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.

ONA: Online journos optimistic
54 % say journalism heading down wrong track
57 % say Internet is changing journalism values
82 % are confident profitable business model online will be found

News sought online
Weather. Science & health. International. Technology. Business & financial. Politics. Sports. Entertainment. Local.

Social media

Blogs
South Korea
(92 % read, 72 % write)
Philippines
(90 % read, 65 % write)
France (78 % read, 31 % write)
Canada (56 % read, 22 % write)
-- Universal McCann

Online communities
Philippines (83 %)
Brazil (75 %)
China (64 %)
United States (43 %)
-- Universal McCann

Social media:
The business case
Mass media
Creative consumer
Viral marketing
Human touch

Credibility

Networks
Public Expenditure Management Peer Assisted Learning Network
Jordan Professional Communities
Devex

100,000 development projects 1 million development professionals 200 major donor agencies

She needs a filter

We’re learning from…

Network science
“ the organized knowledge of networks based on their study using the scientific method”
-- National Research Council

Cesar Hidalgo

Worlds apart… United States Kenya

Rolf. Rosenkranz @ Devex .com
One stop  Value-added  Wisdom of crowds

The Financial Crisis, Networks and Future of News

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