit of positive news, the bad news for the newspaper industry continues.

Here's a quick round-up:

• The Tribune Co. is likely to be owned by its lenders, instead of real estate magnate Sam Zell, who bought the company two years ago. This potentially good news, but likely means more changes for the Chicago Tribune, LA Times and other media properties the company owns, including the possible sale e of those properties.
• Philadelphia Newspapers LLC, which owns the Philadelphia Inquirer and Philadelphia News, has filed plan to sell itself to a new group of local investors. This move, too, signals more changes for the two papers.

Ok, now for the tough news for Rupert Murdoch. He's taken a 40% pay cut for 2009, and saw his bonus drop 69%. If the smart folks at News Corp. thought the turn-around was here or near, I don't think they would have cut Rupe's compensation so drastically.

Of course, his take-home compensation was still $18 million, so need to hold a fundraiser for him. But last year, he took home $30.1 million. Even for the super-rich, that's a big difference.

Turning Distribution Into Revenue

The thing about journalism is this: reports of its death have been greatly exaggerated.

People continue to want news. They just don't necessarily want it in print form.

It's too slow. It's about what happened yesterday, after all.

It's not convenient. You can have it delivered to your home or office or pick it up from a newsstand -- but the printed newspaper isn't available on your smart phone, your iPod, etc.

It's too expensive.

What's interesting is that technology has transformed the first two complaints: you can now get real-time news updates and you can access it on your smart phone, on e-readers like Kindle, etc.

Technology has improved distribution of the news. But while it has brought some costs down significantly, technology still hasn't generated revenue streams to pay for the news.

Even providing an iPhone App hasn't solved the revenue question, as reported in the New York Times, "There’s an App for That. But a Revenue Stream?" Check out "For Murdoch, It’s Try, Try Again" by the Times' David Carr, which looks at ways Murdoch, the Times, Boston Globe and others are thinking about getting consumers to pay for news content.

As Murdoch told the Times, "Quality journalism is not cheap, and an industry that gives away its content is simply cannibalizing its ability to produce good reporting. The digital revolution has opened many new and inexpensive distribution channels but it has not made content free. We intend to charge for all our news Web sites.”

By doing so, Murdoch and others will establish a wall that will prevent search engines from finding the content, and reduce the number of people able to access that content. Then it will become more important for PR functions to use social media to raise awareness of the coverage about their client or organization.

Still, the first challenge is to get people to pay for general news. Check out a New York Times article from today about the Financial Times, "Financial Times Feels Vindicated by Web Strategy," which looks at how the FT's strategy of putting its content behind a pay wall has been paying off. Up next for the FT is a system of micropayments.

How Fox Plays Hardball -- Fox News Media Relations, that is

Fascinating story by David Carr about the challenges when Fox News is part of a reporter's new beat. Check out "When Fox News Is the Story."

The article lays out the aggressive, political-campaign-like tactics that Fox News deploys against reporters who it thinks has written negative articles about the channel. My favorite tidbit: According to Carr, despite repeated calls by Timesman Jacques Steinberg for a recent article, "the public relations people at Fox News did not return his requests for comment. (In a neat trick, while they were ignoring his calls, they e-mailed his boss asking why they had not heard from him.)"

The reason for playing hardball? According to the head of Fox News' Media Relations, Brian Lewis: “Yes, we are an aggressive department in a passive industry, and believe me, the executives and talent appreciate it,” Mr. Lewis said, adding that with the 24-hour news cycle and the proliferation of blogs, a new kind of engagement and activism was required."

The article is filled with anecdotes about how Fox News media relations operates. An interesting coda is that the online version of the article has a correction in it: Carr had referenced TV Guide as being owned by News Corp. when in fact News Corp completed its sale in May.