Emerging economies — In Baltic States, foreigners import their ethics

This is an unexpected consequence of globalization: foreign investments in media companies have positive impact on their ethics. Take two of the Baltic States: Lithuania and Estonia. Two young democracies, two palpable desires for freedom. A visit of newsrooms in Vilnius and Tallinn shows the same demographics: the average journalist there is at least 10 years younger than in France or UK. As the (27 years-old) foreign editor of the main Estonian paper Postimees puts it : “…in this country, there is no such thing as old journalists”. In the two countries, senior journalists from the Soviet era have since been diluted in politics or public relations, clearing the stage for hungry young journalists.

Then come the differences. In Lithuania, the press remains largely owned by local investors. The result is a great coziness with the new power, once the enthusiasm of the immediate post-communist era has faded. Several local editors explained to me that to get a positive story printed about your business — or to get a negative one about a rival — you just have to pay. This doesn’t go as far as Russia, where, until a few years ago, the website Komsomolskaya’s Pravda (formerly dedicated to the Young Communists) had a price list for customized journalism.

Estonia is different. For cultural as well as geographical reasons, the country has always been under greater western influence. When its independence was re-declared in 1991, the new elite of the country welcomed foreign investors such as the Norwegian group Schibsted (1) and the Swedish Bonnier, which in the same stroke, imported their journalistic practices and ethics.

One weird thing, though. In a booming country like Estonia, you would have thought that a large number of well-educated young people would embrace ja ournalistic carrier. That’s not happening. I was told by the editor-in-chief of Postimeees, that among few dozens of last year’s graduates in communication from Tartu University, only one chose journalism. Amazingly enough, the shortage of journalistic talents could lessen the development of the press a young democracy like Estonia should be entitled to.

(1) Schibsted is the majority shareholder in the Eesti Media Group in Estonia. This group of companies publishes Estonia’s two largest newspapers, Postimees and SL Ohtuleht, as well as several local newspapers, and owns 50% of the Estonian Magasin Group, which publishes a number of magazines. Schibsted controls also two newspapers in Lithuania, LT and 15 minutes.

The booming E-Stonia

This 1.4m people Baltic state is actually one of the most wired countries in the world. Online banking, penetration of news websites like Postimees, uses of cell phone to pay for parking spaces, free wi-fi everywhere, the infrastructure is amazing. This makes also the country vulnerable to attack. In April 2007, when the country decided to distant itself further from Russia, riots triggered by Russian nationalists erupted. In retaliation, Russian hackers launched one of the most severe cyber attack suffered by any sovereign states.
> Wired magazine published an excellent account of the incident
> Speaking of hackers, read this story in ArsTechnica about the strong demand for multilingual hackers

Google and Apple are robbing us!

That’s the cry of anguish heard in the executive suites of cellular carriers, poor things. Why the sorrow?

Nuances removed, it boils down to this:
. ISP (Internet Service Providers) don’t sell content, they bill at a flat rate regardless of what you download, music, e-mail, video. ISP don’t decide which computer you can and cannot connect to the network.
. Cellular carriers charge a different price for voice, SMS, data; they play all sorts of games to sell content. In addition, they lose their customers in an impenetrable jungle of agreements and billing plans. Cellular carriers decide (this is much less true in Europe) which computer, pardon, phone you can connect to their network.
Yes, but why the anguish? Because Google and Apple are two reasons why the future of cell carriers is to become ISP — of the wireless kind. Flat rate, no content games, no control over devices. All this “converging”, to use a fashionable word, towards smaller profits.

A Silicon Valley wag suggests we build seven statues to Steve Jobs: for the orignal Apple II, the Mac, Pixar, coming back and reviving Apple, iPod/iTunes, Apple stores and the last (latest, we hope) one for the iPhone. Steve’s feat here isn’t so much the phone as it is showing how to break the control US carriers still exert on what paying customers can connect to their network and what the phones are allowed to do. For example, in order to maximize profits, Verizon forced Motorola to remove one Bluetooth feature, file transfers.

The result? No way to transfer music from your laptop to your Verizon phone, use the network and pay us. Another (more fortunate) result is Verizon and Moto lose a class action lawsuit.

With the iPhone, Steve wrestles control from the carriers and dictates how things work. And, an unheard feat, he gets a piece of the carrier’s revenue. To be fair, knowing our Steve, dictate is the right verb here. We’ll see in a few days how Apple decides the future of third-party applications on the iPhone. We also remember how tightly Apple controls iTunes content – much to the chagrin of the previous generation of extortionists. In any event, Apple shows how carriers can lose their grip.
Next, Google. They bid for open spectrum, spectrum where you decide what you connect. And they show an operating system for smartphones, Android. The result within a year? Tens of different Android-based phones, hundreds of applications. Smartphones become cheaper and richer at the same time. The result is pressure on carriers to offer flat-rate plans, something they do already, sort of, reluctantly, with dissuasive rates.

Google reveals a striking statistic: the iPhone performs 50 times more search traffic than the next brand, a number initially viewed as a mistake. But no, the numbers are correct and show the iPhone is the first real Internet smartphone. Others, many, are ready to follow. With their help, cell carriers won’t be able to avoid their future: wireless providers of Internet connections.Voice is but one of many types of Internet data. Cellular carriers have no choice but to embrace that fact. Wired ISP already did.

- JLG

Privacy — Europe to fight the printer “secret watermark”

For several years (it seems it started around 2000) most printers and photocopiers sold in the US have marking every page with an almost invisible set of yellow dots. This wartermark can be used by law enforcement to identify the owner of any machine. What could be useful to track down Al-Qaeda can also be used against political dissidents. Last week, a European Union commissioner issued an official statement questioning the legality of such practice. This, he states, is a possible violation of privacy rights guaranteed by the European Union’s Convention of Human Rights and Fundamental Freedoms.
> story in ArsTechnica
> The Electronic Frontier Foundation is leading the campaign against the yellow dots.

Top 30 Most Popular Newspaper Sites

Now let’s have a look at the raw data, i.e. the US newspaper’s performance in January. It remains impressive.
On the table below, the first number is the audience in unique visitors for the month, the second is the year-over-year change in % :

NYTimes.com 20,461 — 45.1%
USATODAY.com 12,314 — 19.4%
Washingtonpost.com 9,902 — 14.6%
Wall Street Journal 6,962 — 81.4%
LA Times 5,715 — 4.7%
Boston.com 5,194 — 23.7%
San Franc Chronicle 4,255 — (-3.9%)
New York Post 4,027 — (-3.5%)
Newsday 3,764 — 59.2%
Chicago Tribune 3,185 — (-15.7%)
(…)
Village Voice 2,686 — 116.4%
The Politico 2,371 — 253.4%
(…)
Int. Herald Tribune 1,789 — (-15.0%)

As for the magazines, in Q4 2007, guess the ratio between the growth of their Web sites traffic and the growth of the internet audience in the US. Magazines grew three times as fast as the US Internet audience.
> details in the Magazines Publishers of America.

Are US newspapers doing so well online ?

Well, US papers are doing good in absolute numbers, confirming a shifting model (not necessarily for the best since an online readers brings a fifth or a tenth of the revenue a print readers does). Now, if we put the Internet in the picture, American newspapers are not doing so well. In 2007, the average Web user loaded 51% more Web pages in 2007 than three years earlier, and spent 23% more time online. The equivalent increases for newspaper Web sites were just 24% and 20%, respectively. So newspapers were losing share of the average reader’s total Web activity says Carl Bialik, the “Numbers Guy” columnist of the Wall Street Journal.
> story here

MainStreet, biz site, too “people”

When it came out, TheStreet.com Network’s new spin-off had a promising baseline : “Where Life and Money Intersect”. Good idea, in theory, to inject tabloid distance into dry business news coverage. So far, something’s not working in MainStreet.com, however: too light, too “people”. Let’s see how much time they need to find the right balance. The site’s mother company is a very clever one. You can judge by yourself.
> MainStreet.com here{

Journalism — Snapshots of a legend

Last Friday, Carl Bernstein (one of the two Watergate heroes, Bob Woodward being the other) gave a speech to an audience of a students at “Sciences Po” (the high-falutin Institut National des Sciences Politiques) in Paris. Bernstein was promoting his new biography of Hillary Clinton. Facing a full amphitheatre, he had a heated exchange with members of the interviewing panel that included a sociologist, supposedly a specialist of American media. The argument centered on the blogosphere: Has it become the agenda-setter in journalism? Unsurprisingly, Bernstein was adamant: Journalism is still ruled by serious media outlets such as the New Yorker. They are the ones which lift the veil on the Abu Ghraib scandal and others public system or political abuses. He’s right. It is very surprising that, in spite of the increasing availability of good journalism on the internet, many (including sociology scholars) remain fascinated by the blogosphere, mistaking noise for relevance. Undigested novelty.

Carl Bernstein also displayed concern for the low competitive metabolism of the current generation of journalists. He kept reminding the young audience of Sciences Po that the best stories are pursued outside of regular business hours. When he covered the legislature, the great stuff came not from the tedious, need-to-be-printed news he was supposed to follow, but from after-hours chitchat with staffers… Then as now, the journalist must rely on his skill and judgment to get, what he calls, “the best obtainable version of the truth”. (For that matter, The New York Times, ever so modest, calls itself “the first draft of History”).

> Watergate era nostalgics can go to this special section on the Washington Post website. The investigative unit of the Post is still led by Bob Woodward.

At the NY Times, job cuts and outsiders pressure

The New York Times caught between Wall Street and Wall Street. On one side of the The Street, the group faces a major offensive of the Harbinger/Firebrand hedge fund which now owns 10.5% of its stock. The attacker is pushing hard for a board upheaval. In response, the Times made some changes on his board by nominating an internet expert (Dawn Lepore, CEO of Drugstore.com and an eBay board member) and a seasoned financier Robert Denham, former CEO of Salomon. But the Times board has no intention of letting Harbinger representatives in.

Activists-led campaigns are on the rise in the United States, and media groups are good targets with their great brand, shifting business model and trailing stocks — the NYT Co’s share is at a 11 years low. (Plus, this comes after Morgan Stanley’s decision to end its two years campaign for change at the NYT by dumping its 7% stake).

On the other side of Wall Street, the Times is facing an increasing competition with the “The Journal”. Rupert Murdoch, its new owner, makes no mystery of hos goal: taking The New York Times’s position. To beat Rupert back, the NYT can’t forever rely on its well-worn hauteur. It must remain on the offensive on both print and digital fronts. This is detailed in Bill Keller’s speech before his troops last week. In it, the editor of the New York Times outlines an impressive list of product-related actions undertaken in the last five years, the integration of the newsroom – with print and web being produced seamlessly – remaining quite an achievement. At the same time, he announces a 100 jobs cut in its 1300 plus staff.

> read Bill Keller’s speech

Actvists investors campaigns are at al time high.
> story in the Wall Street Journal

> a recent Bloomberg story about the Times situation

“Shareholders in general do not have the ability to run a company. They are fickle and irresponsible. They only take on a limited responsibility, but they greedily demand high dividend payments.” Who says that ? Takao Kitabata, the vice-minister of Japan’s powerful Ministry of Economy, Trade and Industry (METI) does.
> He is quoted in a story about Japanese rebuttal of foreign activists investorsin The Economist.

US election — Follow the (money) trail

Remember the legions of staffers crowding electoral campaigns in TV series like The West Wing ? How much could they make ? The online magazine Slate did some research. Clinton’s campaign manager is making the equivalent of $164,000 a year, less that her counterpart in the McCain’s team ($200,000). Full-time speechwriters make $50,000 to $90,000, but it is much better to be a free-lance speechwriters helping the staffers (their fees can go as high as $15,000 per speech). But the real money is in the media and poll consultants who are taking a cut on the space they buy.
> Details in Slate