More on Media – ad rates & circulation

Tribune owned Newsday is evidently offering reduced ad rates and a guaranteed circulation minimum (“rate base”). Any business/organization that is not evaluating/changing ad spending is operating at a competitive disadvantage.
Kevin Delaney writes that new media is increasingly challenging “old media” for effective ad dollars:

When executives at DaimlerChrysler AG’s Jeep division wanted to promote an extra-rugged version of their Wrangler brand last year, they commissioned a videogame that allowed players to drive a Wrangler Rubicon up steep inclines and across rivers. The game — “Jeep 4×4: Trail Of Life” — was relatively inexpensive to produce and the company gave it away online.
Within six months, 250,000 consumers had downloaded it and handed over their names and e-mail addresses to Jeep. Nearly 40% of them said they were considering buying one of its vehicles.

Another bit of evidence that things are indeed changing. I’ve subscribed to the New York Times fishwrap version since my days at the UW in the early 1980’s. This week, I cancelled my print subscription (I no longer subscribe to any print newspapers). I’ve found that the internet is far more useful and interesting from an international, national and increasingly local perspective.

Unusual Newspaper Funding Disclosure


Jason Stein’s article on Brazil’s growing soybean export business (and the financial implications for Wisconsin Soybean farmers; Brazil’s costs are lower and they are clearing forests to grow beans) follows a number of articles in other publications on Brazil’s agricultural prowess, including The Star Tribune and the NY Times. Stein’s article is certainly useful and informative (I’m glad they are covering these issues!), however, the article includes a disclaimer that:

Reporting in Brazil was made possible through a grant from the Latin American, Caribbean and Iberian Studies Department at UW-Madison.

I find this amazing. Capital Newspapers is a $112M+ (2003 revenues) very profitable business. I can’t think of one good reason why University funds (direct or indirect) should subsidize this private enterprise. A trip to Brazil, including lodging, food and transportation planned somewhat in advance should cost no more than $3 to $5K. I’d rather see them fund some students, we’d likely get a more for our money.

Ted Turner – My Beef with Big Media

Captain Courageous, or Outrageous, depending on your POV, Ted Turner takes some shots at media consolidation in this Washington Monthly article:

Today, media companies are more concentrated than at any time over the past 40 years, thanks to a continual loosening of ownership rules by Washington. The media giants now own not only broadcast networks and local stations; they also own the cable companies that pipe in the signals of their competitors and the studios that produce most of the programming. To get a flavor of how consolidated the industry has become, consider this: In 1990, the major broadcast networks–ABC, CBS, NBC, and Fox–fully or partially owned just 12.5 percent of the new series they aired. By 2000, it was 56.3 percent. Just two years later, it had surged to 77.5 percent.

Ironically, on the day I read this, Gannett announced that they purchased a rival Green Bay, WI newspaper, the News-Chronicle (along with a number of regional and weekly publications). Frank Wood owned the News Chronicle, which in 1989 published a long series of articles critical of Gannett and its business practices. Richard McCord, the writer of these articles went on to publish a book – the Chain Gang.
Jon Lauck references this book in his disection of the newspaper monopoly situation in South Dakota.

More on Local Media Monopolies – from South Dakota

Jon Lauck summarizes a number of recent posts on the implications of local media monopolies, particularily on our democracy.
Corporate earnings pressure is certainly one thing, but I believe there are other factors at play such as:

  • Insulated environment: The Newspaper Preservation Act of 1970 sanctioned newspaper monopolies. Competition is a good thing, however in this case, the Act has simply created a general malaise.
  • Lowered expectations: Rather than informing readers with depth, many newspaper’s have adopted the USA Today “McPaper” approach. This flies against internet users demands: lots of information quickly and deep information (google and others) when I want it.
  • Hiring: The sports page often has more depth than others.
  • Failure to take advantage of new tools & media.

Money is not the only issue, in fact, I don’t believe it’s the issue. Leadership is.

Weblogs & Journalism – Where’s the money going?

Glenn Reynolds, Jay Rosen and Jon Lauck discuss monopoly newspapers, reduced reporter counts and journalism quality. The Newspaper Preservation Act of 1970 and the general monopoly position of most papers has not done much, as far as I can see, other than insulated entrenched organizations from the market. Perhaps atrophy is starting to take its course.

I summarized my thoughts on Madison’s local newspaper monopoly here (along with some of the unintended consequences). There are some parallels to Microsoft’s tactics.

Local Sports Site wishoops.net makes a splash

Jason Kiley of wishoops.net reported Friday that Madison Memorial basketball player Wesley Matthews will attend Marquette. This is interesting in several ways:

  • Local TV Station Channel 3 credited this site as the source for their Friday evening report
  • Jon Masson, Wisconsin State Journal Sports columnist referred only to a “A state basketball Web site” in his article on the subject. If the subject is worth an article, it is certainly right to link to the site!
  • The site provides a substantial amount of content, far more than the old media types. I wish them well!
  • Interestingly, the Milwaukee Journal-Sentinel is silent on the matter this Saturday morning.

This article, and the old media’s handling is a great example of what Jeff Jarvis refers to as the disintermediation of authority. Advertising revenues will follow over time. The Economist covered this recently (subscription required).

Maytag Skybox Blog

Maytag recently introduced a “personal beverage vendor”! Thinking ahead, they have a business blog devoted to the product. (the product is not for me, and has been slammed as a “product for people who can’t get off their ______ and get a cold drink in the kitchen”.
This is another example of the changing advertising and customer relationship game.

Microsoft Monopoly Tactics in the Newspaper Business (“Old Media”?)

Local print media monopoly, Capital Newspapers (prints and generates advertising for the Wisconsin State Journal and the Capital Times) has announced a new weekly publication that targets long time, successful weekly Isthmus. Capital Newspapers, protected by a federally sanctioned joint operating agreement (Newspaper Preservation Act of 1970: the JOA allows two newspapers to “share” advertising, overhead and printing costs) is using those monopoly derived funds to compete with a traditional, non protected business – Isthmus publishing.
This is similar to a tactic that Microsoft used, illegally, to squish Netscape. See Lee Enterprise’s (owns 50% of Capital Newspaper) 2003 10-K (286K PDF) for a look at the Capital Newspapers (formerly known as Madison Newspapers Inc) local revenues (112M!) and net income of $16M (14%!).
Perhaps this is simply a negotiating/acquisition tactic? Capital Newspapers would likely enjoy acquiring Isthmus Publishing and thereby solidify control of the local print advertising business. This tactic has been used before, with a local business weekly and a children’s (Dane County Kids) publication.
What to do? Vince and Linda and the Isthmus have done a superb job for the community. Send a note to our representatives (Representative Tammy Baldwin | Senator Russ Feingold | Senator Herb Kohl) telling them that the time is long past to repeal the Joint Operating Agreement Statute. And cancel your subscription (if you have one) to the State Journal or Cap Times.
UPDATE – the act is certainly not helping quality, as Glenn Reynolds points out.
UPDATE2 – Perhaps this is the natural manifestation of the Clear Channel effect in Radio – played out in the newsprint business. Madison is fortunate to have two dailies – BUT – they should compete like anyone else, which would change things, significantly.