What’s Right With the News
”Quality Pays” Conference Draws Leaders
By Bill Duryea ’05
Charles Eisendrath welcomes a live and televised audience to a discussion
of where
things are going right in the news.
Dan Rather was under fire for CBS’s use of possibly fraudulent memos and CNN was taking heat because two of its “Crossfire” hosts were simultaneously advising the Kerry campaign. It seemed an odd moment for a conference trumpeting what’s right with the media.
“There is general agreement here that the best organizations have never been better,” said Charles R. Eisendrath, director of the Knight-Wallace Fellows at Michigan. “There is also agreement that the vast majority of news reports have never been this weak.”
And yet, the media business is doing fabulously well; average profits for newspapers are 25 percent, “double historic levels. Television is 50 percent,” Eisendrath said. It’s 1904 all over again, he said, the only difference being that circulation was going up when Joseph Pulitzer and William Randolph Hearst were battling.
“This spring I got tired of whining,” Eisendrath said, explaining to a live audience and regional cable television system at the University of Michigan the origin of the idea for a conference “Quality Pays: The Press and Public Policy.”
“This is the first conference any of us knows of on strategies for doing this right,” he said. With sponsorship from the W.K. Kellogg Foundation, Eisendrath assembled a 14-member panel—from a small regional paper in Oregon to an international financial news service. “They are building audiences and enlarging their product by improving quality.”
Jill Abramson, managing editor of The New York Times, drew a simple link that would be repeated many times during the course of the afternoon, between a publisher’s financial investment and the quality of the end product.
Several days after 9/11, Abramson said, Times publisher Arthur Sulzberger Jr. asked his staff a simple question: “What do you need?” From that open-ended question was born the daily special section “A Nation Challenged,” which contained no advertising but which was the centerpiece of the Times’ Pulitzer prize-winning coverage of the attacks. “Taking time to establish the truth,” she said, referring to year-long investigative pieces the Times routinely produces, “may sound old-fashioned in this 24-hour news cycle, but it is the cornerstone of the Times’ mission.”
Taking time takes money.
The Times, said Thomas Carley, the paper’s president of news services, brings in “just over $1-billion” of ad revenue each year and has done so for the past four years. This is a figure unequaled by any other publication in America, he said, a testament to the value advertisers place on a highly educated, high-earning readership.
Matt Winkler, founding editor-in-chief of Bloomberg News, described his international audience as having one thing in common: “They care about money in all its forms.”
Bloomberg News consumers, by virtue of their wealth, “have the most at stake,” Winkler said. “Timely perspective increases the chances they will protect or increase their stake.”
Winkler was not the last speaker whose recipe for success seemed to depend largely on satisfying the demands of an “elite” news consumer. It was a point made with more or less relish by the three representatives of the so-called “British Invasion”—the BBC, the Financial Times and The Economist.
Eisendrath likened the recent successes of the British media in the United States to the shake-up Japanese car manufacturers delivered the domestic auto industry in the 1970s.
Lionel Barber, the U.S. managing editor of the Financial Times, said his paper has seen five-fold growth in its U.S. circulation since 1997. American readers, roughly half of whom are senior-level executives, now account for about 30 percent of the paper’s 450,000 global circulation.
“How did we do it? We had an owner who was willing to make a big bet,’’ he said. Part of that bet was pumping $15-million into the American and Asian expansion even during an economic downturn.
Twenty-two percent of the BBC’s five-million weekly listeners live in the power corridor between Washington, D.C., and Boston, said senior correspondent Brian Barron.
Half of The Economist’s “slightly over onemillion readers” are in North America, said Clive Crook, deputy editor of the news weekly. “We have the demographics advertisers dream of,” he said, and his magazine has been able to capture them by filling a gap left by the steady “dumbing down” of the American news magazines.
Panelists and several audience members pointedly questioned whether pursuing the richest 10 percent of American society, however profitable, is an effective cure for the ills of modern American journalism and American democracy as a whole.
“I think the state of the media and our democracy now is honestly worse than when I started 15 years ago,” said Charles Lewis, founder and executive director of the Center for Public Integrity, a nonprofit, nonpartisan watchdog group that does investigative research and reporting on public policy issues.
Lewis began the enterprise 15 years ago after abruptly quitting CBS’s “60 Minutes.” “I was tired of shooting people tight, waiting for them to cry,” he said.
At the same time, he saw that “public service (journalism) had gone to hell,” ticking off a list of major stories the media missed, among them Iran Contra and the savings and loan scandal. The media is still missing stories, he said. Why, he asked, is his group the only one to publish the names of all the companies that have government contracts in Iraq?
For smaller newspapers, such as The (Bend) Bulletin in the high desert of central Oregon, public service means “going after topics that are vital to readers’ lives and giving them information that isn’t obvious,” said John Costa, editor-in-chief of Western Communications, a chain that owns The Bulletin and eight other papers.
Regional papers such as the St. Petersburg Times (which has circulation in west central Florida nearly equal to the Financial Times’ in 140 countries) don’t have the luxury of selectively appealing to a narrow demographic that may be scattered across the country or even the globe. They need to mine constantly for new readers in the same coverage area.
Reaching new readers is costly. “It takes people making some bets that might not pay off,” said Paul Tash, editor, chairman and CEO of the privately held St. Petersburg Times Company. Public companies, he said, are sometimes less likely to invest short-term for long-term gains.
Three weeks ago the St. Petersburg Times debuted TBT, a free weekly aimed at the Tampa Bay area’s 25 to 35-year-old market. Advertiser interest was so high, the first issue of the tabloid ran 96 pages, nearly twice the size anticipated, Tash said.
Refusal to incur short-term expense is the reason most news organizations ignore a number of academic studies that show a direct correlation between investment and long-term gains in circulation or viewership, said Tom Rosenstiel of the Project for Excellence in Journalism. “It’s actually extremely predictable, especially at smaller papers,” he said.
Jonathan Knee, senior managing partner at Evercore Partners, who teaches media mergers and acquisitions at Columbia University, challenged the entire premise of the conference.
“Failures arise from assuming that ‘quality pays’ is self-evidently true,” Knee said. “It’s not. Follow your market. Follow your advertisers.”
Certainly the panelists are following that advice to the letter. But the evidence is widespread that instead of pursuing new revenue many local papers are deliberately disinvesting for the sake of short-term profit.
“In some towns where profit margins are 45 percent, sometimes it appears to me the goal is to make the paper just good enough so people won’t cancel their subscription,” said William Marimow, who before he became managing editor at National Public Radio this spring, was a prize-winning newspaper reporter and editor.
Marimow said it is a new experience for him to work at an organization where budget cutting is not an annual ritual. Late last year, NPR received $200-million from the late Joan B. Kroc, wife of the McDonald’s founder.
“We will spend $15-million over the next three years, increasing staff 15 percent from 300 to 345,” Marimow said. “A news organization does not become indispensable by reducing its news hole or homogenizing its news content.”
The Kroc largesse makes expansion impossible not to do. But other media, The Wall Street Journal, for example, learned that improving quality and gaining readers requires investing even during economic slumps. Since 2002, the Journal has spent $240-million to upgrade its printing presses, add color and redesign its front page, said Daniel Hertzberg, the Journal’s deputy managing editor.
The Journal, like so many news outlets, has added an Internet arm to its operation. The Journal’s online edition attracts 70,000 paying subscribers, a majority of whom do not get the paper, Hertzberg said.
Online news services are one of three growing media sectors, Rosenstiel said. The others are ethnic publications and local alternative media.
“For 15 years we’ve known this,” Rosenstiel said, referring to finding where young consumers get their news. “Why are we only now adapting? We don’t want to spend money.”
There is concern that only organizations with deep pockets will be able to pursue this model of success. The result of chasing readers into ever-smaller niches—demographic as well as political—will create what Jill Abramson called “red state and blue state papers.”
What has to be avoided,” she said, “is a total polarization of quality journalism.”
Clive Crook, of The Economist, isn’t much bothered by that. “In England there is ferocious competition among partisan publications. No paper pretends to have no political agenda. The public’s guarantee of an independent press is competition amongst those publications,” he said.
Competition, however, is exactly what’s missing in most markets.
— Bill Duryea ’05 is a general assignment reporter for the St. Petersburg Times.
