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Turnabout Is Fair Play: BoomTown Decodes Rupe's Journalism-Is-Not-a-Free-Cow Op-Ed!

Kara Swisher — Mon, 14 Dec 2009 17:05:08 +0000

Last week, BoomTown translated an opinion piece written by Google CEO Eric Schmidt and published in The Wall Street Journal that focused on defending the search giant from criticism that it was, well, killing journalism.

One of the louder critics, in fact, has been Rupert Murdoch, chairman and CEO of News Corp. (NWS), who has been loaded for bear in regard to Google (GOOG), leveling a series of high-profile verbal attacks on the company.

Last week, Murdoch published his own piece in The Journal, which he owns (along with this Web site), on the topic of the wrenching changes in the news business and in which he never mentioned Google by name.

But the company was there anyway, so, in the interests of equal opportunity balloon-pricking, I must also render Murdoch’s post through my decoding machine, because it’s only sporting!

His op-ed, The Journal noted, “has been adapted from his Dec. 1 remarks before the Federal Trade Commission’s workshop on journalism and the Internet.”

What Murdoch wrote: Journalism and Freedom

Government assistance is a greater threat to the press than any new technology.

By RUPERT MURDOCH

Translation: Crikey, as they say in Australia, I have been getting a little wobbly over Google’s growing power, but those bludgers in government will always make me go more troppo.

And, unlike Eric Schmidt, I didn’t need to be called Emperor Palpatine to scare people. Plain old “Rupe” works just fine to give most people the shakes.

What Murdoch wrote: We are at a time when many news enterprises are shutting down or scaling back. No doubt you will hear some tell you that journalism is in dire shape, and the triumph of digital is to blame.

My message is just the opposite. The future of journalism is more promising than ever–limited only by editors and producers unwilling to fight for their readers and viewers, or government using its heavy hand either to overregulate or subsidize us.

Translation: Please try to ignore the salient fact that it was actually Rupert Murdoch–me!–who has been loudly clanging the bell of late about how Google is laying waste to journalism, much as Sean Hannity did to that poor Alan Colmes nightly for a dozen years.

Also, please ignore that I am saying my message is just the opposite, because–really–I hate government more than I hate Google, so this makes perfect sense if you really think about it.

But don’t think about it, mate!

Murdoch wrote: From the beginning, newspapers have prospered for one reason: The trust that comes from representing their readers’ interests and giving them the news that’s important to them. That means covering the communities where they live, exposing government or business corruption, and standing up to the rich and powerful.

Technology now allows us to do this on a much greater scale. That means we have the means to reach billions of people who until now have had no honest or independent sources of the information they need to rise in society, hold their governments accountable, and pursue their needs and dreams.

Does this mean we are all going to succeed? Of course not. Some newspapers and news organizations will not adapt to the digital realities of our day–and they will fail. We should not blame technology for these failures. The future of journalism belongs to the bold, and the companies that prosper will be those that find new and better ways to meet the needs of their viewers, listeners, and readers.

Translation: Teri: Cue the speech about what journalism means for the little people! But also make sure we get in how News Corp. gets all this digital hoo-ha too and how we are not going to let those pointy-heads of Silicon Valley think we are not ready to rumble!

What Murdoch wrote: First, media companies need to give people the news they want. I can’t tell you how many papers I have visited where they have a wall of journalism prizes–and a rapidly declining circulation. This tells me the editors are producing news for themselves–instead of news that is relevant to their customers. A news organization’s most important asset is the trust it has with its readers, a bond that reflects the readers’ confidence that editors are looking out for their needs and interests.

Translation: There was a trophy cabinet and award wall just like that at The Wall Street Journal before I bought it. I ate it it for breakfast.

What Murdoch wrote: At News Corp., we have been working for two years on a project that would use a portion of our broadcast spectrum to bring our TV offerings–and maybe even our newspaper content–to mobile devices. Today’s news consumers do not want to be chained to a box in their homes or offices to get their favorite news and entertainment–and our plan includes the needs of the next wave of TV viewing by going mobile.

The same is true with newspapers. More and more, our readers are using different technologies to access our papers during different parts of the day. For example, they might read some of their Wall Street Journal on their BlackBerries while commuting into the office, read it on the computer when they arrive, and read it on a larger and clearer e-reader wherever they may be.

Translation: Teri: Tell Jon Miller to get on a plane stat and start chit-chatting with those Asian manufacturers asap. I am not going to let Amazon (AMZN) head Jeff Bezos guffaw me into oblivion with his Kindle or have “American Idol” get hijacked by Apple (AAPL) or have those Google (GOOG) twins shine me on, even as they are developing some magic mobile phone.

What Murdoch wrote: My second point follows from my first: Quality content is not free. In the future, good journalism will depend on the ability of a news organization to attract customers by providing news and information they are willing to pay for.

The old business model based mainly on advertising is dead. Let’s face it: A business model that relies primarily on online advertising cannot sustain newspapers over the long term. The reason is simple arithmetic. Though online advertising is increasing, that increase is only a fraction of what is being lost with print advertising.

That’s not going to change, even in a boom. The reason is that the old model was founded on quasimonopolies, such as classified advertising, which has been decimated by new and cheaper competitors such as Craigslist, Monster.com, and so on.

Translation: My second point follows from the first: We can’t charge for milk when we have been giving away the cow for free.

And, frankly, the old media have been lending out Bessie to every Web site that comes looking for a gallon, free of charge, in abject fear that no one likes milk anymore.

In the good old days, when we were the only beverage around–I like to call it a “quasiMOOnopoly”–we could set any price we wanted.

Now, unfortunately, everybody’s got milk.

What Murdoch wrote: In the new business model, we will be charging consumers for the news we provide on our Internet sites. The critics say people won’t pay. I believe they will, but only if we give them something of good and useful value. Our customers are smart enough to know that you don’t get something for nothing.

Translation: People will pay, once we de-index our sites from Google and they can’t get their daily dose of the New York Post’s Page Six for free. Where else will they get the latest online tidbits on the Tiger Woods scandal, for example?

Okay, from everywhere. But Page Six names at least 46 percent more mistresses than TMZ, and that’s worth something.

What Murdoch wrote: That goes for some of our friends online too. And yet there are those who think they have a right to take our news content and use it for their own purposes without contributing a penny to its production. Some rewrite, at times without attribution, the news stories of expensive and distinguished journalists who invested days, weeks or even months in their stories–all under the tattered veil of “fair use.”

These people are not investing in journalism. They are feeding off the hard-earned efforts and investments of others. And their almost wholesale misappropriation of our stories is not “fair use.” To be impolite, it’s theft.

Right now, content creators bear all the costs, while aggregators enjoy many of the benefits. In the long term, this is untenable. We are open to different pay models. But the principle is clear: To paraphrase a famous economist, there’s no such thing as a free news story, and we are going to ensure that we get a fair but modest price for the value we provide.

Translation: By “friends,” I mean “sworn enemies,” also known as “Google.” (Until it meets with me to do a deal and then it is “friends” again.)

By “tattered veil of ‘fair use,’” I mean “the law I am going to get gutted by my 1,473 lobbyists in Washington, D.C.”

By “to be impolite, it’s theft,” I mean “to be impolite, it’s theft by Larry and Sergey.” (Until they meet with me to do a deal and fork over the moolah, and then it will be a “business arrangement.”)

By “there’s no such thing as a free news story,” I mean “I hope to trick those Google-obsessed Bing boys at Microsoft (MSFT) into paying me that boatload of money they aren’t sending Carol Bartz of Yahoo (YHOO).”

What Murdoch wrote: Finally, a few words about government. In the last two or three decades, we have seen the emergence of new platforms and opportunities that no one could have predicted–from social networking sites and iPhones and BlackBerries, to Internet sites for newspapers, radio and television. And we are only at the beginning.

The government has a role here. Unfortunately, too many of the mechanisms government uses to regulate the news and information business in this new century are based on 20th-century assumptions and business models. If we are really concerned about the survival of newspapers and other journalistic enterprises, the best thing government can do is to get rid of the arbitrary and contradictory regulations that actually prevent people from investing in these businesses.

One example of outdated thinking is the FCC’s cross-ownership rule that prevents people from owning, say, a television station and a newspaper in the same market. Many of these rules were written when competition was limited because of the huge up-front costs. If you are a newspaper today, your competition is not necessarily the TV station in the same city. It can be a Web site on the other side of the world, or even an icon on someone’s cell phone.

These developments mean increased competition, and that is good for consumers. But just as businesses are adapting to new realities, the government needs to adapt too. In this new and more globally competitive news world, restricting cross-ownership between television and newspapers makes as little sense as would banning newspapers from having Web sites.

Translation: Oh, I do not like Silicon Valley, but I dislike government even more!

And now that Google is its bogeyman instead of me, I really hope to finally be able to gut all those annoying cross-ownership rules that prevented me from owning the entire media landscape of every major city in America.

This must be done immediately, because those icons on people’s cellphones–especially that dangerous iFart app–are poised for attack!

What Murdoch wrote: In my view, the growing drumbeat for government assistance for newspapers is as alarming as overregulation. One idea gaining in popularity is providing taxpayer funds for journalists. Or giving newspapers “nonprofit” status–in exchange, of course, for papers giving up their right to endorse political candidates. The most damning problem with government “help” is what we saw with the bailout of the U.S. auto industry: Help props up those who are producing things that customers do not want.

The prospect of the U.S. government becoming directly involved in commercial journalism ought to be chilling for anyone who cares about freedom of speech. The Founding Fathers knew that the key to independence was to allow enterprises to prosper and serve as a counterweight to government power. It is precisely because newspapers make profits and do not depend on the government for their livelihood that they have the resources and wherewithal to hold the government accountable.

Translation: You bailin’ out me? You bailin’ out me? You bailin’ out me? Then who the hell else are you bailin’ out? You bailin’ out me? Well I’m the only one here. Who the %*#! do you think you’re bailin’ out?”

What Murdoch wrote: When the representatives of 13 former British colonies established a new order for the ages, they built it on a sturdy foundation: a free and informed citizenry. They understood that an informed citizenry requires news that is independent from government. That is one reason they put the First Amendment first.

Translation: Teri: Please insert the clarion cry of the First Amendment here, as it always stirs the heartstrings.

What Murdoch wrote: Our modern world is faster moving and far more complex than theirs. But the basic truth remains: To make informed decisions, free men and women require honest and reliable news about events affecting their countries and their lives. Whether the newspaper of the future is delivered with electrons or dead trees is ultimately not that important. What is most important is that the news industry remains free, independent–and competitive.

Translation: Believe me, if we could push a button and get rid of the whole Internet, News Corp. and Time Warner (TWX) and Viacom (VIA) and CBS (CBS) and the whole lot of us old media players would.

Barring that, whether the newspaper of the future is delivered with electrons or dead trees is ultimately not that important.

What is most important is that the news industry shake down big piles of dough from those Silicon Valley moneybags–whether they be Google or that Mark Zuckerberg kid, whenever Facebook goes public, or those Twitter dudes (if they figure out a way to make any money outside of fund raising)–in order to remain free, independent–and competitive.

It is, after all, the American way.

Please see this disclosure related to me and Google.

Newspapers to Congress: Please Don't Give Us a Bailout

Peter Kafka — Thu, 24 Sep 2009 14:59:01 +0000

The newspaper bailout proposal you may have heard about over the last few months? The newspapers want no part of it, says an industry spokesman.

That said, the industry wouldn’t turn down some help from Congress, says John Sturm, CEO of the Newspaper Association of America.

Testifying at a House hearing this morning, Sturm says his group does like proposals that would let newspapers–and other businesses–change some of their accounting practices related to tax refunds (via net operating-loss provisions) and pension plans. Oh, and he’s in favor of a proposed law that would let papers operate as nonprofits while still generating advertising revenue.

The complete text of Sturm’s opening statement is embedded at the bottom of this post, and if you want to watch the hearing, organized by Congress’s Joint Economic Committee, it was streamed live (albeit choppily) here.

My political handicapping skills are nonexistent, but that said, I think there’s no chance of Congress passing a bill that singles out newspapers for aid. Local papers are still vitally important to local lawmakers, but many of those lawmakers’ constituents hate their papers, for all manner of offenses, real and imagined. I just can’t imagine what they’d do if they were told their tax dollars were going to support their local rag.

Still, I wouldn’t rule out some politically motivated pressure being applied to bogeymen like Craigslist and Google (GOOG), in the form of antitrust scrutiny or other arm-twisting.

JFS-Statement-Joint-Economic-Committee-092409-Hearing –

Warren Buffett at Fortune Women's Conference: On the Economy and George Clooney

Kara Swisher — Tue, 15 Sep 2009 19:01:58 +0000

Folksy set was on the highest burner possible at Fortune magazine’s Most Powerful Women’s conference this morning, as legendary financial investor Warren Buffett took to the stage.

Buffett, who was interviewed by Fortune’s terrific Carol Loomis onstage in Carlsbad, Calif., held forth to the crowd–made up mostly of women–having instructed Loomis previously to “do anything with me…I like your crowd.”

And, of course, the crowd loved Buffett, who has become a Midwestern Yoda, dispensing snippets of sage advice and clever aphorisms to unabashed fans.

Oh, yes, he also has turned himself into one of the world’s richest men while doing it, presiding for decades over his Berkshire Hathaway (BRK.A) conglomerate.

In the interview, Loomis quizzed Buffett about a range of topics, mostly centering on the economy and the rescue of Wall Street by the federal government.

“I think they’ve done a terrific job, all things considered,” said Buffett about the performance of regulators.

While he said he did not agree with all of the more costly aspects of the various bailouts, he noted that the dire situation needed drastic action.

“We were right at the brink….This country was becoming not only economically dysfunctional, but inoperative,” said Buffett about the econalypse. “We came so close to a meltdown.”

Today, he is much more sanguine about the economic situation, while also noting it was not all sunshine and daisies.

“There are no green shots, but I don’t see anything getting worse either,” said Buffett.

Joking, he noted that the recovery could be quicker if the housing stock was made smaller by blowing up one million houses and allowing “14-year olds to start cohabiting.”

It was an adorkably funny comment, as was his answer to a question from an audience member about who should play him in a movie of his life: George Clooney, of course, but “Danny DeVito’s out.”

Mostly, what struck BoomTown was Buffett’s firm belief in the strength of the system that we have built in the U.S.

“This system works magnificently,” he said flatly.

Well, Buffett is magnificent for dang sure.

Here’s are video snippets of him at the conference–sorry it is a little tinny–talking about women’s underwear, the resilience of the U.S. and why it will be okay in the end:

[ See post to watch video ]

[Photo courtesy of Fortune magazine.]

Viral Video: New Michael Moore Bailout Teaser

Kara Swisher — Mon, 15 Jun 2009 10:14:23 +0000

This week’s viral video is for filmmaker Michael Moore’s latest, which takes direct aim at the banking bailout.

Here’s a picture of Moore, from his Web site, trying–in his usual annoy-security manner–to get into Goldman Sachs (GS).

Called “Save Our CEOs,” the teaser for the movie notes: “This time it’s personal.”

Well, Moore is always pretty much personal, so slapping around Wall Street and the politicians responsible for the econalypse should be interesting, to say the least.

Here’s the video:

Ad Giant Omnicom: Stimulus Spending Could Boost Media by End of the Year

Peter Kafka — Mon, 27 Apr 2009 18:23:22 +0000

Ad giant Omnicom reported that its revenue dropped 14 percent and profits declined by 21 percent in the last quarter, but investors are bidding up the stock in a down market. Omnicom (OMC) shares are up more than four percent today.

That’s presumably because the profit slump isn’t as bad as Wall Street expected. But maybe investors are buying some of the optimism CEO John Wren doled out–sparingly–during the company’s earnings call.

Not only was he hopeful that the “pace of economic decline [will find] a bottom,” he said, but he was hopeful that things could actually start picking up in the media business by the fourth quarter when “massive stimulus spending by most governments should start to have a positive impact.”

See, Bob Pittman? You’re going to get your ad industry bailout after all!

Speaking as an ad-supported media employee, I’d be overjoyed if Wren is correct. But the informal poll I’ve been taking of publishers–on and offline–for the past couple weeks has me thinking that’s he’s probably early. But it sure would be awesome if I didn’t have to run this crater art for much longer.

Weekend Update, 4.26.09

Beth Callaghan — Sun, 26 Apr 2009 13:00:03 +0000

It was a banner week for earnings calls. Yahoo, Microsoft and Apple all got the liveblogging treatment on All Things D.

First up, BoomTown’s anticipation of pistol-packin’ Carol Bartz’s first earnings appearance paid off when Bartz dropped the F-bomb, live and uncensored during Yahoo’s (YHOO) earnings call. And in a very rare occurrence–actually the company’s first-ever year-over-year quarterly sales drop–Microsoft (MSFT) glumly laid out the facts of the recession’s toll on its business. On the musical chairs front, with Chris DeWolfe stepping down as CEO of News Corp.’s (NWS) MySpace, word surfaced that Facebook alum Owen Van Natta would be stepping into the position. The news was confirmed on Friday. BoomTown has all the details, including the press release.

In the ongoing ballad of the newspaper industry, the honor of winning five Pulitzer Prizes at the New York Times (NYT) was offset by news that ad sales are down 27 percent at the paper. In further bad tidings, the newspaper industry is unlikely to get a bailout from Washington. No big takeaways from Apple’s (AAPL) earnings call–Steve’s fine and the company is still not at all interested in developing a netbook. MediaMemo has all the details in a liveblog of the call. MM also notes that Netflix (NFLX) is probably one of the only businesses to benefit from the recession so far since folks are far more likely to rent DVDs than venture out to the local multiplex during these hard times.

In Personal Technology this week, Walt Mossberg discusses the many new OS and system developments coming down the pike that should inform new computer buyers in the near future. In Mossberg’s Mailbox, Walt lays out the details for syncing to an iPhone on MobileMe. And in the Mossberg Solution, Katie Boehret explores the new Nintendo DSi. Compared with earlier iterations of the DS line, as well as on its own merits, it wins some well-deserved praise.

More next week. And RIP, Bea Arthur.

Mr. Newspaper Goes to Washington, Comes Back Without a Bailout

Peter Kafka — Wed, 22 Apr 2009 11:46:12 +0000

The newspaper industry wants help from Washington. But it’s not going to get it anytime soon.

That’s the takeaway from a Congressional hearing yesterday, where some industry executives pleaded their case–specifically, that they need a change in antitrust law to survive.

But if they were thinking that the Obama administration would be receptive to that sort of thing, they got a swift rebuke. Associated Press:

“Newspapers, however rare and financially weak, can adapt and ultimately conquer the threat posed by the Internet, the Justice Department’s Carl Shapiro told a House panel.

‘We do not believe any new exemptions for newspapers are necessary,’ said Shapiro, an assistant attorney general for economics.”

And Congress itself wasn’t any more sympathetic. Yet.

I do wonder, however, how this will change over time. Even in a best-case scenario, we’re going to see lots of newspapers shuttering over the next few years. Professional bomb-thrower Michael Wolff’s prediction that 80 percent of papers will fold within 18 months is too high, but I’ve talked to much more sober folks who think we could still lose a third of our daily papers within a few years.

Those papers are increasingly irrelevant to many of their readers, but they retain an awful lot of political clout. So the issue may be more resonant in 12 months once we’ve seen more papers actually shutter. That still won’t get the papers a Wall Street-sized bailout, but a change in antitrust law won’t seem unthinkable then.

Wall Street's Case of the Mondays

John Paczkowski — Mon, 06 Oct 2008 18:00:41 +0000

[ See post to watch video ]

Wall Street's Case of the Mondays

John Paczkowski — Mon, 06 Oct 2008 18:00:41 +0000

[ See post to watch video ]

Econalypse Now

John Paczkowski — Mon, 06 Oct 2008 16:03:21 +0000

The government’s $700 bailout of Wall Street, signed into law Friday after weeks of contentious debate, clearly isn’t the panacea for which tech investors, and investors in general, had hoped. Technology stocks stumbled at the opening bell Monday and then fell flat on their faces as investors succumbed once again to the market malaise. The Nasdaq fell 5.4 percent to trade at 1843.04, dragged down by the declining valuations of Microsoft (MSFT), Apple (AAPL), Yahoo (YHOO), eBay (EBAY) and others. And Google (GOOG), at $366.73, is fast approaching a new 52-week low. Looks like we’re in for another bloodbath.

PREVIOUSLY:

So What Happened to Solar Stocks This Time?

Eric Savitz — Thu, 02 Oct 2008 22:11:56 +0000

OK, now what’s wrong?

Just yesterday, the ever-volatile solar stocks staged a nice rally, while investors celebrated as the Senate tacked an eight-year extension of the solar investment tax credit onto the incredibly bloated financial bailout bill, which passed last night by a wide margin. The bill now goes over to the House. If approved in its current form, the bill would extend the current 30 percent tax credit for solar panel installations through 2016. That would be a relief for the domestic solar industry, which has been fretting for months about the possibility that the credit might not be renewed when the current credit expires at the end of this year.

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Black Monday

John Paczkowski — Mon, 29 Sep 2008 20:21:59 +0000

[ See post to watch video ]

Grave New World

John Paczkowski — Mon, 22 Sep 2008 19:00:12 +0000

[ See post to watch video ]