Yahoo!’s Deal with the Newspaper Industry: Papers should come clean about the data they will now collect/share and our privacy

We are troubled, as are many, about the crisis occurring within the U.S. daily newspaper industry. The lay-offs, cut backs, and other problems besetting such distinguished papers as the Los Angeles Times, San Jose Mercury News, Philadelphia Inquirer, and too many others, requires the attention of policy makers and civic leaders. We believe a principal cause for the current problem are publishers and newspaper holding companies whose first interest is squeezing out maximum revenue returns—for themselves and shareholders. Newspapers can make a reasonable profit and support serious journalism. But when they are seen as just another vehicle designed to generate lots of cash, the defenders of the First Amendment have been replaced by white-collar criminals. It’s time for new federal laws that would enable newspapers to be operated without regard to maximizing shareholder return.


 We also know we are in a key transition period for all media. That’s why we should publicly examine all the major deals shaping our future information landscape—to determine how well they will serve the public interest [Yes. We think that’s more important than just making money from the deals]. So, when William Dean Stapleton, CEO of MediaNewsGroup, says in a joint statement that the new partnership with Yahoo! and 176 newspapers is “transformational”–it requires a closer look. Some of the biggest names in the news business—Belo, Cox, Hearst, Scripps and MediaNews—have now hitched their digital wagons to Yahoo! Papers such as the San Francisco Chronicle, San Jose Mercury News, and Dallas Morning News are now a part of what is called the “most comprehensive advertising network in the online industry.” A major facet of the deal, notes the release, is for the papers to “[U]se Yahoo!’s search monetization functionality on newspapers Web sites, such as Web search, downloads of the Yahoo! toolbar and sponsored search.”

We recognize that newspapers must boldly work to secure new digital revenues. But in doing so, they must be responsible. That includes explaining carefully to every reader and user the kind of personal and other data Yahoo! is now able to collect and financially harvest. Readers/users need to know how Yahoo! and its newspaper partners will “target” them. When Yahoo! acquired rich media ad firm AdInterax last month, they noted that “Rich media technology enables marketers to create more compelling and interactive advertising units online using sight, sound and motion to deliver a message to target consumers. Yahoo! plans to further integrate rich media capabilities into its current leading offerings by developing a self-service model for marketers based on the AdInterax platform. This new rich media solution will enable advertisers and agencies to create and run rich media campaigns coupled with other Yahoo! capabilities including behavioral targeting, geo-targeting, demo-targeting, and dayparting.” The release also noted that “the AdInterax tracking and reporting module tracks traditional metrics including impressions, clicks, and reach and frequency, in addition to other key branding and direct marketing data.”

Newspapers should be protecting the privacy of the public—from both the excesses of government as well as commercial interests. Journalistic-related companies should make deals with online marketers such as Google and Yahoo! which place the privacy interests of readers/users first. We suggest that the editors from the papers now working with Yahoo! commission stories that will explain the deal in terms of what data is being collected and how it will be used. Then, the papers should run editorials calling on Congress to pass meaningful privacy safeguards on electronic data gathering. But—if they did that—wouldn’t it now threaten the very deal they just made? We will be tracking this story.

PS: We also want to see the same privacy-related disclosure from the 50 papers now involved with Google, via a deal announced earlier this month. They include the New York Times and Washington Post.

Digital Robber Barons Say Humbug to the Public Interest: Jerry Yang of Yahoo! and Bill Gates

On Wednesday, Mr. Yang dismissed the need for public policy in the U.S. to address the digital divide. As reported by Communications Daily, Yang told the Tech Net Innovation Summit that `the market will address the digital divide via creation of very inexpensive PCs and cellphones for poor people.’ [Tech Chiefs Slam Visa Rules, Communications Regulation Framework: Digital Divide `Myth.’ Com Daily, 11/16/06. Subscription required]. Yet just six years ago, Yang remarked, “Access to computers and the Internet are becoming increasingly unbalanced, with information haves pulling away from the have-nots.” If Mr. Yang’s solution to ensuring equitable broadband access in the U.S. is cheaper hardware, it doesn’t reflect well on his understanding of the relationship between democratic participation and broadband communications in the digital era. It’s time that the U.S. developed new policies designed to ensure that all low-income Americans have free access to digital communications. We shouldn’t just have one set of folks with full access to broadband over PCs, mobile devices, and Internet Protocol TV’s. Universal service policy in the U.S. should mean that everyone who wants to is online. If not, there will be millions of Americans who won’t be able to participate in the civic life of the country. Mr. Yang did suggest that in a few other countries “ a more proactive set of rules may be necessary” to address such concerns. Perhaps Mr. Yang and Yahoo! aren’t interested in low-income Americans because they don’t have the income to be suitable revenue targets for the company’s well-honed interactive advertising machine.

Bill Gates also makes an appearance this week for another inclusion in the public interest digital policy hall of shame. Gates, speaking at the same summit as Yang, told Charlie Rose that much of U.S. telecommunications regulation “actually holds us back.” He specifically pointed a finger at the 1996 Telecommunications Act rules requiring monopoly providers to open their networks to competitors. As for the U.S. lag in broadband penetration, it was reported that Gates noted that as `the Internet continues to absorb TV and landline voice, broadband penetration will improve.’ [Gates Touches on Broadband Policy, EU Antitrust, IP in China. Com Daily, 11/17/06]. That a boy, Bill. Look the other way with your foundation hat on addressing the health needs of the developing world. Meanwhile, it’s steely-eyed business monopoly hardball when it comes to public interest telecom policy in the EU and U.S.

Finally, the same issue of Communications Daily (sorry to be a one-source Jeffrey today!) tells us that incoming House Commerce Committee chair John Dingell has “hired 2 of his former staffers who were working in the private sector.” Gregg Rothschild will be chief counsel; Dennis Fitzgibbons the chief of staff. These two folks have been working as a Verizon VP of federal government relations and as a director of public policy for DaimlerChrysler, respectively. While we appreciate that the duo wished to return to public service, their current occupation as corporate lobbyists doesn’t bode that well for the public interest.

Online Ad Biz–State of Denial

We’ve been away from this column working on a variety of projects related to educating the public about the dangers lurking in the digital advertising system. Online data collection, profiling and one to one targeted interactive marketing across all platforms–mobile, digital TV and PC–is (sadly) the defining characteristic of our broadband era. Increasingly, such marketing schemes will use purposefully immersive interactive media content designed to engage all of us to embrace a variety of marketer-desired behaviors (the online ad industry touts its ability to use this technology to “convert” us. But it’s about buying and branding–not anything ethical or spiritual). CDD and US PIRG filed a complaint at the FTC last week urging the agency to launch an investigation and issue needed consumer safeguards. Our privacy and more is at risk. (Our complaint, which is a good overview of what’s going on, was also intended to provide the otherwise reluctant regulators at the FTC a little reality counter-programming at their Tech-ade event). The interactive ad system that has emerged for digital marketing in the U.S. is indefensible, no matter how its supporters rationalize it. In addition to working with the FTC, we expect that the new Congress will take the issue up next year. Meanwhile, we urge our readers to look at the complaint–and then come back to this column for updates.

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NYT’s on Media Cross-Ownership: Too Much Frenzy and Not Enough Reporting and Reflection

Today’s business section column [reg. required] on why concerns over newspaper-broadcast ownership safeguards are “yesterday’s news,” illustrates how poorly informed too many media beat reporters are about their own industry. First, writer Richard Siklos fails to acknowledge that his own employer—The Times Co.—lobbied the FCC to sweep away such rules during the 2001-3 proceeding. Reporters need to do a better of digging to learn about what their own employers are doing—both politically and in terms of market investments. In addition, Siklos, like so many others, fails to address how the Internet, due to recent FCC decisions, may not be able to provide a meaningfully diverse array of information sources in the near future. The elimination of network neutrality for U.S. broadband permits a very few—including cable, telephone, and broadcast TV stations—to send their content on so-called “fast lanes” [and for the 98% of the public, captive customers at that]. Siklos argues that “… the most important reason that cross-ownership rules no longer make sense is this: the distinctions between print and television are starting to blur in a digital world. Video on the Web is the biggest thing since turkey and gravy.” But today’s wide-open broadband frontier is likely to be tamed by the growing power of the Internet monopolies, now freed from operating their networks under a non-discrimination requirement [broadcast TV stations are already using their legislatively-procured “retransmission consent” to obtain favorable digital transport and promotion. Such market power is enhanced by the Congressional digital TV spectrum giveaway—which the Times Co. stations also received. Digital “retrans consent” has made owning a station a strategic investment during this transition period in the broadband market. Such a selling point is no doubt part of what the Times Co. is now making as it sells its stations.]

Siklos also fails to meaningfully assess how the business models of so many publicly traded newspapers have helped bring the industry to its current crisis point. Tribune tried to squeeze every dime out of its operations—hurting journalism as a result. Mr. Siklos should be interviewing colleagues who work at the LA Times and other Trib papers. Or get embedded in a paper run by Dean Singleton. We also wish Mr. Siklos had spent more time thinking about the unique journalistic culture of a newspaper—and why maintaining its editorial independence from TV/show-biz focused businesses is important to protect.

Diversity of media ownership is an serious topic—not one to be treated so flippantly as Mr. Siklos does for his largely business readers. It’s about the First Amendment in the digital era; open broadband networks; local and national news operations with the resources and commitment to do a serious job covering private and public power; and ownership by people now largely left out—namely everybody else other than white men. Cross-ownership is an important part of the “check and balances” the U.S. has relied on to ensure the electronic media can serve the public interest. Granted, things are changing—but much is not in the short term. This is a story that Mr. Siklos should return to soon—but do more careful reporting. Whether we have a media system capable of doing the investigative reporting necessary so it can stand up to a future Administration wanting to go to war without real documentation is part of what’s at stake.

Political Games Advertisers Play: A GOP Protection Racket

The nation’s biggest advertisers and marketers have developed an effective political operation in Washington. Madison Avenue and its clients have been able to ward off calls for policies, for example, that would protect our privacy. How the Association of National Advertisers (ANA) and the American Association of Advertising Agencies (AAAA) conduct its lobbying efforts have largely been off the radar screen. After all, the press cannot examine itself (since the ad lobby is ultimately tied to the fate and fortunes of broadcasting, cable, newspaper, and much of online).

So we thought it was worth pointing out a telling comment in a recent Advertising Age story written by its indefatigable and enterprising D.C. bureau chief Ira Teinowitz. In his story titled “What Democratic Control May Mean for Marketers” (Oct. 16, 2006), he quotes AAAA VP Dick O’Brien. A change in control, said O’Brien, would mean that “[T]he sort of protection we have had on the House Commerce Committee will disappear.”

While not a bombshell, such admissions help tell the story of how all too often, Commerce chair Joe Barton and Telecom subcommittee chair Fred Upton have worked to help the big buck special interest agenda (think Bells, cable and no network neutrality for broadband). While we don’t believe the Democrats are Saints, at least once in a while they will yell and scream. The Ad industry, in our opinion, needs to lose its protection racket defense.

Sumner Redstone: Media Mogul Hypocrite

Yesterday, Sumner Redstone gave a speech where he reportedly blasted the `climate of fear’ and self-censorship created by the federal focus on indecent TV content. At a “freedom of speech” event organized by The Media Institute, [which is really a lobbying group working on behalf of the media conglomerates] Redstone said that “Let us rise above the temptation to censor or fine or regulate the most basic and primary of our constitutional rights. Not only because it is an improper role for government, but also because it is not what Americans want from their government.”

But Redstone really isn’t a supporter of free speech. Otherwise, why would his MTV Networks just announce a deal to distribute video content over the Chinese search engine Baidu? Baidu itself engages in self-censorship to appease the Chinese government. We assume part of Redstone’s China deal includes a provision that any content deemed objectionable to the government will be quickly trashed.

We dislike the atmosphere of pressure about content coming from both parties at the FCC and many in Congress. But we don’t believe in saying we stand up for freedom of speech in one country, but turn a blind (but profitable) eye elsewhere.

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Stupid Ads Running at [Non-commercial!] PBS: “Ancient Tea that Dissolves Belly Fat”

Hey, folks at Nova—or better yet Frontline. Better launch an investigation into the health claims originating from PBS. One of the site’s “sponsored” ads asks: “Hate Your Body Fat? Drop 1 Jean Size Every 7 Days. The Tea that Dissolves Belly Fat!”

AncientOkinawanTea’s site, which one is transported to from PBS.org, claims that it “Boosts Energy and Mental Well-Being.” “Reduces Cancer Risk.” “Strengthens Your Immune System.” “Each cup of Ancient Okinawan Slimming Tea melts away stubborn bodyfat, reduces wrinkles, boosts brain power and enhances your health. Scientific Research proves it!….Not available in stores. Hurry, going fast! Normally $95.99. Today Only $37.”

The tea, so it is claimed, can help one shrink “8 Jean Sizes in 8 Weeks.” We think someone has been putting it in the water cooler at PBS HQ. But it’s their brains that have shrunk—so they cannot imagine a PBS digital environment without ads.

AT&T’s “30-Month” Net Neutrality Merger Trade-in Offer: What a Joke!

So desperate to become a digital colossus once it swallows BellSouth, AT&T offered the dissident Democrats on the FCC a network neutrality “concession” today. Unbelievably, AT&T offered to operate its broadband Internet system as an open and democratic network—but only for 30 months! The offer illustrates how unethical and cynical the top executives are at Ma(d) Bell. `Yes, U.S. public,’ they say. `We will give you a democratic Internet for a brief moment, if you let us grow as an even larger unaccountable monopoly.’ AT&T’s offer underscores why permanent network neutrality safeguards are worth fighting for. The very companies who will provide the vast majority of broadband service, such as AT&T, really don’t want the public to have it.

AT&T is trying to sell to FCC Commissioners Copps and Adelstein the digital equivalent of the Brooklyn Bridge. They should say: “sorry, wrong number.”

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What Google-YouTube Means for the Public Interest

Here’s a new piece I wrote for The Nation magazine online that summarizes my concerns about what is happening with our digital media system–and what we should do about it.

http://www.thenation.com/doc/20061030/chester

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Inappropriate PBS Ad of the Week–about the Pope and the Devil!

PBS, abandon all sense of perspective when ye enter into commercial digital marketing contracts. Here’s a ad on the PBS.org site alongside its promotion of news and public affairs programming. “Next Pope is John Paul II Impersonated. Bible Prophecy Shows He Will be Last Pope. Learn More www.worldslastchance.com.” By clicking, you go to: [http://www.worldslastchance.com/index.php?p=next_and_last_pope.php]

There you can learn about the “world’s last chance” and that a “New World Order is About to Start.” Then a headline declares that: “The Bible Reveals next and last Pope will be a Devil impersonating John Paul II.”

No fooling! I think the fundraising drive has depleted the oxygen at PBS HQ. They better meditate now on the foolish digital ad path they trod.

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