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NEW(S) MEDIA FCC studies bring mixed results on cross-ownership.

As with all news out of Washington, some of it is good and some of it is bad.

Earlier this month the Federal Communications Commission (FCC) delivered 12 studies on the "current media marketplace," which examine a variety of factors, including how consumers use radio, television, newspapers and the Internet, as well has how ownership of those companies affects editorial content as well as advertising pricing.

These studies were commissioned by the FCC's Media Ownership Working Group, which was established to help gather information for the third biennial review of broadcast ownership rules, mandated by the 1996 Telecommunications Act. Of the 12 "empirical studies" that are to provide fodder for public comments, only four deal directly with newspapers.

The first study addressed media ownership in local markets. The FCC staff randomly chose 10 Aribtron radio markets nationwide and looked at ownership of commercial and non-commercial TV and radio stations, cable systems and daily newspapers in 1960, 1980 and 2000.

The results were staggering: the number of media outlets grew an average of almost 200 percent in all 10 markets and media ownership grew an average of 140 percent. Ownership did decline in the New York market, and in Kansas City remained the same between 1980-2000, but otherwise the number of outlets and owners grew "tremendously."

The second study reviewed the coverage of the 2000 presidential campaign in 10 markets where papers and TV stations were owned by the same company, attempting to answer the question: "To what extent do commonly owned newspapers and television stations in a community speak with a single voice about important political matters?"

Conducted by David Pritchard, chairman of the department of journalism and mass communications at the University of Wisconsin at Milwaukee, this study coded all editorial items in the newspaper and on the late night TV news show about the campaign: each item was determined to have a "slant" favorable to one candidate or another, regardless of whether the journalism would be considered objective or opinion. Slant didn't necessarily indicate bias, it was merely a way of identifying the item.

The slant was coded with a numeric value and the values were compared: in five of the communities it appeared that the slant of the paper was "noticeably" different from the slant of the TV station; conversely, in the other five communities "there was no meaningful difference."

The third report, written by Joel Waldfogel of The Wharton School at the University of Pennsylvania, asks whether consumers substitute one medium for another; in other words, do people who stop reading newspapers start listening to radio (or watch more TV news or surf news on the Internet more)?

The answer here too is somewhat muddy: while Waldfogel says that "certain media appear to compete with each other for consumers' attention," he also says, "If substitution were complete, then the decline of local daily newspapers would be offset by increased use of other media," which isn't substantiated by the results.

What is clear, though, is that consumers feel free to substitute pretty much anything for a daily newspaper: weekly papers, broadcast TV, cable TV and the Internet.

The last report looks at whether retailers who use a mix of radio, TV and daily newspaper advertising substitute one media for another. The study looked at 45 markets and determined that while there is a slight tendency to substitute radio ads for newspaper ads, there's no tendency to substitute TV ads for newspaper ads.

These reports will be a mixed blessing for the newspaper business as it goes about trying to abolish the newspaper-broadcast cross-ownership rules (it should be noted here that the industry does not speak as one voice on this topic).

While newspapers can say that there are (generally) more editorial voices, that common ownership doesn't imply a common editorial voice and that both consumers and retailers feel free to substitute one media for another -- all good arguments for abolishing the newspaper-broadcast cross-ownership rule -- they are also arguments that might undermine the Newspaper Preservation Act (NPA) of 1970, which allows for joint operating agreements such as those in Denver, Salt Lake City and Seattle (this is an idea originally put forth by Bill Esler in Graphic Communications World earlier this month).

Though the FCC and the Justice Department -- trustee of the NPA -- aren't well known for cooperating and it's doubtful that the administration would be breaking up businesses, it's clear that the newspaper business is going to have to say on one hand we agree with the FCC reports, but on the other hand we don't.

-- dmc
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Geographic Code:1USA
Date:Oct 21, 2002
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