The Implications of GE Selling NBC to Comcast
Monday, 21 December 2009
As we contemplate the end of one decade and the beginning of another, all of us in the media are wondering what went so wrong, meaning the devastation that has hit many news organizations. That's particularly true in my sectors of interest, business and international. And we also are wondering, Can the phoenix rise from these ashes?
I think one of the most important things that went wrong during my nearly 40-year career was the takeover of so many media outlets by non-news corporations interested primarily in maximizing their profit margins. As a young reporter, I can recall working at the Louisville Courier-Journal and Times, owned by the Bingham family. They saw their media assets as a commercial enterprise, to be sure, but something much more. It was part of their commitment to a vibrant civic society and ultimately to the American democracy.
But over the years, so many media assets were purchased by Gannett, Disney, General Electric, Viacom, and others. These players were attracted by the possibility of 18 or 20 percent rate of returns. Their mantra became, "Repurpose the content. Create multimedia conglomerates. Then cash in."
It didn't work. These owners have stripped the media of much of their talent and led them down a vicious spiral. If there's nothing worth reading in a newspaper, or watching on a local television station, then people stop reading and watching. Owners with an exclusive interest in rate of return never understood the simple equation--people have to have a reason to buy a magazine or newspaper, or listen or watch.
So now General Electric is trying to unload NBC to Comcast. Comcast is not an exactly enlightened group of individuals but at least they are in the "content business." One possible interpretation is that GE has concluded it cannot get the high rate of return on media assets that it once assumed it could.
Will more profit-only owners come to that conclusion? Could we begin to see a transformation of pattern of ownership? That's what we have to watch for. Who might own the media that emerges from the destruction? It appears to be a combination of players:
--in the business space, McKinsey and Booz and INSEAD and other consulting/academic organizations are creating very fine editorial products, helping fill the vacuum left by the endless round of cutbacks at Forbes, Fortune and Business Week.
--we see also the rise of non-profits, as in the role played by the MacArthur Foundation in helping former Chicago Tribune editor Jim O'Shea create a news organization in Chicago that will be affiliated with the New York Times. Charitable giving also helped Paul Steiger create his investigative organization, Pro Publica.
--news cooperatives might spring up. The emergence of Global Post in Boston is interesting in that light. This online organization pays very little money to journalists around the world, but at least it pays them something. This could be the future model of being a foreign correspondent. Most traditional news organizations have completely given up on paying the full packages for correspondents and their families. Maybe a new model is being born.
--some online organizations like Huffington Post or the Daily Beast could emerge as profitable, sustainable models of coverage in general and that would include some international content.
These are all straws in the wind, but worth contemplating as we stare into 2010.
I've finally finished "Journalism's Roving Eye" by John Maxwell Hamilton, who spoke to the OPC and whose remarks triggered comments from Richard Pyle.
Overall, it is an impressive piece of research, but most of it misses the core issue today--with the field of foreign correspondence in such complete retreat, how can Americans know what is happening in the world, as it affects them directly? There is a huge gap, and we know from history that this is dangerous. Think of World War II.
But in his conclusion, Hamilton strikes at the heart of the matter, at long last. "It has become clear that professional journalists committed to foreign news will have to think beyond the for-profit model for news." That obviously jives with the thinking I expressed above.
He notes that NPR gets funding from charitable foundations, like that of Joan Kroc, widow of the founder of McDonald's. The Center for Public Integrity, Foreign Affairs, National Geographic and Harper's all are supported by non-profits. Public Broadcasting is another.
"For such efforts to be successful, donors will have to jettison a common assumption that funding should be temporary and that ventures can be self-supporting," he writes. ""Like parks, soup kitchens, local opera, and educational institutions (which is precisely what high-quality news media are) foreign news rarely pays for itself."
Hi Bill -- not an easy task to finish the book, it's encyclopedic in scale. Thanks for sharing your views on it, I hope to chip away at it in the coming months. You should blog something for the rest of us who haven't taken the time to read the whole enchilada.