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This Week in Review: Network TV threatens to go paid, and newspapers’ slow revenue shift

Plus: BuzzFeed’s native advertising model, protecting anonymous sources at Fox News, and the rest of the week’s news about the future of news.

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Big talk from the TV suits: The TV startup Aereo drew some significant threats from the industry’s giants this week. The major broadcasters have a lawsuit pending against Aereo, which charges subscribers to watch over-the-air TV online by giving them remote access to their own tiny antennas. Unlike cable companies, Aereo doesn’t pay broadcasters retransmission fees, which is why they’re trying to shut Aereo down in court. In an article on Aereo’s threat to the TV business, Reuters noted the drastic option that two broadcasters are reportedly considering: Going off the air entirely and becoming a cable channel instead.

The next day, one of those broadcasters made its threat public, as News Corp.’s Chase Carey said in a speech that his company may move Fox to cable if Aereo is allowed to survive. The heads of Univision and CBS quickly joined the threat. The New York Times’ Brian Stelter has the best explanation of the threats and the surrounding economic situation, and Poynter’s Taylor Miller Thomas has a good piece on Aereo’s background, while The Wall Street Journal’s Shalini Ramachandran reported on the threats to Aereo itself.

The immediate response from most TV industry watchers was an eye-roll (the words “saber rattling” were thrown around a bit). The Los Angeles Times’ Joe Flint explained why Aereo doesn’t present as big of a threat as the broadcasters think — the chances of it teaming up with a cable company to get around retransmission fees are almost nil. And as he and others like The Atlantic Wire’s Rebecca Greenfield and The Verge’s Greg Sandoval pointed out, going to cable would be an incredibly laborious process, requiring permission from many of its contractual partners, such as the NFL and MLB.

John Bergmayer of Public Knowledge and Mike Masnick of Techdirt both argued that the networks’ ultimatum simply reveals how arbitrary and anachronistic their current model is. As Masnick wrote, Aereo doesn’t affect (and may actually help) their ad model; it just interrupts the gravy train of cable retransmission fees: “So, an artificial situation came up that let them get lots of money, and now that it might go away (and reality is that it won’t go away for a long long time) they’re threatening to take their ball and go home?”

Forbes’ Jeff Bercovici countered that the networks’ statements aren’t just idle threats, but real possibilities to be taken seriously, and Peter Kafka of All Things D noted that while it may not be likely to see them jump to cable, the networks’ investors love the idea.

Slightly less bad news for newspapers: The Newspaper Association of America issued its annual report on the financial state of the newspaper industry, and for a business that’s been battered nearly beyond recognition over the past decade, this year’s report of a 2 percent decline in revenue almost felt like good news. The Washington Post’s Paul Farhi laid out the basics — print advertising is still in freefall, but circulation revenue was up for the first time since 2003, thanks to digital subscriptions.

Industry analyst Ken Doctor has a remarkably thorough review of the report, concluding that while we’re seeing a bit of business-side innovation, the pace of progress is agonizingly slow. He also noted that much of the digital subscription growth is coming not from online-only subscriptions, but from print-online “all access” bundles. Erik Wemple of The Washington Post and Poynter’s Rick Edmonds were a bit bullish on the report, pointing out newspapers’ new forms of non-advertising, non-circulation revenue that, as Edmonds emphasized in particular, hadn’t previously been measured.

But others emphasized that the picture regarding advertising is still an ugly one. PandoDaily’s Hamish McKenzie called the uptick in circulation revenue an unsustainable one-year jump and said newspapers are still worryingly ad-dependent. And industry analyst Alan Mutter explained why the digital advertising situation is still so dire for the industry: “Though publishers from time to time have blamed Google for taking advertising away from them, the fact is that newspapers, magazines and broadcasters never developed products to compete with Google,” he wrote.

BuzzFeed and the rise of native ads: New York magazine’s Andrew Rice went deep on BuzzFeed this week, looking particularly closely at the site’s advertising strategy, which centers on creating “native advertising” content that’s just as viral as — and often virtually indistinguishable from — its own editorial content. Drawing on Rice’s piece, The Atlantic Wire’s Philip Bump suggested that what sets BuzzFeed apart from other sites trying native advertising is its upbeat content and its belief (and sales pitch) that it’s unlocked the formula to making something go viral.

Mathew Ingram of paidContent, on the other hand, pointed out the hurdles BuzzFeed faces in making its ad strategy sustainable: Some companies are skeptical of its style of content, some of its content falls flat, it’s often expensive, and the similarity between editorial and advertising threatens to undermine readers’ trust. The New York Times, meanwhile, published a broader trend piece on native advertising, in which Mashable editor Lance Ulanoff insisted the ads were “pure editorial,” unlike the old newspaper “advertorials.”

Reuters’ Felix Salmon had some thoughtful analysis of native ads, arguing that they’re far more disruptive than Rice gives them credit for: “a native ad is something that consumers read, interact with, even share — it fills up their attention space, for a certain period of time, in a way that banner ads never do.” The question, he said, is whether they’ll scale. Forbes’ Jeff Bercovici argued that Google needs to reconsider its antipathy toward native ads in its search results, urging it to follow users’ lead instead.

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Defending reporters and anonymous sources: Fox News reporter Jana Winter faced the prospect of going to jail to protect an anonymous source, but got a reprieve from a judge this week. The case involves the trial of the man accused of killing a dozen people in last year’s Aurora, Colorado, movie theater shooting.

Winter got a notebook Holmes mailed to a psychiatrist describing the killing, but the judge delayed a ruling on Winter in order to determine whether the notebook would be admissible evidence in court. Fox News and the Denver Post have good overviews of the situation, and the Columbia Journalism Review’s Sara Morrison talked to Winter’s attorney about it.

Winter’s plight had been covered in the conservative media (particularly Fox News itself) last week, but it was propelled into the mainstream by a BuzzFeed article that questioned whether her case wasn’t getting attention simply because of the reputation of her employer. Others asked the same question, including New York magazine’s Joe Coscarelli and CNN’s Jake Tapper, and within a few days, Mediaite’s Noah Rothman argued that Fox News had successfully shamed the rest of the media into covering the story.

John Cook of Gawker, on the other hand, argued that while Winter deserves to be defended, the fact that she hadn’t been is a function of her bosses’ ongoing fight against the legitimacy and First Amendment rights of the rest of the profession. Meanwhile, Poynter’s Kelly McBride gave her test of whether to use an anonymous source (which she said Winter passed): “Is your story significant enough that you’re willing to spend six months in jail?”

Reading roundup: Other smaller stories to check out this week:

Tumblrfull.svg— Just a year after it was created, Tumblr dissolved its editorial unit, which ran under the name Storyboard, this week. BetaBeat reported that three employees were laid off, TechCrunch opined that Storyboard’s less lucrative goals fell to the wayside as Tumblr pushes to make its first profit, though Gawker noted that the small unit isn’t costing much anyway. PandoDaily’s Hamish McKenzie wasn’t convinced of the value of Storyboard’s editorial mission.

— WikiLeaks released a set of 1.7 million diplomatic “Kissinger” cables from the 1970s — more cables than their famous November 2010 release — but this was quite different from their previous publications. It wasn’t a leak at all, but documents that have been public for years. In this case, WikiLeaks turned them into a searchable database. Gawker saw it as a potentially valuable service — possibly more for attracting leaks than readers. The Guardian’s James Ball, meanwhile, emphasized the relative smallness of WikiLeaks’ new mission.

— On the open-access front, the academic reference manager and social network Mendeley was bought by giant scientific publisher Elsevier in a long-rumored deal. Mendeley has been built around open access and collaboration, something Elsevier has often fought against, which has many academics (like danah boyd and David Weinberger) dismayed. Mathew Ingram of paidContent chronicled the backlash.

— Bill Adair, founder and editor of the Tampa Bay Times’ pioneering fact-checking site PolitiFact, announced last week he’s leaving to teach at Duke. You can check out exit interviews with him by the Columbia Journalism Review’s Brendan Nyhan and the Lab’s Caroline O’Donovan.

— Two other interesting Q&A’s to take a look at: MinnPost talked with New York Times media critic David Carr, and The European talked with NYU digital media prof Clay Shirky.

— Finally, two other longer pieces to read this weekend: New York magazine’s Frank Rich on the state of the news business, and BuzzFeed’s John Herrman’s proposal to kill the headline online.

                                   
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Ken Doctor    April 17, 2014
Questions about “the business model” sound a little different in Ukraine these days. One English-language newspaper is trying to build a sustainable future in an uncertain land.