Reporting on Business: Enron and Beyond
Enron’s extraordinary collapse leapt into public view with banner headlines befitting the precipitous fall of a once mighty power. This was a company that not too long before its demise had been the business media’s poster child, praised for its “innovative” practices and consistently listed among the top American corporations. During these heady times, only a few reporters followed leads that eventually took readers past the media’s mostly laudatory words and into the reality of a company whose foundation was crumbling. – Melissa Ludtke, Editor
In October 2001, journalists, publishers, professors and media and stock analysts met for two days at Harvard University to discuss varying approaches to paying for the reporting and distribution of news in the years ahead. This conference—Paying for the Next News—was convened jointly by New Directions for News, a Minneapolis-based media think tank devoted to fostering innovation in the news and information industry, and the Nieman Foundation. Other related material can be found at ndn.org.
Agreement could be found on the supposition that if news companies want to succeed economically, then they cannot just do more of the same. New business strategies are needed, but which ones offer the best chance of success and how they might affect the work of journalists were topics upon which there was less certainty and less agreement. Recognizing the need for innovative actions and engaging in the search for answers did not produce solutions but did stimulate thinking.
In our report on this conference, Nieman Reports highlights—through edited excerpts—the themes addressed and a range of observations that might generate new ways of thinking through a key question that journalists increasingly need to ask: How can the entire “value” of what high quality journalism does be recognized and financially supported by those on Wall Street and beyond who see it as only a commercial product?
Accompanying the commentary are photographs selected to evoke a visual journey of how news was communicated throughout the last century.
Rosabeth Moss Kanter, the Ernest L. Arbuckle Professor of Business Administration at the Harvard Business School, assured participants that innovation is necessary in the news business in this time of technologic and global economic changes. She described the difference between companies who cling to old ways (“the laggards”) and those that embrace change and embed it into their core business (“the pacesetters”). “It’s ironic to me that news companies that are covering waves and changes of technology aren’t saying, ‘Well, what does that mean for us?’” Kanter observed.
Clark Gilbert, an assistant professor at Harvard Business School whose research focuses on entrepreneurship in large companies, talked about a study he was involved with that examined the newspaper industry’s response to the Internet. Many viewed the Internet as a threat rather than an opportunity, and most news organizations were not using the new communication technology in ways that were innovative or made sense from a business perspective. Several conference participants who manage online news sites also spoke of their experiences.
Discussion about using the Internet as a tool for distributing news reporting follows as journalists share ideas and strategies about ways to make newspaper Web sites profitable. Gregg Jones, editor of The Greeneville (Tenn.) Sun, circulation 15,000, writes about his paper’s profitable Internet experience.
No topic received as much attention at this conference as the newspaper business. There was much frustration voiced about the absence of innovation by newspaper editors and owners. As media consultant Ande Zellman said, “Everyone says you can’t do business the way we have in the past. But there’s a culture of risk aversion. It’s change aversion.” Questions also arose about the value and sale of newspaper “content” and about the ways in which to attract new consumers and track their demographic information.
Conference participants struggled to explain what quality journalism is—how to define it and find ways to encourage its practice. A challenge is to figure out how quality in news reporting can be measured and to have those measures embraced by investors. “The news business will continue to decline as we try to satisfy Wall Street and make it cheaper and cheaper and cheaper,” said Philip Meyer, a journalism professor at the University of North Carolina at Chapel Hill, who is working on creating a model that news organizations might use to send a different message about the “value” of journalism to investors. Meyer’s model appears in an accompanying box.
Wall Street’s demand for high profits, coupled with its short-term outlook, exerts great pressure on the news business and fails to take into account other values that are part of journalism’s mission in a democracy—or so the argument went during discussion about the various ways in which publicly owned news companies are exerting a negative impact on journalism today due to investor pressures. As University of Minnesota media management and economics professor Dan Sullivan said, “…news organizations have become pure commodities on Wall Street. They have to compete against the cement company or the water company or any other kind of company for the investor’s dollar and compete on their terms because they’re not out there saying, ‘This is a unique investment opportunity.’” Philip Meyer also reviews two books that, he says, “get to the heart of journalism’s current malaise in economic terms.”
Should news organizations look for ways to better communicate their own business stories to their readers and viewers, as well as to the public? Addressed were questions about how to better communicate this internal story. “[W]e do a paradoxical thing in the way we report on ourselves,” said Geneva Overholser, a media commentator and journalism professor at the University of Missouri School of Journalism. “We report on cuts, and the public hears about layoffs. And yet we don’t report on our earnings, and I know why.…”
Conference participants peered into the future of news and saw competing visions of how it might be delivered, paid for, and consumed. Of primary concern was the intersection of news and entertainment. No one is sure of the direction most consumers are likely to go.
Walter Bender, executive director of the MIT Media Lab, spoke about what technology will and won’t do to address some of the challenges that news organizations confront. “If the topic of today’s meeting is who is going to pay for the news, I’ll tell you right now that technology is not going to pay for the news.” Technology can be used to empower the consumer, he said, but first the news industry must want to engage the consumer interactively. And this, Bender observed, news organizations don’t want to do. “You are fundamentally dismissive of the consumer having any kind of intelligence,” he said.
Our section closes with a statement signed in March by journalists from 24 countries and the European Union who gathered in Salzburg, Austria to discuss the impact market pressures are having on the quality of journalism.
Agreement could be found on the supposition that if news companies want to succeed economically, then they cannot just do more of the same. New business strategies are needed, but which ones offer the best chance of success and how they might affect the work of journalists were topics upon which there was less certainty and less agreement. Recognizing the need for innovative actions and engaging in the search for answers did not produce solutions but did stimulate thinking.
In our report on this conference, Nieman Reports highlights—through edited excerpts—the themes addressed and a range of observations that might generate new ways of thinking through a key question that journalists increasingly need to ask: How can the entire “value” of what high quality journalism does be recognized and financially supported by those on Wall Street and beyond who see it as only a commercial product?
Accompanying the commentary are photographs selected to evoke a visual journey of how news was communicated throughout the last century.
Rosabeth Moss Kanter, the Ernest L. Arbuckle Professor of Business Administration at the Harvard Business School, assured participants that innovation is necessary in the news business in this time of technologic and global economic changes. She described the difference between companies who cling to old ways (“the laggards”) and those that embrace change and embed it into their core business (“the pacesetters”). “It’s ironic to me that news companies that are covering waves and changes of technology aren’t saying, ‘Well, what does that mean for us?’” Kanter observed.
Clark Gilbert, an assistant professor at Harvard Business School whose research focuses on entrepreneurship in large companies, talked about a study he was involved with that examined the newspaper industry’s response to the Internet. Many viewed the Internet as a threat rather than an opportunity, and most news organizations were not using the new communication technology in ways that were innovative or made sense from a business perspective. Several conference participants who manage online news sites also spoke of their experiences.
Discussion about using the Internet as a tool for distributing news reporting follows as journalists share ideas and strategies about ways to make newspaper Web sites profitable. Gregg Jones, editor of The Greeneville (Tenn.) Sun, circulation 15,000, writes about his paper’s profitable Internet experience.
No topic received as much attention at this conference as the newspaper business. There was much frustration voiced about the absence of innovation by newspaper editors and owners. As media consultant Ande Zellman said, “Everyone says you can’t do business the way we have in the past. But there’s a culture of risk aversion. It’s change aversion.” Questions also arose about the value and sale of newspaper “content” and about the ways in which to attract new consumers and track their demographic information.
Conference participants struggled to explain what quality journalism is—how to define it and find ways to encourage its practice. A challenge is to figure out how quality in news reporting can be measured and to have those measures embraced by investors. “The news business will continue to decline as we try to satisfy Wall Street and make it cheaper and cheaper and cheaper,” said Philip Meyer, a journalism professor at the University of North Carolina at Chapel Hill, who is working on creating a model that news organizations might use to send a different message about the “value” of journalism to investors. Meyer’s model appears in an accompanying box.
Wall Street’s demand for high profits, coupled with its short-term outlook, exerts great pressure on the news business and fails to take into account other values that are part of journalism’s mission in a democracy—or so the argument went during discussion about the various ways in which publicly owned news companies are exerting a negative impact on journalism today due to investor pressures. As University of Minnesota media management and economics professor Dan Sullivan said, “…news organizations have become pure commodities on Wall Street. They have to compete against the cement company or the water company or any other kind of company for the investor’s dollar and compete on their terms because they’re not out there saying, ‘This is a unique investment opportunity.’” Philip Meyer also reviews two books that, he says, “get to the heart of journalism’s current malaise in economic terms.”
Should news organizations look for ways to better communicate their own business stories to their readers and viewers, as well as to the public? Addressed were questions about how to better communicate this internal story. “[W]e do a paradoxical thing in the way we report on ourselves,” said Geneva Overholser, a media commentator and journalism professor at the University of Missouri School of Journalism. “We report on cuts, and the public hears about layoffs. And yet we don’t report on our earnings, and I know why.…”
Conference participants peered into the future of news and saw competing visions of how it might be delivered, paid for, and consumed. Of primary concern was the intersection of news and entertainment. No one is sure of the direction most consumers are likely to go.
Walter Bender, executive director of the MIT Media Lab, spoke about what technology will and won’t do to address some of the challenges that news organizations confront. “If the topic of today’s meeting is who is going to pay for the news, I’ll tell you right now that technology is not going to pay for the news.” Technology can be used to empower the consumer, he said, but first the news industry must want to engage the consumer interactively. And this, Bender observed, news organizations don’t want to do. “You are fundamentally dismissive of the consumer having any kind of intelligence,” he said.
Our section closes with a statement signed in March by journalists from 24 countries and the European Union who gathered in Salzburg, Austria to discuss the impact market pressures are having on the quality of journalism.
