Ownership

Over the past generation, journalism has been slowly swallowed. The ascendant media companies of our era don’t think of themselves as heirs to a great ink-stained tradition. Some like to compare themselves to technology firms. This redefinition isn’t just a bit of fashionable branding. As Silicon Valley has infiltrated the profession, journalism has come to unhealthily depend on the big tech companies, which now supply journalism with an enormous percentage of its audience—and, therefore, a big chunk of its revenue.

Dependence generates desperation—a mad, shameless chase to gain clicks through Facebook, a relentless effort to game Google’s algorithms. It leads media outlets to sign terrible deals that look like self-preserving necessities: granting Facebook the right to sell their advertising, or giving Google permission to publish articles directly on its fast-loading server. In the end, such arrangements simply allow Facebook and Google to hold these companies ever tighter.

Opposition is coalescing against the $3.9 billion Sinclair-Tribune merger. Among the critics are smaller conservative media outlets. Conservative fears: Sinclair is famously right-leaning and some have speculated it could launch a Fox News competitor as its power grows. One America News Network President Charles Herring expressed concerns Aug 7 that a post-merger company could use its market power to give that kind of project a leg up over smaller competitors. Newsmax, another outlet on the right, has also expressed reservations about the merger.

Why it matters: Pushback against Sinclair's growing dominance is coming in all forms, shapes and sizes — even from its ideological allies. Last week, Sinclair stock slipped following reports that its biggest rival, 21st Century Fox, may pull Fox affiliate stations from the broadcasting behemoth. The Murdoch-controlled company, which also considered buying Tribune stations, is concerned that a post-merger Sinclair would have increased leverage in negotiations for carrying the programming.

Sinclair Broadcast Group, the nation’s largest television broadcaster, is set to expand its reach into nearly three-quarters of American households, a prospect that has elicited concerns both commercial and ideological. Known for pushing “must-run” segments of reliably conservative political commentary, Sinclair’s expansion has raised hackles among media watchdog groups. Executives from smaller conservative outlets like One America News Network to industry groups like the American Cable Association are urging the Federal Communications Commission to reject the merger, claiming that such consolidation would result in less competition and higher prices for consumers. Given FCC Chairman Ajit Pai’s previous statements, however, resistance to the deal appears futile.

The Walt Disney Co secretly collects personal information on some of their youngest customers and shares that data illegally with advertisers without parental consent, according to a federal lawsuit filed late last week in California. The class-action suit targets Disney and three other software companies — Upsight, Unity and Kochava — alleging that the mobile apps they built together violate the law by gathering insights about app users across the Internet, including those under the age of 13, in ways that facilitate “commercial exploitation.”

The plaintiffs argue that Disney and its partners violated COPPA, the Children’s Online Privacy Protection Act, a federal law designed to protect the privacy of children on the Web. The lawsuit, filed in U.S. District Court for the District of Northern California, seeks an injunction barring the companies from collecting and disclosing the data without parental consent, as well as punitive damages and legal fees. The lawsuit alleges that Disney allowed the software companies to embed trackers in apps such as “Disney Princess Palace Pets” and “Where’s My Water? 2.” Once installed, tracking software can then “exfiltrate that information off the smart device for advertising and other commercial purposes,” according to the suit. Disney should not be using those software development companies, said Jeffrey Chester, the executive director of the Center for Digital Democracy. “These are heavy-duty technologies, industrial-strength data and analytic companies whose role is to track and monetize individuals,” Chester said. “These should not be in little children’s apps.”

Sprint’s resumed talks about a potential merger with T-Mobile, being held at the same time as discussions with cable companies, shows the lengths billionaire Masayoshi Son is taking to build scale for a wireless carrier facing increasing competition in the US. The two mobile operators restarted discussions after Sprint’s exclusive negotiating period with Comcast and Charter Communications expired at the end of July, apparently. Son, who leads Sprint’s largest shareholder SoftBank Group Corp., is pursuing all options for industry consolidation as he continues to weigh a potential offer for Charter. SoftBank has been considering making a formal takeover bid for the cable company and combining it with Sprint.

A diverse group of associations, including the American Cable Association, as well as media consolidation opponents and conservative news outlets, are getting together to formally oppose the merger of Sinclair and Tribune, which would result in the nation's largest broadcast TV group. That group includes a big critic of conservative media and a conservative media outlet, united in their strong opposition to the deal. Initial comments on the merger were due Aug 7.

Joining ACA president Matt Polka on a conference call to announce their Federal Communications Comission filings in opposition to the deal were former FCC chairman and Common Cause special adviser Michael Copps, One America News Network president Charles Herring, Computer & Communications Industry Association president Ed Black and Competitive Carriers Association SVP Tim Donovan. Copps said the deal would eviscerate local TV news and help inflict "irreparable damage." He called Sinclair the "most dangerous company most Americans have never heard of." He said the company wants to skirt ownership regulations with more "joint evasion agreements." He said the company comes with an ideology more focused on conservative points of view than "any sense of balance of deep-dive journalism."

[Michael Copps is a regular contribution to the Benton Foundation's Digital Beat blog]

Sinclair Broadcast Group may have federal regulators on its side about a possible mega TV-station-group merger. But its business partners -- and competitors -- may give it a harder time. Cue 21st Century Fox. The Fox Broadcasting Network reportedly wants to change its affiliate associations with 26 Sinclair TV stations -- and strike a deal with a smaller TV station group, ION Media Networks.

Why? Insiders say a potential $3.9 billion merger between Sinclair and Tribune Media could be competitive trouble for Fox-owned TV stations -- as well as other Fox affiliates where Sinclair has other network affiliate deals. Is Fox short-sighted? Fox -- like all TV networks -- depends on the steady local TV promotion, which Sinclair provides. Dealing with ION could just be a negotiation ploy with Sinclair, perhaps to extract a far better Fox affiliation agreement. But if that doesn’t work, Fox might do what Sinclair is doing: Buy more TV stations. Perhaps ION stations.

AT&T, gearing up to take charge of Time Warner, reportedly plans to dump the media company’s corporate name. It’s not the first time a major brand has gone away as the result of a merger. Amoco disappeared when BP acquired the company, as did US Airways when the company merged with American Airlines. MCI took a hike when the telecommunication company was purchased by Verizon.

While the Time Warner brand likely has a stronger positioning in the entertainment and branded-content space than the AT&T brand, which is still seen as a communications brand, consolidating under a single brand makes some sense, says Ted Marzilli, CEO of YouGov’s BrandIndex. “It is more clear to consumers (and less confusing) that the range of services now provided is coming from a single company,” Marzilli says. “From a business perspective, it is less expensive to maintain a single brand. And it also a signal to all employees that AT&T is now running the show.”

In the US, roughly nine-in-ten adults (93%) ever get news online (either via mobile or desktop), and the online space has become a host for the digital homes of both legacy news outlets and new, “born on the web” news outlets. Digital advertising revenue across all digital entities (beyond just news) continues to grow, with technology companies playing a large role in the flow of both news and revenue.

Digital-native news outlets are also adopting other outreach and engagement methods. Fully 97% of these outlets offer newsletters, and 92% have an official presence on Apple News. Three-quarters, meanwhile, release podcasts and 61% allow comments on their articles. These outlets are also highly likely to use social media as part of their outreach. Nearly all have official pages or accounts on Facebook (100%), Twitter (100%), YouTube (97%) and Instagram (92%). Far fewer (25%) have an official channel or account on Snapchat.

On the whole, the news offerings of US public broadcasters have been marked by relative financial stability and, in the past year, audience growth. The top 20 NPR-affiliated public radio stations (by listenership) had on average a total weekly listenership of about 10 million in 2016, up from about 9 million in 2015. (This includes listeners for NPR programming as well as original or other syndicated content aired on these stations.)

NPR’s digital platforms continue to be an important part of its reach. Both the NPR News app, which offers livestreams from individual stations and digital content, and the newer NPR One app, which offers a stream of individual shows and podcasts, have shown steady growth across devices in the average number of total completed sessions each month. The financial picture for news outlets in public broadcasting appears to be strong both locally and nationally, even showing some improvement year over year. At the national level, NPR increased its total operating revenue in 2016 to $213 million, up 9% from 2015 levels. PRI saw gains as well, rising 26% to about $22 million in total revenue for 2016. APM’s total revenue, on the other hand, went down 6% year over year, accounting for $126 million in 2016. At the local public radio level, an analysis of the public filings provided by the 125 largest news-oriented licensees (organizations that operate local public radio stations) shows overall steady revenue. Between 2014 and 2015 – the last year for which reliable data are available – total revenue for this group remained relatively flat at $807 million.