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Corporatization of the News Media


Profits v. Editorial Integrity: Can they coexist? ... Next Media: Jimmy Lai, largest shareholder. ... Need owner to set up foundation like Nelson Poynter. ... – PowerPoint PPT presentation

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Title: Corporatization of the News Media

Corporatization of the News Media
  • Profits v. Editorial Integrity
  • Can they coexist?
  • Critical Issues in Journalism and Global
    Communications, JMSC6002/March 2004
  • D. Weisenhaus

Profits v. Editorial Integrity
  • News is a business. It has always been so. --
    Taking Stock Journalism and the Publicly Traded
    Newspaper Company, 2001
  • The present newspaper business model is deeply
    flawed. --William Woo, Stanford University

General questions
  • Are there aspects of news production that should
    be off-limits to budget/company pressures?
  • What can news departments do to enhance their
    profitability? Should they even think about that?
  • What can editors and news directors do to protect
    integrity of reporting from business pressures?

  • Separation of business and news is only about a
    century old. In 1800, most common name for US
    paper was The Advertiser!
  • Purposes advertise commerce or promote partisan
  • Joseph Pulitzer Dont teach business side of
    journalism because it would corrupt journalists.

Newspaper trends...
  • As in Hong Kong, U.S. newspapers are privately
    owned and try to make profits
  • Not licensed by government
  • Do not receive government subsidies
  • Are protected by law
  • U.S., most newspapers are owned by shareholders,
    stock traded on Wall Street
  • Trend toward chain newspapers. Gannett is largest
    with more than 100.

Owners priorities v. readers values?
  • Owners Make money. Make propaganda? Promote own
    views, needs? Give social value? Have prestige?
  • Readers Want news. But what kind? About
    government? Entertainment (crime, sex cases)?
    Investigative or international (expensive to
    produce)? What else?

How profitable are newspapers? Until recently,
very profitable!
  • In U.S., newspaper profit margins are 2-3 times
    the average for manufacturing. 19-27 vs. 7-8.
    (2002 20)
  • Investment in news coverage down
  • Production expense down
  • Payroll down
  • Marketing up
  • Revenue/profit up

Hong Kong profits
  • Ming Pao HK18 million profit for 6-month period
    ending Sept. 2002, up from HK14 million loss for
    same period in 2001.
  • Looking for ways to increase productivity,
    management has circulated a set of objectives
  • Two Is Stories must be interesting and
  • Two Qs Reporters must produce quality and
  • Three threes Reporters must provide three news
    ideas a week, must produce three page leads and
    must contact three newsmakers.

More Hong Kong profits...
  • Next Media Net profit HK27million in 2001
    HK368 million in 2002. Why? 12 cut in staff,
    paper prices down 30 and closing of rival
    Eastweek! For 2003? Expected losses due to Taiwan
    Apple Daily
  • Oriental Press Group HK340 million net profits
    for 2002.
  • SCMP HK102 million net profits, 2002
  • Global China (Sing Tao, Standard) 152 million
    net profits, 2002

What about Hong Kong?
  • The HK media market scene
  • 14 daily Chinese language newspapers
  • 2 English-language dailies
  • 3 radio companies (10 channels)
  • 4 free-to-air terrestrial channels, TVB market
  • several pay cable companies

HK Newspaper Market
  • HK newspapers are dominated by Oriental Press
    Group and Next Media, which control 70 of
    newspaper readership
  • 1. Oriental Daily News (OPG) 35
  • 2. Apple Daily (Next) 25
  • 3. The Sun (OPG) 10
  • 4. Ming Pao, SCMP, Sing Tao (10-12)

HK ownership at a glance...
  • OPG Founded 1969 by Ma brothers. Became HKs
    best-selling paper in less than 10 years. Largest
    shareholder is wife of younger brother who fled
    to Taiwan after 77 drug charges. Ma Ching-fat
    current chairman.
  • Next Media Jimmy Lai, largest shareholder. Made
    in Giordano chain, founded company in 1990,
    Apple Daily in95, Taiwan Next Mag in 2001,
    Taiwan Apple Daily in 2003.

...More HK ownership
  • Ming Pao Enterprise Founded 59 by novelist
    Louis Cha. Largest shareholder Tiong Hiew-king,
    Malaysian timber baron, worth 1.4 billion. In
    2001 buys 50 of Yazhou Zhoukan
  • SCMP Holdings Largest shareholder, Kerry Group,
    Robert Kuok, 80, ethnic Chinese businessman in
    Malaysia (net worth US5 billion, made in sugar
    trade.) Kuok has interests in hotels (Shangri-La
    Grp), shipping, plantations, commodities in 15
    countries. Sons Ean, 47, (SCMPH chm) and Beau,
    51, help run company

More HK ownership
  • Global China Group Holdings (Sing Tao daily HK,
    Aust., NZ, UK, US, Can./The Standard/hotels/real
  • Sing Tao founded 1938 by Aw Boon-haw (Tiger
    Balm), left business to daughter Sally in 54.
    Sold in 99 to Lazard Asia Fund. In 2001, sold
    51.4 to Charles Ho, tobacco tycoon.
  • Hos vision become a multimedia corporation
    serving global Chinese communities. Plans to
    expand in Africa and Europe

More HK ownership
  • Tom Group ( Went public 2000. Part of
    Hutchison Whampoa and Cheung Kong Group real
    estate, retailing, telecomm, shipping.
  • By 2002, purchased 60 of Taiwans consumer
    magazine market. 50 of Yazhou Zhoukan. Largest
    outdoor advertising firm in China.
  • Wants to build cross-media, cross-strait platform
    -- one-stop shop to offer ad space, website
    content, TV, magazines, papers and be largest
    producer of Chinese-language TV programming.
  • The only question is whether we will become the
    largest Chinese media group or the largest
    Chinese media group that is ultimately part of an
    even greater media group. Sing Wang, CE.

Grand contradiction
  • Media is commercially based or market driven
  • Media in free society has crucial public
    function promote ideas and inform
  • Protected by law

What is (was?) the business of news?
  • The business of news is news. Growth of newspaper
    industry driven by publics appetite for
    news...News was product around which business was
    shaped. News was long been selected, presented
    and packaged in appealing -- and profitable --
    ways. (comics, sensational headlines, extra
    editions, penny papers, news graphics)

  • The business of news is business, not newsNews
    is shaped by audience rather than audience shaped
    by the news.
  • Business of news is no longer providing broad
    public information to mass audience but providing
    specialized information to smaller and more
    profitable audiences.
  • --Taking Stock

  • Six firms dominate American mass media. Each is a
    subsidiary of a larger parent firm, some
    operating in other industries.
  • AOL/Time Warner, General Electric, Viacom,
    Disney, Bertelsmann, News Corp.
  • Trouble AOL/Time Warner 100 million global
    subscribers, 75 million cable homes, 30
    magazines. US98.2 billion loss in 2002! Called
    off merger between CNN and ABC. AOL lost 170,000
    subscribers in last 3 months of 2002. Took AOL
    off name.

Related Globalization Debate
  • 1970s, attacks on Western traditional methods of
    collecting and distributing international
    news/popular entertainment. Led to a call for New
    World Info Order, a vague but radical reordering
    of international comm. systems
  • Disputes into late 1980sin part political/
    ideological related to East/West Cold War
  • Fought in academia, UN, news media. With 1989
    collapse of Communist states in Europe, ended.
  • Charge that 80 of world's news flow comes from 4
    major Western services -- AP, UPI, Reuters, AFP.

Pro v. Cons of Big Business
  • Pro more resources, more distance between
    advertiser and editorial content, more power.
    Less involvement by owners. E.g., Jimmy Lai/Next
    and Charles Ho/Sing Tao
  • Con more resources to protect, less concern over
    editorial integrity, no accountability to
    community, less choice of content.
  • Any more arguments?

Whats the alternative?
  • Jack Fuller Need for financial independence. If
    social purpose is to provide information people
    need to make political choices, they must be
    independent of government and other interests.
  • To be independent, must be financially strong.
    The first duty of a free press is to make

How to rectify?
  • Civic journalism? Booster vs. watchdog?
  • Antitrust laws?
  • New business models?

New Business Models
  • Nonprofits to own newspapers. St. Petersburg
    Times owned by Poynter Institute. Problem Hard
    to start. Need owner to set up foundation like
    Nelson Poynter.
  • Green newspapers Investors willing to accept a
    lower rate of return on stocks in socially
    responsible corporations.
  • Tax breaks for investing in newspapers.

Worldwide, Regional Media Trends
  • Trend 1 Concentration of corporate control
    through acquisitions (Global China buys Eastweek, YZ)
  • Trend 2 Non-media international and regional
    conglomerates emerging as major players. (Li
  • Trend 3 The China Factor. Growing integration
    with PRC in ownership, market, production. Global
    Chinas joint venture media distribution with
    Peoples Daily. Standard revamped as business
    paper oriented to cover mainland business. buys controlling stake in CETV w/landing
    rights in Guangdong

More Media Trends.
  • Trend 4 Media battlefield is regional and
  • --Hong Kong is media capital of Chinese
    diaspora around world Sing Tao, TVB, YZ.
  • --Tiong Hiew-King In addition to Ming Pao,
    controls largest circulation Chinese paper in
    Malaysia, launched The National in Papua New
    Guinea, Chinese paper in Cambodia.
  • --Next Media HK, Taiwan
  • Trend 5 Media owners expand through alliances
    and networking.

The State of the U.S. News Media 2004,
  • Some trends
  • Growing of news outlets chasing shrinking
    audiences, thus push for revenues
  • Most new investment is in disseminating news, not
    collecting it.
  • More news are raw elements as end product
  • Journalistic standards vary inside single news
    organization (MSNBC, NBC, web)
  • Little investment in building new audiences, more
    just focusing on costs
  • Convergence not as threatening, not replacing old

U.S. Newspapers
  • Newspaper circulation down 11 since 1990
  • Ad revenues up 60, profits up 207, jobs
    increased 3
  • People who believe what they read in newspapers
    80 1985 v. 59 2003

U.S. Online
  • Real growth. More than 55 of internet users
    18-34 obtain news online
  • Not clear its cannibalizing old media. 72 say
    they spend same time reading papers, but watch
    less TV.
  • Media giants dominate Internet journalism with
    69 of 20 most popular news sites owned by one of
    20 biggest media companies
  • Internet journalism still mostly material from
    old media. Only 30 of lead stories original

U.S. TV (Network and Cable)
  • Network news
  • 44 decline in ratings since 1980, but 29 million
    still watch
  • ABC, CBS, NBC 500 million revenues in 2003.
  • Cutbacks in on-air correspondents by more than a
    third since 1985.
  • Cable news
  • 62 unedited news first draft, most repetition
  • Narrow range of topics government, war, crime,
    disasters, lifestyle/celebrities
  • Audience stable since 2001 at 2.4 million in
    prime time
  • CNN earned 351 million in 2003, Fox 96 million,
    MSNBC 3.1 million

Who Journalists Work For
  • Owner/corporation must be committed to citizens
  • Hire business managers who also put citizens
  • Set and communicate clear standards
  • Journalists have final say over news
  • Communicate clear standards to public

Go back to Core Values?
  • Integrity, fairness, accuracy, full disclosure,
    sound news judgments
  • 1) obligation to the truth
  • 2) serve public interest first
  • 3) monitor powerful/offer voice
  • 4) provide forum for comment, criticism
  • 5) maintain independence
  • 6) make news engaging, relevant
  • 7) keep news comprehensive, proportional
  • 8) remain true to personal conscience