The Financial Crisis, Networks and Future of News

The financial crisis, networks and the future of news Rolf Rosenkranz Editor. Devex ICGFM conference. Miami. 5/19/09

The problem

Downturn in global growth

Decline in commodity prices

Tightening of credit

Francis Fukuyama

Why?

Asset prices rising unsustainably

Debt resulting from prolonged credit expansion

Inability of regulators to keep up with new financial instruments

The media

IFAD. EU Financial Crisis News. Crisis Talk. IMF’s Public Financial Management blog. Economist. OECD Observer. Financial Times. Inter Press Service. Devex.

Coverage

USA: no credit for Dr. Doom

South Korea: trial vs. “Minerva”

Russia: “We do not have it”

NL: “Withdraw cash from ATM machines while you can”

Ignorance. Lack of access. News grind.

Cause + effect

Ignorance. Desensitization. Mistrust. Fear.

Pew: Bleak economic outlook causes U.S. to…

Sept. Oct. Dec. Cut back vacation spending 48 % 59 % 62 % Change savings or investments 39 % 48 % 60 % Adjust retirement plans 23 % 26 % 32 %

Pew: Understanding the economic situation

Very well Fairly well Not well Total 24 % 49 % 27 % Men 30 % 50 % 20 % Women 19 % 48 % 33 %

Pew: What the U.S. public knows

Gov’t wants banks to… (lend more money) 83 % Who holds most U.S. debt (China) 71 % Timothy Geithner’s job (Treasury sec.) 58 % Current unemployment rate (ca. 8 %) 53 %

“ Considering the wall-to-wall media coverage of the financial crisis, it is startling to see how few Americans have a grasp on the most basic economic facts.”

-- James Bowers. managing director.

Ctr. for Economic & Entrepr’l Literacy

News coverage milestones

August: U.K., Japan and others enter crisis mode

October: Iceland financial crisis

April: London G-20 summit

Media trends

Concentration. Privatization. Ad wars. Less collective bargaining. Pay decreases. Generation shift. New media. Decreasing quality.

Information = news

Media = press

Audience segment: Traditionalists

46 % of the public

Older, less educated, less affluent

Heavy reliance on TV news

Strong interest in weather

Audience segment:

Integrators

23 % of the public

Middle-aged, well-educ., affluent

TV is main news source, but regularly online

Strong interest in (political) news

Audience segment:

Net-newsers

13 % of the public

Relatively young, well-educated, affluent, male

Read political blogs > watch network news

Strong interest in tech news

2008 U.S. TV news coverage

Pres. elections (ca. 3,700 mins)

Economy (ca. 2,800 mins)

International coverage (1,900 minutes)

-- Tyndall Report

International coverage on U.S. TV

Iraq: 244 minutes (88 from Iraq)

Beijing Olympics: 236 minutes

Afghanistan: 126 minutes

Sichuan earthquake: 119 minutes (94 from China)

-- Tyndall Report

Pew: Foreign news coverage online

27 % of total news

Key topics: Pakistan, Israel-Palestinian Territories conflict, Zimbabwe elections

Press: 17 %

Foreign coverage

Overseas bureaus closing. Reliance on wire services. More freelancers. More competition. Parachute journalism. Multimedia. Time pressure. Global audience.

Journalism’s cardinal sins

Publish easy-to-gather stories

Select safe facts and ideas

Provide “false balance”

Give audiences what they want

-- Nick Davies, author, “Flat Earth News”

“ News organizations will have to do more than adapt to changing technology; they will have to solve their economic problems in a manner that will benefit their customers.”

-- Stuart Loory, editor, Global Journalist

Winners ?

Trade publications. Bloggers. Software developers. Mobile phone companies. Consultants. Nonprofit media. GlobalPost. Content sharing. Pay-per-view. Custom-tailored news. Google.