From AJR, January/February 2000 issue
The Emergence of Convergence
The Web drives alliances like the one between the Washington Post Co.and NBC.
By John Morton
John Morton (email@example.com), a former newspaper reporter, is president of a consulting firm that analyzes newspapers and other media properties.
TO SOME IT'S A convergence of shared interests, to others it opens the door to rampant conflicts of interest. But to all, I suspect, it is viewed as inevitable.
The subject is alliances between news operations owned by separate and often competing entities. The driving force behind the alliances, as in so many other aspects of the media business, is the Internet.
Based on recent agreements, the Washington Post Co.'s Washington Post and Newsweek will share news stories with NBC News and MSNBC.com. The New York Times and TheStreet.com, a provider of financial news on the Internet, have created a joint newsroom intended to expand the financial news offered by both organizations.
An earlier sharing agreement matched the Wall Street Journal with CNBC, the business channel of NBC. TheStreet.com, in addition to its link with the New York Times, also has alliances with Fox News and numerous new-media companies like Yahoo! and America Online.
The chief goal of the alliances for newspapers is to expand their presence and brand names online at a time when the Internet poses a potential, though as yet unrealized, threat to core newspaper businesses. There will be the added benefit of a larger selection of news reports and video clips. Leonard Downie Jr., executive editor of the Washington Post, said in a Post story he could envision using a bylined story by an NBC reporter about an event that had not been covered by the Post.
For the nonnewspaper partners, the attraction is access to the papers' large and superior newsgathering forces and the cachet of being associated with nationally known papers.
This road to convergence is potholed with potential conflicts of interest, similar to those that have already raised questions about Disney's ownership of ABC and the network's coverage of Walt Disney World.
NBC is owned by General Electric, the fifth largest corporation in the nation and a major defense contractor, and NBC's partner in MSNBC.com is the controversial Microsoft Corp. Major investors in TheStreet.com are themselves corporations often the subject of extensive news coverage.
Welcome to modern corporate America.
Convergence came long ago to nonmedia industries. U.S. auto manufacturers, for example, regularly sell under their own names cars manufactured by Japanese competitors. In some instances, the U.S. firms own substantial chunks of the Japanese companies. So it should be no surprise that the same thing has invaded the media.
Sadly gone are the days when newspapers existed as unentangled entities, able to deny even the appearance of a conflict of interest (never mind how feebly some newspapers exerted their independence). Today some newspaper companies own all or parts of professional sports teams their news departments cover and have interests in convention centers and a host of other enterprises that conceivably could become subjects of news coverage.
How much these arrangements will hurt newspapers' credibility will depend largely on how professionally editors perform their duties. The appearance of conflicts will never go away, but the impact could be lessened if newspapers are straightforward about their entanglements when appropriate.
The real damage, I suspect, will be hard to detect. For example, I do not own stocks in publicly traded newspaper companies. This not only prevents attacks on my independence in commenting on specific companies but, most importantly, also eliminates the possibility that I might be unconsciously biased one way or another. That is the real danger‹news stories not covered or downplayed because of unconscious effects on news judgment. This also extends to the television side of these new alliances. If a scandal erupts over some part of General Electric's vast operations, can we expect NBC or MSNBC.com to invite a Washington Post reporter on air to reveal all? I hope we will all be pleasantly surprised.
Having said this, it is clear journalists in all walks of the media business will have to get used to the potentially damaging effects of convergence. Business in this country, and this most definitely includes the newspaper industry, is changing dramatically.
We are seeing concentrations of ownership‹in telecommunications, cable television, radio, television, oil production, banking and a host of other industries‹that would have been unthinkable 20 years ago because of antitrust concerns. The rules have been changed by the globalization of business and, especially for media companies, the rise of the Internet.
As uncomfortable as it might be for some, newspapers have no choice but to plunge in.