A long New York Times Magazine piece (5/16/10) about start-up online journalism outlets brings us some troubling news about the wall between editorial content and advertising:

One thing many of these new strategies have in common is a willingness to transgress time-honored barriers--for instance, by blurring the division between reporting and advertising. True/Slant offers to let advertisers use the same blogging tools that contributors do, to produce content that, while labeled, is blended into the rest of the site. Such marketing deals are central to the company’s plans for future revenue growth. "Everywhere I go, the whole notion of enabling marketers to create content on a news platform is well received," Lewis Dvorkin says. "It's the way the world is moving."

Not long ago, such an idea would have been considered heretical, and in many newsrooms, it still is. But clearly, attitudes are shifting. "Hopefully we're breaking down the silliness of how church and state was historically implemented," says Merrill Brown, a veteran media executive and investor who is currently building a network of local news sites. Once, most journalists took a posture of willful ignorance when it came to the economics of the industry: They never wanted to sully themselves by knowing the business. The recession has, through fear and necessity, made capitalists out of everyone.

For proof that catering to advertisers is not "heretical" in the rest of the media, and that journalism is the worse for these "shifting" attitudes, read FAIR's new Fear & Favor report in the May issue of Extra!

In a lengthy New Yorker piece (4/26/10) about the Amazon/Apple battle over e-books, Ken Auletta paints some familiar heroes and villains:

"The [publishing] industry's great hope was that the iPad would bring electronic books to the masses--and help make them profitable. E-books are booming.... But publishers were concerned that lower prices would decimate their profits." If Amazon gets away with selling e-books for $9.99, Auletta quotes one publishing CEO, "to my mind it's game over for this business." Amazon is depicted as controlling and mercenary:

Many publishers believe that Amazon looks upon books as just another commodity to sell as cheaply as possible, and that it sees publishers as dispensable.... Publishers maintain that digital companies don't understand the creative process of books. A major publisher said of Amazon: 'They don't know how authors think. It’s not in their DNA."

Publishers, on the other hand, are remarkably altruistic: "Publishers' real concern is that the low price of digital books will destroy bookstores, which are their primary customers," Auletta writes. But they're equally concerned about the well-being of authors:

Good publishers find and cultivate writers, some of whom do not initially have much commercial promise. They also give advances on royalties, without which most writers of nonfiction could not afford to research new books....  Although critics argue that traditional book publishing takes too much money from authors, in reality the profits earned by the relatively small percentage of authors whose books make money essentially go to subsidizing less commercially successful writers. The system is inefficient, but it supports a class of professional writers, which might not otherwise exist.

It's a good story--but it belongs in the fiction section: The idea that publishers need to break Amazon's $9.99 pricing structure in order to be profitable is self-serving spin. As the New York Times' Motoko Rich reported in a story that bent over backwards to give the publishers' side (FAIR Blog, 3/2/10), publishers make about as much from a $10 e-book as they do from a $26 hardcover: $3.51-$4.26 vs. $4.05, by Rich's estimates. The  higher prices that publishers claim are necessary to keep the industry alive will actually give profits a nice boost: to as much as $5.54 for a $12.99 e-book; Rich doesn't give figures for a $14.99 book, but much of that extra price would go to the publisher.

Although Auletta allows publishers to pat themselves on the back for their "author-oriented culture," they give themselves a much better deal than they give writers on e-book sales: While a traditional hardcover sale nets about the same amount of money for author and publisher,  with e-books the publisher takes almost twice as much in profits as they give out in royalties.

The publishers' goal is to get an e-price that gives them sharply higher profits per unit with far less investment--and isn't that every capitalist's dream?  It's a shame that Auletta feels the need to dress that up as some kind of salvation of literature, though.

This week on CounterSpin: The network camera crews have mostly packed up and gone home, but the political fights over reconstruction and rebuilding in Haiti are only just getting started. University of Texas professor Jemima Pierre was part of a delegation that recently visited Haiti, and she wrote about what she saw for the Nation. She'll join us to talk about what she found, and where the Haiti story is headed next.

Also on the show: Media technology can put more control in consumers' hands over the gathering and sharing of information and entertainment. But some folks, frankly, would rather it didn't. We'll talk with Megan Tady of the group Free Press about some of the most significant media industry battles going on right now that affect what you get to see and hear.

Push play button to stream this week's show:

Boy, the folks at Amazon.com sure are mean--to hear the New York Times tell it.

A March 18 story by Motoko Rich and Brad Stone begins:

Amazon.com has threatened to stop directly selling the books of some publishers online unless they agree to a detailed list of concessions regarding the sale of electronic books, according to two industry executives with direct knowledge the discussions.

It's very clear who's the villain in the story, tabbed on the website as "Amazon May Impede Access to Some Publishers' Books": The story talks about how the online bookseller is "pressuring publishers" with its "hardball approach," shortly after it was "widely accused of abusing its position" with similar tactics that "shocked the publishing world." If Amazon keeps it up, "it could harm its reputation in the eyes of customers and the publishing industry" and (in the words of a source) do "serious long-term damage to their own brand."

By implication, the hero would be Apple, which is also entering the electronic book market. Apple's business model, at any rate, doesn't get the harsh spin from the Times that Amazon receives.

Which is funny, because Apple's plan would result in consumers paying from 30 percent to 50 percent more to buy most e-books, and prevent publishers from allowing anyone else to undercut Apple's inflated prices. It's a terrible deal for consumers, whom you would think make up the majority of readers even in the Times' Business section--but the piece is written with the unstated assumption that we're all rooting for the publishers.

The word "profit" only comes up once in the article, in reference to the $9.99 Amazon wants to charge for titles for its e-book reader: "Many Kindle owners have said the low price motivates them to buy more e-books, but publishers feared that the price would eventually erode their profits."  But it was Rich, one of the article's co-authors, who did the reporting (3/1/10) that showed that the $9.99 price would give publishers about the same profit they make selling a hardcover for $26--and that the $12.99 price (let alone $14.99) gives them a significantly higher margin.

As FAIR pointed out at the time (FAIR Blog, 3/2/10),  however, Rich's earlier piece was likewise heavily spun so as to avoid giving readers the accurate impression that higher e-book prices are a rip-off for consumers. So it's not surprising that the same pro-publisher slant is found in her coverage today.

This week on CounterSpin: A new law in Utah says some women who miscarry should go to jail. You may have seen some coverage, but are journalists asking the right questions about the law's implications, and is there a bigger story here that's being missed? We'll hear from Lynn Paltrow, executive director of National Advocates for Pregnant Women.

Also on CounterSpin this week: With a name like the Campaign for a Commercial-Free Childhood, you'd expect such a group is going to upset some big corporations. And they have, including launching a very successful campaign against media giant Disney. Well, maybe a little too successful; the group found itself evicted from its headquarters after Disney complained. We'll talk to Dr. Susan Linn from the Campaign for a Commercial-Free Childhood about that story.

Click to play to listen:

James Ledbetter (Big Money, 2/20/10) points out that Mexican media mogul Carlos Slim, the third-richest person on the planet and one of the New York Times' biggest stockholders, is a central player in a remarkable New York-based legal story--one that the Times has so far ignored.

The story involves Slim's attempt to take over a loan that  JPMorgan Chase made to a subsidiary of Grupo Televisa, Slim's major business rival--a deal that would have required Televisa to reveal virtually all its financial secrets.  A U.S. federal judge in New York City held that JPMorgan was acting in "bad faith" and put a hold on the loan's transfer (Reuters.com, 2/18/10).

Writes Ledbetter:

This is a scandalous story, involving one of the world's largest banks, a powerful federal judge, and two Mexican telecom giants. Under any other circumstances, the business section of the Times would be expected to cover it, as the Journal and Bloomberg have. Yet as of Saturday midday, I cannot find a single mention of any aspect of this case, anywhere in the physical New York Times, or on its website--not even a blog post or a wire story. Perhaps as the lawsuit moves on, the Times will be compelled to cover it. But for the moment, it certainly appears that Carlos Slim's investment has bought the silence of one of the world's most important newspapers.

I suppose that the Times could argue that it just doesn't find judicial findings of financial wrongdoing against the biggest corporation based in New York City to be particularly newsworthy.

Washington Times, the paper of Rev. Sun Myung Moon's Unification Church, has announced it will be going to free distribution and laying off at least 40 percent of its staff. Which positions won't make the cut? Well, one that's been mentioned is that of editor.

That's right; former editor John Solomon resigned last month after less than a year at the Times, and the company's new president and publisher, Jonathan Slevin, told the Washington Post that "there is no search for a Solomon successor and that his job may not be filled under a reorganization." Who, exactly, will be in charge of news content in the absence of an editor is unclear.

Over at the Dallas Morning News, meanwhile, who will be in charge of news content was made painfully clear to several section editors on Wednesday: the sales department. In a memo to staff at the News and A.H. Belo's other papers, editor Bob Mong and senior vice president of sales Cyndy Carr told editors of departments ranging from sports and entertainment to health and education that they would be reporting to sales managers instead of the editor, as part of the paper's "bold new strategies" of "business/news integration."

As Robert Wilonsky of the Dallas Observer commented (Unfair Park, 12/3/09), "In short, those who sell ads for A.H. Belo's products will now dictate content within A.H. Belo's products, which is a radical departure from the way newspapers have been run since, oh, forever."

It's not entirely radical, given that the vaunted wall between the news and business ends of newspapers have been steadily eroding over the years. (See Extra!'s annual Fear & Favor reports.) But at a certain point, it seems like you have to stop calling yourself a news outlet and admit you're just an advertising supplement.

In their analysis of what ails the journalism business (CJR.org, 10/19/09), Leonard Downie, Jr., and Michael Schudson seem to pooh-pooh the idea that newspapers could be turned into non-profits funded by endowments, "as though they were museums."

"It would take an endowment of billions of dollars to produce enough investment income to run a single sizeable newspaper," Downie and Schudson write, "much less large numbers of papers in communities across the country."

But would it really? At another point in the article they note that the Baltimore Sun is down to 150 reporters--but it seems like you'd still have to call that a "sizeable newspaper," able to do a great deal of the "accountability journalism" that Downie and Schudson are rightly focused on...particularly since, based on the figures they give, the typical state capital only has seven full-time reporters. Let's say you can hire a reporter for $100,000; that would give you a journalistic payroll of $15 million.   To get that using the average rate of return for college and university endowments for 1998-2007, you would need a nest egg of about $174 million.   If you had an endowment of $2 billion and got that rate of return, you could hire more than 1,700 reporters--maybe that's what Downie and Schudson mean by "sizeable."

Is it possible for the public to amass that kind of funding to support journalism?  The same group that provided the college investment income figures, the National Association of College and University Business Officers, reports that a total of 785 academic institutions across North America had a combined endowment of $411 billion--enough to hire 350,000 reporters.

Education is important; so is journalism.  The difference is that our society recognizes that capitalism is not going to provide us with all the educational institutions that we need.  When we realize that the same thing is true for journalism, we'll be able to find the resources.

The American Medical Association Alliance issues periodic reports on depictions of smoking in popular movies. The group seemed to come up with a good way to publicize their findings--that is, until corporate reality intervened:  

In May, the organization, working with the Los Angeles Department of Public Health, announced that the studio found to be the biggest smoking offender would be publicly shamed on nearby billboards. But billboard vendors throughout Los Angeles--which the alliance said are heavily dependent on entertainment industry advertising--refused to run the ad, according to Ms. Kyler.

"It's a sad day when movie studios can promote smoking to youth, but public health advocates cannot find a billboard in the whole city of Los Angeles that will run an ad to alert the public about the problem," she said.

The worst smoking-in-movies offender, by the way, was Universal--a studio mainly owned by General Electric. The country's two biggest billboard companies are both also major players in the broadcasting industry--Clear Channel and CBS.

The New York Times reported (10/15/09) that rocker Jon Bon Jovi has arranged an unusual deal to become an "artist in residency" on NBC, appearing across the network's various shows to promote an upcoming album. The deal is all the more striking because it includes a segment on NBC Nightly News--part of the show's "Making a Difference" series--to promote Bon Jovi's philanthropic pursuits.

The idea apparently originated with Bon Jovi, who took it to NBC.  The financial arrangements behind the deal don't appear to be available, but the network already seems devoted to the idea: "NBC indicated that it intended to make the artist in residence concept a regular feature of programs on its broadcast and cable channels."

The New York Times reported (10/6/09)  that the Federal Trade Commission was planning to establish new rules for bloggers:

The FTC said that beginning on December 1, bloggers who review products must disclose any connection with advertisers, including, in most cases, the receipt of free products and whether or not they were paid in any way by advertisers, as occurs frequently....

For bloggers who review products, this means that the days of an unimpeded flow of giveaways may be over. More broadly, the move suggests that the government is intent on bringing to bear on the Internet the same sorts of regulations that have governed other forms of media, like television or print.

"It crushes the idea that the Internet is separate from the kinds of concerns that have been attached to previous media," said Clay Shirky, a professor at New York University.

The strange thing here is the idea that such disclosure rules are "the same sorts of regulations that have governed other forms of media, like television or print." When's the last time you saw a print or TV book or music review that mentioned that the reviewer didn't pay for the book or album under consideration? Such freebies aren't even considered unethical--unlike the practice of restaurant critics getting free food, or travel writers getting free trips, though such deals happen often and are generally not disclosed when they do. One would think that Tim Arango, the author of the Times piece, would be more familiar with how print journalism operates.

Wired.com has more on the general kookiness of the proposed regulation.  Apparently amateur bloggers will have to disclose freebies, while professional websites--and traditional media outlets--won't. The logic, if you can call it that, is that if you can afford to pay for it yourself, then you don't have to.

Rupert Murdoch's latest hire John Stossel, speaking at a Michigan college:

I quit ABC a couple weeks ago partly because they didn't like what I was doing. They viewed it as too biased.

Yes, ABC promoted Stossel to 20/20 anchor, gave him regular "Give Me a Break" commentary segments and one-hour, factually challenged primetime specials...all because they didn't like him. It's scary to think what the network would have done if they did like him.

On his Media Citizen blog, Free Press' Timothy Karr (9/17/09) has compiled some astounding Glenn Beck, Rush Limbaugh and Lou Dobbs quotes propounding a "fear that's laced with paranoia, stoked by misinformation and prejudice and fed to millions of people via powerful media"--namely that "the most anti-American notion of the lot is the idea that we need to reform the media itself":

While Beck and his ilk want to portray diversity and localism as a dangerous conspiracy to censor, the fact remains that these ideas have been staples of communications policy since the beginning. The central mandate of the Federal Communications Commission--as enshrined in the Communications Act of 1934--is to promote localism, diversity and competition in the media. This same principle of localism has been a rallying cry for several generations of true conservatives.

Broadcasters get hundreds of billions of dollars' worth of subsidies and the right to use our airwaves in exchange for a basic commitment to be responsive to the interests of local communities.

Moreover, the Supreme Court recognized that "safeguarding the public's right to receive a diversity of views and information over the airwaves is ... an integral component of the FCC's mission."

Sadly, the FCC has failed to live up to this standard.

"What mainstream media's fear-merchants are most afraid of," writes Karr, "is not censorship, but an FCC that actually does its job--creating more opportunities for people like you and me to participate in media."

See the FAIR publication Extra! Update: "The Great Spectrum Giveaway" (10/95) by Jim Naureckas.

By now it's old news to any reasonably critical observer that corporate outlets' "business reporters failed to see the crisis in the mortgage and credit markets as it brewed and bubbled," as former City Limits editor Alyssa Katz puts it (CJR.org, 9/14/09), but Katz also gives props to others who noticed how "evidence of its unsustainability was plain to see for those who chose to look":

The fact is, and as immodest as it may seem to say, independents were repeatedly ahead of the curve on covering the mortgage and real estate bubble and in connecting the dots between vital elements of the bigger story—especially the links between predatory and lending and the metastasizing mortgage-backed securities market.

In 2002, the Nation warned that the mortgage-backed securities market’s bottomless appetite for subprime mortgages was financing an epidemic of destructive lending. In 2003, Southern Exposure exhaustively documented Citigroup’s move into the mass production of high-interest loans designed to drain borrowers' meager wealth. In 2005, Mother Jones assigned me to find out why the streets of Cleveland were lined with vacant houses. A reasonable question, and I found the answers on the Wall Street credit securities market. Indeed, all through this period, alt-weeklies told tales found in living rooms and legal services offices of homeowners who had believed a mortgage broker’s misleading sales pitch and wound up facing foreclosure.

Examining "the fact" that "independent journalists exposed the dimensions of the problem with a depth and timeliness that mainstream news organizations simply and regrettably did not match," Katz thinks "it's not about being better journalists; it is about being tuned to a different audience and set of interests." Read FAIR's magazine Extra!: "Busted Bubble: The Press Fell Down on the Job on Housing Prices" (11–12/08) by Veronica Cassidy.

Under the charming headline "Eliminate the Parasites," Newsweek's Daniel Lyons (9/12/09) advances another brilliant scheme to save corporate media from the menace of Google.

Lyons likes the idea put forward by billionaire Ayn Rand fan Mark Cuban:

Cuban's advice: declare war on the "aggregator" Web sites that get a free ride on content. These aggregators--sites like Drudge Report, Newser and countless others--don't create much original material. They mostly just synopsize stuff from mainstream newspapers and magazines, and provide a link to the original....

He says the media companies should kill off these parasites by using a little piece of software that blocks incoming links from aggregators. If the aggregators can't link to other people's stories, they die. With a few lines of code, the old-media guys could snuff them out.

Great idea--except that aggregator sites don't actually have to link to the original articles--they could just synopsize the news they find and leave searching for the original article as an exercise for the reader.  As Cuban himself notes, "very few readers actually click through to the original story," so they can't be the main attraction of the aggregators. Apparently, people go to them because they are a quick way to learn the news of the day--and they're going to keep being that, unless you make it a crime to tell people what the news is. I don't think we want to do that.

The links are mainly there as a courtesy to the content-producer, and they ought to appreciate that courtesy, because more important than the traffic that such links generate directly (though this can be quite attractive, as evidenced by outlets' relentless pursuit of Drudge links) is the fact that they boost your search-engine visibility, particularly on Google. If you stopped people from linking to you, you'd be basically invisible online. And this would be good for corporate media how?

Rather than coming up with a scheme for how to get back at Google, Huffington Post or whomever, corporate media would be better off thinking about why people use aggregator sites. When people are looking for a roundup of all the news in the world, why don't they turn to a newspaper?  And when they do click on your sites, why doesn't that make you more money? Corporate media is, after all, the business of selling audiences to advertisers--if they can't do that as well as Google does, then they just aren't very good at their jobs.