Wednesday, January 30, 2019

When government fails, 'business has to step up'

Businesses like to devote part of their marketing and public relations budget to promote how they are  giving back to society. We are not just about profits, they try to say. And the message is arguably true, not just propaganda, as far as it goes.

Fink, from BlackRock.com
But we are starting to hear a different kind of message from business people, and it goes like this:
"Around the world, frustration with years of stagnant wages, the effect of technology on jobs, and uncertainty about the future have fueled popular anger, nationalism, and xenophobia. In response, some of the world’s leading democracies have descended into wrenching political dysfunction, which has exacerbated, rather than quelled, this public frustration. Trust in multilateralism and official institutions is crumbling." -- Larry Fink,
(emphasis mine)
Business people will have to fill the gap left by polarized and paralyzed national governments: this is the message of Larry Fink, CEO of BlackRock, the world's largest mutual fund company. Businesses have to show that they have a higher purpose than just making money. And, by the way, it's in your own interest to do so, he says. BlackRock has used its position as a major shareholder of some companies to push for more socially conscious policies.

(More coverage of Fink's letter was in Bloomberg, Forbes, and Reuters, among others.)

Wednesday, January 16, 2019

What money can't buy in media

Money talks. Put your money where your mouth is. Show me the money.

We have lots of expressions that equate money with crebility and trust. How people get and spend their money is often the most credible expression of what they value and who they are.

We attribute so much value to money and to the way it expresses our true beliefs that historian Yuval Noah Harari declared in his bestseller Sapiens: A Brief History of Humankind:

 "Money is accordingly a system of mutual trust, and not just any system of mutual trust: money is the most universal and most efficient system of mutual trust ever devised."

By extension, this belief in money as the best measure of value of everything in modern society -- the loss of a loved one (insurance payouts), the salary of a teacher or a CEO, a barrel of oil -- has led us to trust markets too much.

In fact, many studies have shown that the media marketplace puts great value in misinformation, disinformation, sensationalism, gossip, and entertainment (Pew, Reuters Institute, Science Advances), as measured by revenue and profits generated from advertising. This is how social networks like Facebook and Instagram make their money.

Versión en español

In putting so much faith in the Invisible Hand of markets, we have devalued the importance of ethics, credibility, trust, and community. (Among my other holiday reading on the topic were a recent column by David Brooks, Jeffrey D. Sachs's The Price of Civilization: Reawakening American Virtue and Prosperity and Joseph E. Stiglitz's The Euro: How a Common Currency Threatens the Future of Europe.)

Tuesday, December 18, 2018

What causes market bubbles, and are we in one?

An all-star group of media economics experts gathered at the University of Navarra Dec. 13 and 14 to exchange ideas and research results on the role and behavior of media during periods of economic or financial boom and crash.

Their approaches were varied: historical, media effects, content analysis, journalistic practice, political economy, etc.

(The full program is here.)

Many of the presentations centered on media coverage of the global financial crisis of 2008-2009 and its impact in countries including Ireland, England, Greece, Spain, the U.S., the Netherlands, Germany, and Denmark. The papers provoked lively debate among the participants, since there was significant time between presentations for questions and comments.

The studies used ingenious research methods and rigorous statistical analysis to tease out surprising insights. I had the unenviable task of providing a summary at the end, on a Friday night, in just 10 minutes. So here is the cheeky result, with apologies to my learned colleagues:

Cause of bubbles: audiences
    •    Overwhelmed by complexity
    •    Uninterested in economics
    •    Ignorant
    •     . . . even willfully ignorant
    •    Lazy, complacent
    •    Delusional

Causes of bubbles: journalists
    •    Overwhelmed by complexity
    •    Lacking training in economics
    •    Excessive sourcing from handful of public officials and financial industry experts
    •    Excessive sourcing from charlatans posing as experts
    •    Overworked, underpaid, forced to write click bait
    •    Self-censorship, serving ownership interests
    •    Uninterested, ignorant
    •    Lazy, complacent
    •    Unethical
    •    Sometimes corrupt

Thursday, November 8, 2018

The benevolent virus that is saving the news media

The network effects that destroyed traditional news organizations are benefiting digital startups, which can grow virally and generate outsized impact in their communities. 

 

From Unimedliving
My teaching colleagues are experts on the economics of the media industry, and we recently had a lively debate on how to reverse the financial crisis of journalism. The collapse of the industry's business model is endangering the institution of journalism-the Fourth Estate, a counterweight to power--by eliminating journalists and media coverage, especially for local media.


It's a question that was explored recently by Ken Doctor at Nieman Lab in his report, "Newspapers are shells of their former selves. So who’s going to build what comes next in local?"

Doctor details a number of initiatives by non-profit and for-profit organizations aimed at filling the gaps in local news coverage involving hundreds of media outlets. But using the standard industry metrics, it doesn't a appear to be sufficient to plug the gaps in the short term without significant changes in the way news media do business. Entire communities are losing news coverage of any kind, a pillar of democratic institutions.

Versión en español

Monday, October 22, 2018

This hub nurtures investigative journalism in LatAm

Huertas: Developing the next generation
BOGOTA, Colombia --  Independent news media in Latin America often lack the financial resources to act as a counterweight to the political powers and multinational businesses in the region.

But these media, many of them digital natives, have found that by banding together they can multiply their scarce resources and magnify their impact beyond their borders to challenge these powers.



One example is a platform for journalists interested in investigative journalism, Connectas.org, based in Bogota, which organizes training and operates a collaboration hub for investigative journalists (in Spanish, ConnectasHub), offers grants of up to $3,000, and publishes investigative projects from all over the region.

Versión en español

The founder and director of Connectas, Carlos Eduardo Huertas, told me in an interview that the goal of the platform is to "pull together a new generation of journalists with training in practical methods of doing in-depth journalism and investigative journalism".

Saturday, October 6, 2018

Innovation studies go back to the future

Predicting the future has always been a dangerous business in the creative industries. As any economist will tell you, products like books, movies, TV shows, and music are "experience goods", which can only be evaluated after they are purchased or experienced.

Making predictions or recommending strategies is especially difficult now with rapid technological change disrupting every creative industry. This theme appeared in several of the presentations at the  Creative Industries and Media Management Conference held at the University of Porto, Portugal, Sept. 19-21. The conference was organized by Paulo Faustino of Porto and Nova universities.



--Michal Glowacki, professor of journalism at the University of Warsaw, presented preliminary findings from a study of the dynamics of organizational culture in public media that identified success factors in what he calls creative media clusters.

Saturday, September 15, 2018

WhatsApp, Instagram top classroom distractions

If I am not careful, my cellphone will wake me up in the wee hours with buzzes or pings to let me know that news organizations and family members on the other side of the world, in different time zones, are trying to get my attention.

Is it too dramatic to say that "there is a global war" for our attention? I don't think so.

Last year I did a little experiment with students in my Media Economics course. Each of them was asked to keep track of how many notifications or alerts they received on their phones or computers during a 45-minute lecture. The average was about 15 alerts, or one every three minutes. WhatsApp, Instagram, Facebook, and Snapchat were the chief distractions.

For a professor leading a class, these alerts could be considered competition.
(At left, Christian Zibreg tells how to remove distracting messages from the locked screen.)

The distraction industry

The competition for user attention has never been greater, and every news site and app is finding new ways to lure people away from whatever they are doing with ever-more-insistent alarms, buzzes, pings, beeps, lights, you name it.

This year, the Media Economics class is slightly larger, with 57 students, and the instructions were different: pick any 60-minute period and measure the number of alerts or notifications received--in essence, any signal that attempts to distract you from what you are doing.

On average, in 60 minutes students reported receiving 41.3 alerts (median 26).