Thursday, December 18, 2008

Media Meltdown

This may very well be a white Christmas, but for much of the country holiday dreams have turned into a nightmare. The current recession and financial uncertainties are resulting in substantial layoffs, which are then only compounding the economic downturn.

Take the media sector, which was already experiencing financial challenges due to technological advances and shifting consumer habits prior to the recession. Media companies are slashing costs, streamlining operations and purging their payrolls. Newspaper staffs, network entertainment divisions and news departments are all being reduced. A lot of very creative and smart people are out of a job at a time when hardly any company is hiring.

Advertising dollars, which were already spreading out over an ever-increasing number of alternatives, are now melting away faster than snow in Las Vegas. Automobile advertising represents 20% or more of a broadcast network's revenue. For a network with $4 billion in ad sales, automobile companies account for about $800 million in revenue. Automobile advertising can account for as much as 50% of a local television station's revenues. Of course, car ads are the lifeblood of local newspapers. So, what if two major automotive companies go out of business? The Detroit Free Press has already announced it will only offer home delivery three days a week.

Journalism, while still a popular subject in college, has been buffeted and battered by the winds of change. Americans are altering the way they get their news. Gallup just released a poll measuring shifts in the popularity of news sources over the past two years. Local TV news ranks first but it has fallen from 55% to 51%. Local newspapers saw a decline from 44% to 40%, and the broadcast network's evening newscasts declined slightly, from 35% to 34%. The real winners were cable news, up from 35% to 40%, and the Internet, up from 22% to 31%. Keep in mind that this past November CNN had the highest rated election night coverage, for the first time surpassing all three of the traditional broadcast networks. And Fox News and CNN each led the ratings during one of this year's presidential debates, another first.

A few days ago a group of journalism students toured a national news organization. A top cable news executive asked where they got their news. While a couple said they occasionally watched local news, none watched the network evening newscasts. A handful read a daily newspaper, but most went online to The New York Times or CNN site. Many watched some cable news each week, mostly CNN and Fox News. Yet all of them expressed concern about where they will be able to find a job and what the future will bring for their chosen profession. That concern is palpable among many formerly well-compensated and very talented journalists who have been squeezed out of the system.

Consolidation of media companies will accelerate in 2009. One or two traditional broadcast networks may very well have new owners by the end of next year. Meanwhile, reductions in operations and personnel will continue, and programming strategies and business models will be driven by financial necessities. The Internet will provide more and more revenue to the bottom line, but not enough to totally offset ad revenue losses. Local media outlets will increasingly rely on "central" content providers or aggregators and less on their own staff. Wages will be reduced, well-known talent will be let go, more reporters will be required to shoot and edit, unions will give concessions and capital budgets will be slashed. "Cough up the bucks," as Neil Young sings in his recent release.

The media industry is evolving at an ever-increasing pace. Web 2.0 is quickly becoming Web 3.0. Of course, no one is totally future proof. However, those who can reinvent themselves will be in the strongest position going forward. Those who adapt to and embrace technological and business changes, and who offer talent and imagination, will have the best chance in tomorrow's workforce. No matter the distribution platform, well produced, interesting and relevant content will be king.

Wednesday, December 17, 2008

Cough up the Bucks

Neil Young pounded his brazen and blunt guitar leads out on stage and they surged through Madison Square Garden last night to the delight of his adoring fans. His presentation included a mixture of old classics and timely new songs.

Young straddles and bends as he cradles his 1953 Gibson Les Paul guitar, the one he calls "Old Black." His left foot thumps, his body twists and turns, almost hulking, and his long stringy hair flops and waves from side to side. He reaches deep inside for his distinctive voice and crinkles his face on the highest notes. He bounces to the left and darts to the right as his fingers fly up and down the guitar neck and his right hand slashes and stabs at the strings. Precision gives way to raw emotion. He is an aging rock star who lives in the moment. "It's better to burn out than to fade away," he screams with passion and fire.

His lyrics vary from simple and real to sardonic and rebellious. This "Godfather of Grunge" played his classic tunes such as "Cinnamon Girl" and "Cortez Cortez." His work has influenced many groups including Pearl Jam, Nirvanna and Wilco. He electrified his audience with "Rock and Roll is Here to Stay," an anthem for many baby boomers. The raucous crowd stilled for "The Needle and the Damage Done." Then, hunching over a pipe organ, he played and sang an appeal to the masses called "Mother Earth."

He often strives for relevance in his music; "Ohio," "Rockin'in the Free World," "Let's Roll" and "Let's Impeach the President" are some examples. So it was hardly surprising last night when he shouted "Cough up the Bucks" and sang, "Where did all the cash flow?/Where did all the money stream?" He carries his cynicism around with him where ever he goes. A native Canadian, he is frank, terse and to the point. Though he has had his ups and downs, he is always truthful and resilient.

Near the end of the concert he returned to fan favorites including "Heart of Gold" and "Old Man." Young knows his audience well and he entertains them with raw respect and bold directness.

Tuesday, December 9, 2008

"Ubi Est Mea"

Perhaps more than any other U.S. city, corruption has been a way of life in Chicago. This, after all, is a city that always got things done; "the city of big shoulders."

Chicago began in 1833 as a small town with a population of about 350. But by 1860 it was the fastest growing city in America and had a population of about 112,000 residents. That year Abe Lincoln was selected in Chicago on the third ballot to become the Republican Party's first candidate for president. Lincoln supporters famously jammed all the seats of the Chicago convention hall, known as the "Wigwam," locking out supporters of New York Senator William Seward. Since then Chicago has hosted more American national political conventions than any other city.

Chicago always did things in a big way. In the 1850's it reversed the flow of the Chicago River to open a path from the Great Lakes to the Mississippi River. The 1871 Chicago Fire destroyed more than one-third of the city; they were primarily wooden structures. Chicago quickly rolled up its sleeves and rebuilt itself. By 1885 it became the site of the world's first "skyscraper," which had a steel skeleton. In 1893 it hosted the spectacular Chicago World's Fair, which featured great architecture and electrical power.

Chicago became the "Second City" in size but the first city in railroads, serving as America's transportation hub for decades. Chicago also became the "hog butcher" to the world, as the Chicago Stockyards were America's leading source of livestock. Because of its central location it became a through way for all things going east and west. And up until recently, Chicago's O'Hare airport was the world's busiest.

But there was always a dark side to the city. Chicago became the home of the notorious "Outfit" in the early 1900's. By the 1920's Al "Scarface" Capone was the boss. This powerful crime family operated independently of the five families in New York. During their heyday the Outfit ran illegal activities throughout the Midwest, Miami, Las Vegas and Hollywood. Using skimmed Teamster pension funds they built many of the original casinos in Las Vegas. Jimmy Hoffa may have known too much. Couriers would regularly travel from "Vegas" carrying suitcases full of cash. Frank "The Enforcer" Nitti, Paul "The Waiter" Ricca, Tony "The Big Tuna" Accardo, Jackie "The Lackey" Cerone and Joey "The Doves" Aiuppa all got their cut. Rumors had it that the Kennedy administration talked to Sam "Momo" Giancana about taking out Cuban leader Fidel Castro. The Outfit wasn't happy it lost its Havana business. Soon Momo had too high a profile so in 1975 he was "whacked" while cooking Italian sausage in the basement of his home.

Politics in Chicago has always been rough and tumble. Heads got busted, people were shook down, deals were made and things got done. It was always part of the city culture. From the mid-fifties to the mid-seventies Democratic Mayor Richard J. Daley ran the city. He was the last of the big city bosses. His powerful machine elected alderman, senators, governors and even President John Kennedy. "Vote early and vote often," was the Daley machine mantra. Supporters got city jobs and political favors. The trains ran on time.

Daley harshly cracked down on anti-war demonstrators during the 1968 Democratic convention in Chicago. Famous for his malapropisms, Daley declared, "Let's get the thing straight, gentlemen. The policeman isn't there to create disorder. The policeman is there to preserve disorder." He was appalled that tens-of-thousands demonstrators would disrupt and damage his city. At one point Daley issued a "shoot to kill" order to police to be carried out against violent rioters. Daley was widely denounced for his tactics.

Over the years, Mayor Daley consistently brushed aside charges of government corruption. "Look at our Lords disciples," he once said, "One denied Him; one doubted Him; one betrayed Him...If our Lord couldn't have perfection, how are you going to have it in city government?" But soon the Daley machine began to crumble as three powerful aldermen, and Daley associates, were convicted on a series of fraud, conspiracy and bribery charges. The U.S. Attorney described it as a "turning point" in the battle against corruption in Chicago. One local publication wrote, "Chicago politics will never be the same again."

But forty years later, Chicago style politics seems little changed. The charges against Illinois Governor Rod Blagojevich may make "Lincoln role over in his grave," but many Chicagoans are probably just thinking, "Here we go again."

That's why the late great Chicago newspaperman, Mike Royko, gave the "Windy City" its official motto: "Ubi Est Mea -- Where's mine?"

Tuesday, December 2, 2008

Couric's Do

Katie Couric is an outstanding talent and journalist. She is also courageous. These facts are immutable.

In May 2006 Katie gave up her co-anchor position on the Today Show, a position she successfully held for fifteen years. She wanted to try something different. She also had important personal reasons for wanting a change; she is a single mother raising two young daughters.

Katie chose an opportunity to anchor the CBS Evening News, the flagship newscast for America's most storied broadcast news organization. Katie would be the first woman to solo anchor a network evening newscast. This was a truly historic move.

But from the moment she arrived there were issues. CBS News had a long and rich tradition of growing anchors. It had been through a very difficult decade of budget cuts and internal turbulence. And CBS News also had a rigorous organizational culture, an abundance of ambitious employees and an enormously loyal audience. This was a most difficult transition to execute.

The ratings for all evening newscasts had been declining precipitously over the past decade, so it was time for a change. But CBS News may have changed the broadcast too dramatically. Since people who watch the evening news actually want to watch the evening news, many rejected these changes as non-traditional. Some of them defected to NBC or ABC. Expectations were poorly managed.

Today the CBS Evening News is as good as its competition. Its political coverage this election was very strong and most informative. Katie's interviews with Governor Sarah Palin may have been the most decisive event in a truly historic election. Critics, politicians and viewers all praised Katie for her smart and thoughtful questioning of Governor Palin. Katie "has hit her stride" reported most accounts.

For months CBS executives complained that some viewers and some press could not accept a woman as a national anchor. Charges of misogyny flew, but I couldn't believe them. Yet today's New York Daily News had a story about Katie's new hairstyle which she first wore Monday night. It was picked up by other national publications. There were even several Internet polls on how people liked Katie's new do.

Isn't it sad, that on a day when India is struggling with the aftermath of a despicable terrorist attack and America is reeling through a depressing recession, CBS News anchor Katie Couric's new hairstyle would create such a national stir.

I guess I was wrong. Women are still viewed differently.