Links 11/16/09 « naked capitalism

Monday, November 16, 2009

Links 11/16/09

Australia apologises to abused child migrants from Britain Times Online

Indian elephants to go from zoos BBC

The return of managerial bone-headedness Lucy Kellaway, Financial Times

Busted! The New York Times Verifies Lawmaker’s Speeches Written by Lobbyists Economic Populist

The Coming Private Equity Default Crisis Joshua Brown (hat tip Crocodile Chuck)

A Franco-German marriage of convenience Wolfgang Munchau, Financial Times (hat tip reader Swedish Lex)

Drug Makers Raise Prices in Face of Health Care Reform New York Times. This verges on “dog bites man.”

About Half in U.S. Would Pay for Online News, Study Finds New York Times

Geithner Bond Wise Men Bury Warning as Options Rise Bloomberg

Japanese GDP… 4.8% Growth, but Ugly? EconomPic Data

The Worst is yet to Come: Unemployed Americans Should Hunker Down for More Job Losses Nouriel Roubini

Antidote du jour:

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11 Comments:

dearieme says:

November 16, 2009 at 8:04 am

Sticks are very good at fetching dogs.

rental_unit says:

November 16, 2009 at 10:04 am

A paper that attempted to firewall its content says that half of Americans are willing to pay for what they couldn’t be bothered to pay for in the past. Or has the NYT forgotten about Times Select? (started in fall 2005, died in 2007, with the NYT refunding the money of those who paid).

And some people still wonder why the American media is dying.

LeeAnne says:

November 16, 2009 at 10:58 am

Yeah competition! I’m looking forward to a new dawn in journalism with a revival of local daily papers (the New York Times hasn’t been local for a very long time) for my morning coffee and an affordable online source for all major papers and international sources online on a new and profitable model that will be profitable enough to pay experienced journalists the way we pay corporate executives.

A world where journalists and journalism can thrive with a blend of today’s models and new online choices like writing independently and charging online, syndication, or work as employees of traditional news outlets.

When enough papers follow Murdoch’s lead we’ll have to pay online for news. A critical mass of paying readers will bring prices down and make it very affordable. Already, paying for the Financial Times online is a temptation (I’m not there yet) –there’s a big incentive to pay online for a really good paper. When the price comes down it will be an even bigger incentive. As a anew and profitable system evolves there should be many pricing and journalist branding models to choose from.

Much as I’m no fan of Murdoch’s if we are to have a revival of journalism, sorely needed in my opinion, TPTB are going to have to come up with a profitable online model. When other major newspapers follow the Financial Times and Murdoch’s lead, ‘free’ journalism online will end, small local papers can charge higher prices and blossom (my dream), and online prices should head down.

i on the ball patriot says:

November 16, 2009 at 6:35 pm

Ah yes, the dog eat dog in decoy New York Slimes, with a study by the Boston Consulting Group’:

Excerpt;

“Back in the 60s, Bruce Henderson, chafing at Arthur D. Little, re-conceived competitive strategy. He founded the Boston Consulting Group, who in the 70s introduced the world to concepts like the experience curve, the Doom Loop, and the barnyard strategy matrix.

Together with Michael Porter, they redefined strategy from a vague, military idea, to a disciplined, quantitative analysis based on a Hobbesian view of the business world: a State of Nature as Competition. Competitors lurked everywhere–including masquerading as your suppliers and your customers. Henceforth, all talk of “strategy” would implicitly have “competitive” as a leading adjective.

It is hard to describe today the impact this new ideology had on the business community. Suddenly the world made sense—everything was about competition, and everything was quantitative. It was about winning, and the winner was the one who ran the numbers best. Peter Drucker was so 10 minutes ago–now, if you couldn’t measure it, you couldn’t manage it.”

More here;

http://trustedadvisor.com/trustmatters/599/The-Boston-Consulting-Group-Caused-the-Recession

FT is a system tool. Before you give them a penny to propagandize you search blogs for your news. Don’t read anything that you have to sign up for, your head will be clearer and great happiness will be yours.

Deception is the strongest political force on the planet.

DR says:

November 16, 2009 at 12:38 pm

http://www.bloomberg.com/apps/news?pid=20601087&sid=akh1o3HutlLc&pos=7

“KKR Puts Higher Value on Dollar General Than Walmart ”

Good story on how PE funds are trying to dump overpriced LBOs into the IPO market.

..
Dollar General, which had $4.1 billion in long-term borrowings at the end of July, used about 39 percent of its operating income for interest payments, data compiled by Bloomberg show. That’s more than 10 times the median amount that interest expenses trimmed from operating income at 10 competing retailers.
…

Dollar General paid a dividend of $239 million to its owners in September, an amount exceeding the company’s operating income in its fiscal second quarter. ..Ah to be a capitalist!

Hugh says:

November 16, 2009 at 3:49 pm

I hate to keep beating up on Roubini but when will he stop leading from the back of the pack? We know unemployment rates are high, that they are going higher, that they are are a lagging indicator and hence there will be no turn around in the foreseeable future. But he references this to our most recent recessions. What is happening now is simply not like them. This recession is different.

And fine we need more stimulus but Roubini seems just to be mailing it in with “another round of labor-intensive, shovel-ready infrastructure projects”. States are in a world of hurt, are excellent vehicles to disburse funds, and we get a really big bang for the buck on things like education. Can we please have a little more depth of thought from him?

And then there is this: “As a result of these terribly weak labor markets, we can expect weak recovery of consumption and economic growth.” Roubini can’t even bring himself to say absent major new stimulus, we are headed into Japanification or further down.

Nostradoofus says:

November 16, 2009 at 5:30 pm

RE: Paying for online news

Old saying among the wiser Silicon Valley VCs: “Don’t ask if they WOULD pay for it — ask them to pay for it.”

Hypothetical surveys wildly overestimate willingness to pay. The true crucible is actual subscriptions, of which most online newspapers have had few or none for over a decade. With good reason.

As the industry is structured today, free Web news is a microeconomic inevitability. Absent distribution control, price falls to marginal cost. Marginal cost of Web news is about zero, so that’s where prices are.

The few sites that now thrive (WSJ, Bloomberg, Consumer Reports, Associated Press, etc.) all own lots of exclusive content that a particular audience really wants. I.e., distribution control.

By contrast, papers that relied upon geography and fixed plant for distribution control are defenseless online, and many still don’t seem to grasp why.

It’s almost unbelievable that the NY Times is still running articles on hypothetical business models, a dozen years after the matter was settled. Barn door open, horse on next continent.

Michael says:

November 16, 2009 at 6:51 pm

Haha, half will pay for online news, oh really? Do half of Americans even read online news now? (I admit I haven’t read the story, but I try not to read NYT much on principle).

The problem is, daily news is basically worthless – just a list of facts, in one ear, out the other. And it’s becoming even less relevant as every paper simply regurgitates AP/AFP/Reuters, etc. Even major world events never capture the headlines for more than a few days (unless they’re in America, where they might last a few more) and then they’re lost from view to be replaced by something else. It’s just entertainment to get bums on seats, for a few advertising dollars to keep the circus running for another day.

Opinion pieces on the other hand are actually worth more to the writer and paper than they are to the readership. Again, for readers it’s really just (albeit often thoughtful) entertainment. But for the papers it was always about directing and controlling `the debate’ of the current issues of the day. i.e. politics and power. Or selling books. How they expect people to pay to be preached to is idiocy (oh hang on …).

The web has shown people like to tell their stories (no matter how banal and pointless they might be). However that runs the full gamut from angsty teens to experienced professionals in every walk of life. We can all get as much opinion as we can handle from people often (far) more qualified than the journalists providing it in news papers. And it doesn’t have to be vetted by someone who pays the bills or cannot offend advertisers. Sure there is issues of quality and astro-turfing and whatnot, but quality can be checked by another source and astro-turfers eventually get exposed – and a little critical thinking goes a long way.

Investigative journalism has been mostly dead for newspapers for years. It doesn’t need the web to help it. Here in Australia we only have the 2 government funded/subsidised broadcasters who even do any of it anymore (unless you count picking on single mums, dole bludgers and ‘dodgy builders’ as journalism). And from what I can see, in the US it’s left to PBS for broadcasting and magazines or books for print.

Peripheral Visionary says:

November 17, 2009 at 11:39 am

Re: Paying for News.

I do not think the situation for the news industry is entirely grim. I would point to the recent evolution of the music industry: even five years ago, it was being declared dead, a casualty of technology, never to recover from the loss of CD sales. And now, the music industry is in good shape, with iTunes having revolutionized the distribution of content, successfully monetizing digital distribution and restoring revenues for the industry.

I think news can go the same direction, but it will require a similar revolution, not the incremental steps we have seen. The brilliance of iTunes was that it recognized what people really wanted, and would be willing to pay for–convenience. iTunes was more convenient, by far, then just about every other source of music, including, most importantly, the pirated sources (which have consistently been infested with malware and other problems.)

What the news industry needs to do is determine what consumers want, and then deliver it in an easy, one-click format. And I would submit that what consumers want–or rather, what I want –is aggregation and simplification. The simple problem is that there is way, way too much information out there. I am sick and tired of having to dig through it all every day, and no single aggregation site gets the stories I want, and in the quantities I want (five to ten critically relevant economic and political stories–and a couple of local stories from my current region–and a couple of local stories from where I used to live–and my choice of comic strips.)

What the news industry needs to offer is an intelligent news aggregation and simplification service, that brings together an extremely broad range of services, to provide just the stories that the individual consumer is most likely to be interested in. That, I think people will pay for. Newspapers used to do that, in a sense, but it was the editor’s choice of what he or she thought the audience as a whole would be interested in. What’s needed now is to use existing technology to tailor that to the individual.

Would I pay for the NYT online? The WSJ online? The FT? My hometown paper? The WaPo? No. My favorite bloggers? No. (Sorry Yves!) “Pearls Before Swine”? “Lio”? Depends on price. Select items from each of those in topics I am interested in, on one simple, easy to read page? Definitely yes.

Chris says:

November 17, 2009 at 11:55 pm

Re: paying for news

I don’t think the results are too surprising. Americans get lots of free stuff online because they have the deepest pockets in the world, and advertisers are willing to make the most concessions in order to reach them. To give one example, big events like the Super Bowl are always free to air in the USA, but in many other countries (especially smaller ones) they would typically on premium channels or pay per view.

The corollary is that if Americans stop spending, all that free stuff will eventually start to disappear.

Jack Parsons says:

November 18, 2009 at 2:03 am

About technicolor urine: I think someone went to Burning Man.

http://www.erowid.org/culture/burningman/burningman_faq.shtml#7-w

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