The Business of Journalism: Profits and Editorial Integrity

1
The Business of Journalism Profits and Editorial
Integrity

• Media Law and Ethics JMSC0019 October 2007
• Assistant Prof. D. Weisenhaus

2
Profits v. Editorial Integrity

• News is a business. It has always been so. --
  Taking Stock Journalism and the Publicly Traded
  Newspaper Company, 2001
• Newspapers are owned by individuals and
  corporations but freedom of the press belongs to
  the people. --Anonymous

3
General questions

• Are there aspects of news production that should
  be off-limits to budget/company pressures?
• What can news departments do to enhance their
  profitability? Should they even think about that?
• What can editors and news directors do to protect
  integrity of reporting from business pressures?

4
History

• Separation of business and news is fairly recent
  phenomenon. In 1800, most common name for US
  paper was The Advertiser!
• Newspaper purpose advertise commerce or promote
  partisan politics
• Joseph Pulitzer Dont teach business side of
  journalism because it would corrupt journalists.

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Newspaper trends...

• As in Hong Kong, U.S. newspapers privately
  owned, try to make profits
• Not licensed by government or receive government
  subsidies
• Are protected by law
• Most newspapers owned by shareholders
• Trend toward chain newspapers.

6
Owners priorities v. readers values?

• Owners Make money. Make propaganda?
• Promote own views, needs? Give
• social value? Have prestige?
• Readers Want news. But what kind? About
  government? Entertainment (murder, sex cases)?
  What else?

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How profitable are newspapers? Until recently,
very profitable!

• In U.S., newspaper profit margins were 2-3 times
  the average for US manufacturing. 20-30 vs. 7-8
• Investment in news coverage down
• production expense down
• payroll down
• marketing up
• revenue/profit up

8
The search for audience, profits

• Ming Pao Looking for ways to increase
  productivity, management has circulated a set of
  objectives
• Two Is Stories must be interesting and
  informative.
• Two Qs Reporters must produce quality and
  quantity
• Three 3s Reporters must provide 3 news ideas a
  week, must produce 3 page leads and must contact
  3 newsmakers.

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Hong Kong profits, 2006...

• Ming Pao HK35 million, up 41
• Next Media HK583 million, down 22
• SCMP Group HK419 million, up 37
• Sing Tao News Corp HK178 million, up 477!
• Oriental Press Group HK300 million in profits
  in 2004, but profits plunged to HK3.8 million
  for second half of 2006!
• Whats going on?

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Hong Kong media history

• Before 1970s, most HK papers have political
  leanings as leftist, rightist.
• In 1990s, economic, market forces start changes
• Before 1995, Oriental is market leader in readers
  while elite papers had market niches
• 1995 Apple Dailyworldwide trend of
  market-driven journalism comes to HK
• 1997 Asian financial crisiscrumbling real estate
  market takes toll on advertising
• Late 1990s, early 2000s dot.com mania and later
  crash. Still, many newspapers have online
  presence
• 2003 Ads still down, SARS. Metro free daily
  launched
• 2005 Ads picking up. 2 other free dailies.
• 2007 The Standard becomes 1st English free daily

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HK media market scene

• 14 daily Chinese language newspapers, plus free
  dailies (Metro, Headline Daily, am730)
• 2 English-language dailies (1 now free)
• 3 radio companies (10 channels)
• 4 free-to-air terrestrial channels, TVB market
  leader
• Pay cable companies

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HK newspaper market

• In past, HK newspapers dominated by Oriental
  Press Group and Next Media controlled 70 of
  newspaper readership. Now?
• Oriental Daily News (OPG) 400,000 (?)
• Apple Daily (Next) 299,000 (down from 371,000 in
  2000)
• The Sun (OPG) 100,000(?)
• Ming Pao 97,000 (same in 2000)
• SCMP 102,000 (92,000 in 2000)
• Hong Kong Economic Times 75,000
• Metro (344,000), am730 (270,000), Headline Daily
  (700,000!)
• The Standard as free daily 120,000. Wont say
  what its previous circulation was.
• Total free daily circulation almost 1.5 million!

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Oriental v. Next

• Oriental Press Group Founded 1969 by Ma
  brothers. Became HKs best-selling paper in less
  than 10 years. Started Sun newspaper 1999.
  Largest shareholder is wife of younger brother
  who fled to Taiwan after 77 drug charges. Ma
  Ching-fat current chairman. Engaged in price
  wars.

• Next Media Jimmy Lai, largest shareholder. Made
  in Giordano chain, founded company in 1990,
  Next magazine (1990), Easy Finder (1991), Apple
  Daily (1995), Taiwan Next Mag (2001), Taiwan
  Apple Daily (2003), Sharp Daily (free daily in
  Taipei, 2006)

14
Ming Pao v. Sing Tao

• Ming Pao Enterprise
• 1959 by Louis Cha.
• Largest shareholder Tiong Hiew-king, Malaysian
  timber baron, worth US1.4 billion.
• Began international editions, 1990s, Toronto,
  Vancouver, SF, NY
• One Media Group Chinese Rolling Stone, Ming Pao
  Weekly, etc
• 2007 Merger w/Sin Chew Media Corp and
• Nanyang Press Holdings
• Now, largest Chinese media group outside China (5
  newspapers, 37 mags, 3 websites) The Chinese
  Rupert Murdoch??

• Sing Tao News Corp. (Sing Tao daily HK, Aust.,
  NZ, UK, US, Canada/Standard/
• hotels/real estate).
• 1938 Sing Tao founded Aw Boon-haw (Tiger Balm),
  1954 daughter Sally
• 1999 Sold to Lazard Asia Fund
• 2001 sold 51.4 to Charles Ho, tobacco tycoon.
• 2005 Headline Daily, largest circulation of
  free dailies
• 2007 Standard free, to compete with SCMP?

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SCMP Holdings

• SCMP Holdings Largest shareholder, Kerry Group,
  Robert Kuok, ethnic Chinese businessman in
  Malaysia (net worth US5 billion, made in sugar
  trade.) Kuok has interests in hotels (Shangri-La
  Grp), shipping, plantations, commodities in 15
  countries.

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Grand contradiction

• Media is commercially based or market driven
• Media in free society has crucial public
  function promote ideas and inform
• Protected by law

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Media Trends

• Trend 1 Concentration of corporate control
  through acquisitions
• Trend 2 Non-media international and regional
  conglomerates emerging as major players.
• Trend 3 The China Factor. Growing integration
  with Mainland in ownership, market, production.
• Trend 4 Media battlefield is regional and
  global.
• Trend 5 Media owners expand through alliances
  and networking.

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What is (was?) the business of news?

• The business of news is news. Growth of newspaper
  industry driven by publics appetite for
  news...News was product around which business was
  shaped. News has long been selected, presented
  and packaged in appealing -- and profitable --
  ways. (comics, sensational headlines, extra
  editions, penny papers, news graphics)

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Now?

• The business of news is business, not newsNews
  is shaped by audience rather than audience shaped
  by the news.
• Business of news is no longer providing broad
  public information to mass audience but providing
  specialized information to smaller and more
  profitable audiences.
• --Taking Stock

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Pros v. Cons of Big Business

• Pro more resources, more distance between
  advertiser and editorial content, more power.
  Less involvement by owners. E.g., Jimmy Lai/Next
  and Charles Ho/Sing Tao
• Con more resources to protect, less concern over
  editorial integrity, no accountability to
  community, less choice of content.
• Any more arguments?

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Whats the alternative?

• Jack Fuller Need for financial independence. If
  social purpose is to provide information people
  need to make political choices, they must be
  independent of government and other interests. To
  be independent, must be financially strong. The
  first duty of a free press is to make profit.

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Who Journalists Work For

• Owner/corporation must be committed to citizens
  first.
• Hire business managers who also put citizens
  first
• Set and communicate clear standards
• Journalists have final say over news
• Communicate clear standards to public

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Remember the Core Values

• Integrity, fairness, accuracy, full disclosure,
  sound news judgments
• 1) obligation to the truth
• 2) serve public interest first
• 3) monitor powerful/offer voice
• 4) provide forum for comment, criticism
• 5) maintain independence
• 6) make news engaging, relevant
• 7) keep news comprehensive, proportional
• 8) remain true to personal conscience