Big data leaks play a large role in news reporting, corruption and related tangles always headline and hashtag grabbing. Leakers become heros to many. News organizations stake their brands on comforting the afflicted and afflicting the comfortable, paraphrasing American editorialist Finley Peter Dunne in 1902.
In this post-modern, post-recession and purely digital age, afflicting the comfortable comes with a high price for publishers, reporters and editors, noted Guardian editor-in-chief Alan Rusbridger (May 21). “The economics of the (newspaper) industry are changing and not many people are doing this kind of work. Local newspapers, they basically can’t fight. They basically can’t afford the cost of even a couple of solicitors’ letters.”
Not just local newspapers hear from the lawyers. Actor John Malkovich feels big French newspaper Le Monde “damaged his honor” by including his name in the list of 12,000 individuals who held accounts at HSBC and predecessor banks, the notorious “Swissleaks”, suggesting tax avoidance. A French lawyer representing Mr. Malkovich filed suit in a Paris court against Le Monde, and editor and two reporters, reported 20minutes.fr (May 21). Separately, Mr. Malkovich has asked the US Federal Court in New York to allow discovery of correspondence between television network CBS employees and Le Monde reporters.
Since the “Swissleaks” publication Le Monde has been in constant upheaval. Co-owner Pierre Bergé questioned, notoriously, the editorial decision: “Is it the role of a newspaper to throw the names of people out there? It wasn’t for this that I allowed them to gain their independence.” The editorial staff, who are allowed by statute decision making independence, indicated he should mind his own business and, more recently, rejected his preferred managing editor candidate.
As the “Swissleaks” story unfolded in February, Daily Telegraph (UK) chief political reporter Peter Oborne resigned in a fury saying Telegraph Media Group chief executive Murdoch MacLennan was “determined not to allow any criticism of the international bank,” posted to opendemocracy.com (February 17). “The Telegraph’s reporting only looked up when the story turned into claims that there might be questions about the tax affairs of people connected to the Labour party.” Daily Telegraph billionaire owners David and Frederick Barclay are long-term residents of Sark in the Channel Islands and Monaco, known for lenient tax haven laws.
UK media regulator OFCOM “carefully assessed” a public complaint that major commercial broadcaster Global Radio paused “Swissleaks” news coverage before concluding that no action would be taken, reported the Guardian (May 19). The company did confirm to the regulator that “it had advised all of its radio stations to drop the HSBC story.” Global Radio owns LBC London News among many others.
Improving consumer sentiment will held the ad business will grow a bit this year, reported the German Advertising Federation (Zentralverband der deutschen Werbewirtschaft - ZAW) this week. Total ad spending should be €25.3 billion, roughly the same as 2014, said the forecast based on a survey of advertising people. Media advertising will increase 1% to €15.3 billion, roughly two-thirds of all ad spending. The monthly GfK German household confidence index for May reached its highest level since 2001.
Online advertising is taking an ever bigger piece of the action, forecast for €1.35 billion this year, up 6.6%. Television remains the biggest at €4.3 billion, rising 4%. Outdor advertising will also be up 4%, to just under a billion. Net ad revenue for newspapers will be €2.85 billion, dropping 2.8%. Slightly more than half of ZAW members (52%) expect no change in 2015 ad revenues, 31% expect more and 14% less.
There is, of course, turmoil. “Now more than ever companies encounter comprehensively informed customers,” said ZAW president Andreas Schubert in a statement. “The variety of information sources” has changed the way people hear and see advertising. “Different from the past, consumers have the possibility via social media to communicate directly with brands, companies or products.”
Private broadcasters association VPRT sorted the numbers a bit differently. Traditional TV advertising for 2015 should be up between 2% and 3% and online video ads, forecast for about €320 million, will rise between 25% and 30%. Add them together, as they did, shows video advertising at €4.715 billion this year. Traditional radio, under pressure from cheaper video ad rates, will fall 1.1% from 2014 but online audio advertising off-sets the expected loss. Trends, said VPRT spokesperson Frank Giersberg, “are subject to cyclical fluctuations… and remain highly dependent on a level playing field against global market participants.” (See VPRT statement here - in German)
Politicians might get in the way of the good times. “The fundamental concern is advertising regulation; competition and consumer protection less so,” said ZAW managing director Manfred Parteina. “Many politicians want to protect supposedly overtaxed citizens from themselves.”
Government demands for cost cutting is not news to public broadcasters. When Bulgarian National Radio (BNR) Director General Radoslav Yankulov recently announced severe salary cuts the broadcaster’s staff - editorial, in particular - expressed themselves. “Where does the money go?” said a sign posted on a BNR headquarters door. They called for Mr. Yankulov’s resignation and the entire BNR Council.
“Beneath the surface of all this,” offered capital.bg media critic Vesislava Antonova (May 17), “the problems are much more serious.” BNR employs 1450 people and operates four national radio channels, seven regional channels and an international channel. “All this provides great opportunities for a larger audience and quality content, but only if (it) is well managed.” (See more about media in Bulgaria here)
“BNR seems like an archaic media without meaningful future,” observed Ms Antonova with typical blunt verbal instrument. Constant policy changes have led to institutional inertia not limited to management, which she called “unmotivated,” but also with the media regulator, which appoints upper management, and the Bulgarian government. “BNR has no long-term vision.”
In reply, Mr. Yankulov said the salary reductions will prevent cuts to non-labor costs. “As you can see, there are not many options that will not provoke discontent and tension.” The debate continues.
Scaring Them Away Does Just That
Economic theory offers that consumers are, after all, quite rational. Absorbing information they deem necessary choices are made. That information comes from a lot of sources or, most often, just a few. Restricting choices doesn’t necessarily nudge them along, disruptive opportunities quickly appear.
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