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June 29, 2012, 9:53 a.m.
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This Week in Review: News Corp. breaks up, and CNN and Fox News’ breaking-news gaffe

Plus: Pulse and Flipboard’s competing news aggregation models, BuzzFeed’s attribution issues, and the rest of this week’s media and tech news.

News Corp. undertakes historic split: In a move that’s been predicted for at least a year or two, News Corp. took a drastic step this week to try to contain the damage from its phone hacking/bribery scandal, splitting its news and entertainment properties into separate companies. Its news company will include all of its newspapers in Britain, the U.S., and Australia as well as its Dow Jones newswire and book publisher HarperCollins; the entertainment company will include 20th Century Fox, the Fox TV channel, Fox News, other cable channels, and BSkyB and other satellite TV properties. The Murdoch family will retain about a 40 percent share in both companies.

Wall Street loved the idea, with News Corp.’s shares jumping at the news that the company was discussing a split. The reason, as The New York Times’ Dealbook explained, is that it could free News Corp. from what’s known as the “Murdoch discount” — the depressed value of the company because of Rupert Murdoch’s influence. Splitting news and entertainment, the thinking goes, frees entertainment to make more money without being weighed down by the newspaper division.

That, said Ryan Chittum of the Columbia Journalism Review, might harm the newspapers just as it helps the entertainment properties. The Guardian’s Michael Wolff contended that the newspapers will lose the upside of being tied to the entertainment side, but keep the downside of being tied to Murdoch. As Reuters’ Felix Salmon put it, “Up until now, Murdoch has never really needed to worry very much about his newspapers’ profitability, because the rest of his empire was throwing off such enormous profits. That’s going to change.” According to Ad Age, though, News Corp.’s papers might do better on Wall Street than many others.

Murdoch said the split wasn’t related to the phone hacking scandal, but pretty much everyone else found that claim preposterous. As Paul Sawers of The Next Web put it, the cracks from the scandal had spread too far. More specifically, according to the Guardian’s Roy Greenslade, this allows News Corp. to invest in the properties it finds profitable (entertainment/BSkyB), and dump the liabilities (British newspapers). Here at the Lab, Ken Doctor said the split will work out quite well for the Murdochs — investors will be happier, and Rupert can still play newspaperman while clearing the way for further entertainment domination.

As for what the move means more specifically, paidContent’s Staci Kramer has a good rundown of what it means for each division, and she and the Guardian also looked at who might head up each company. Mathew Ingram of GigaOM urged News Corp. to let the content flow freely across platforms, though Murdoch said his newspapers would be pushed even harder to charge for news online.

A Supreme breaking news error: The U.S. Supreme Court’s ruling on the Affordable Care Act on Thursday was the occasion for one of the biggest media gaffes of the year, as CNN and Fox News both initially reported erroneously that the act’s individual mandate had been found unconstitutional. Both networks issued statements, though only CNN — whose mistake was more prominently displayed and took longer to correct — could be construed as apologizing. Fox claimed it “reported the facts, as they came in,” a statement with which both Poynter’s Andrew Beaujon and the Washington Post’s Erik Wemple took issue. (Wemple also objected to CNN’s explanation of its error.)

The reaction against CNN in particular was quick and relentless: AP reporters were even ordered to stop taunting via social media. Within CNN, as well, the error was anonymously described to BuzzFeed as “shameful,” “outrageous,” and “humiliating.” Rem Rieder of the American Journalism Review said it was a terribly timed stumble for the struggling CNN, and Wemple admonished, “Someone needs to tell CNN: There is no such thing as fashioning a scoop over something that’s released to the public.”

Others put the blame within a broader context: The Huffington Post’s Jason Linkins described it as a “There but for the grace of God go I” situation for journalists, which was the kind of approach Reuters’ Jack Shafer also took. The American Copy Editors Society’s Charles Apple called it the product of a too-fast media cycle meeting the constantly changing nature of breaking news.

Other news orgs reinforced that emphasis on speed: A Washington Post profile on SCOTUSblog, the top destination for instance Supreme Court analysis, noted the site’s obsession with getting the news first. Meanwhile, mainstream news orgs fought over who broke the story first (Andrew Beaujon’s answer: it depends), and Rem Rieder said that issue is not only unimportant, but harmful to good journalism.

Flipboard and Pulse’s models compete for publishers: The New York Times extended its online pay plan this week to include the aggregation app Fipboard, allowing subscribers to access all the Times’ content there, while limiting nonsubscribers’ access to a few free articles. At All Things D, Peter Kafka pointed out that this is the first time the Flipboard has gotten a major publisher to give it full access to its content there, as well as the first time the Times has given out full access to its content through another platform.

Kafka also wondered if Flipboard access is really going to add much for Times subscribers, since they already have access to the Times on just about any device they could want. On the other hand, GigaOM’s Mathew Ingram liked the idea as a way to acknowledge new ways users are getting news while maintaining control over the pay plan. Jeff Sonderman of Poynter had a few notes for other news orgs, pointing out the Times’ statistic that 20 percent of its readers use aggregation apps and suggesting that this might be a good option for smaller news orgs that can’t afford their own extensive app development. And TechCrunch’s Alexia Tsotsis weighed in with an angry, drunk anti-Times post.

At the same time, though, Conde Nast’s Wired and The New Yorker announced they’re stepping back from Flipboard, giving up selling ads and pulling most of their content. Publishers told Mashable’s Lauren Indvik it’s just easier (and more profitable) to sell ads on their site once Flipboard takes its cut, and paidContent’s Jeff John Roberts said Flipboard may need to reconsider its revenue-sharing arrangement with publishers.

In addition, a day after the Times announced its Flipboard pay plan, the Wall Street Journal announced a similar plan with one of Flipboard’s competitors, Pulse. The Journal’s move was part of a strategy shift by Pulse toward paid subscriptions that the company expects to launch it into profitability. Ingram of GigaOM compared Pulse’s subscription-based model (which involves subscription revenue sharing and Flipboard’s ad-based model — though both are “competing with their publishing clients even as they try to serve them.”

Is BuzzFeed stealing ideas?: BuzzFeed, one of the most popular viral content sites on the web, got some scrutiny this week that raised questions in the ongoing discussion about the validity of online aggregation practices. Slate’s Farhad Manjoo looked behind the curtain at where BuzzFeed gets the material for its most popular viral posts and found they mostly come from Reddit, with attribution (possibly systematically) stripped. Philip Bump of Grist said Manjoo didn’t go far enough in his critique, saying that BuzzFeed isn’t just aggregating but stealing ideas. Gawker’s Adrian Chen found much more blatant plagiarism at BuzzFeed, though he pinned some of the blame on the Internet’s love of context-free images and text.

But The Atlantic’s Derek Thompson pushed back against the BuzzFeed criticism, comparing their raiding Reddit to movie studios grabbing ideas from bestselling books. “BuzzFeed is a hit-maker making hits the only way reliable hits can be made: By figuring out what’s already popular and tweaking them to make something new,” he wrote. Poynter’s Jeff Sonderman also drew some lessons for journalists from a couple of BuzzFeed’s recent popular posts, concluding that one key to taking things viral is to make readers feel something (preferably something positive).

Reading roundup: A few other smaller stories going on in the background this week:

— Google formally unveiled a number of new products at a press event this week — a streaming media device called the Nexus Q (powered by other Android devices on the same network); a $199 tablet called the Nexus 7; its much-anticipated augmented-reality glasses, Google Glass; and a tablet app for Google+, among a few other things. For some analysis, here’s All Things D on the Nexus Q and Google Glass.

— This week in paywalls: The Chicago Tribune’s redesigned website will require registration for some content, a mechanism designed to transition to paid subscriptions. (It’s also including some content from the Economist and Forbes in that plan.) U-T San Diego also launched a metered pay plan, and The New York Times will begin charging for crossword puzzles even outside of its subscriptions. Meanwhile, Gannett said its circulation is down but revenue is up at its paywalled papers, and Steve Outing argued against the metered model.

— Two thought-provoking pieces on reinventing journalism, from different perspectives: The Online Journalism Review’s Robert Niles on how to reboot newspapers by breaking up the chains, and Technology Review’s Christopher Mims on the red flags in many proposals to reinvent journalism (abandoning the news story, lack of knowledge of the business model, vagueness about the medium).

— Finally, some great pieces here at the Lab this week: An interesting post by Jonathan Stray on how our perception plays into news bias, Clay Shirky on the importance of Gawker’s innovation in commenting, and Adrienne LaFrance’s illuminating postmortem on The New York Times’ involvement with NYU’s The Local.

Obama “Dewey Defeats Truman” photo illustration by Gary He.

POSTED     June 29, 2012, 9:53 a.m.
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