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The coverup was the real problem in the NoTW scandal
(Larry Kramer is the founder of MarketWatch, which was sold to Dow Jones, a division of News Corp.)
The rapid disintegration of News Corp (NSDQ: NWS) in London because of the News of the World scandal highlights a growing reality in the media world today: Integrity and reputation mean more to news organizations today than ever before.
But in the digital world, it costs almost nothing to LOOK like a serious media player. You can build a site that looks exactly like NYTimes.com (NYSE: NYT) or HuffingtonPost in a matter of hours at little cost. Putting up content or aggregating content from reputable sources is cheap. It became harder to distinguish those companies with journalist credibility from those with other agendas.
What that meant is that the true news organizations had to rely even more heavily on the reputation of their brands to carry the day and separate them from the huge cadre of pretenders. It is now the burden and responsibility of the news media business to establish the difference between credible news organizations and everyone else with information to share.
So when we discredit ourselves the way News of The World did, it impacts the entire business, starting with companies closest to the offending party, like those in the same corporate structure. It also opens the doors to others who would fill the gap and who can get into position to do so in a matter of hours as opposed to months or years .
While you might not consider News of The World in the same category as the New York Times, there are still some journalistic standards that must be upheld across the board. Like the National Enquirer in the US, the News of The World does cover government officials and serious targets, and like the National Enquirer, if they are going to take on those serious targets, it has to adhere to the laws in place to protect subjects and media alike. The National Enquirer, for its part, has made great strides toward establishing its coverage as very serious.
Making mistakes doesn’t have to destroy your credibility, as long as you live up to the mistakes and move quickly to get beyond them by reestablishing your credibility day after day. We have to earn it back, but we are fortunate, in the news business, to be given the opportunity to do so quickly because we are always working on new stories and breaking news.
Looking back at many of the biggest mistakes made in the industry one can see that the businesses that survived them moved quickly by owning up to the mistake and putting in place procedures to prevent what happened from happening again.
In the media, as in politics and government, the real problems tend to surface with the coverup, not the original crime.
In the celebrated 1988 Janet Cooke case – where a young Washington Post (NYSE: WPO) reporter won the Pulitzer Prize for a series of stories centered on an 8-year-old drug user in the District of Columbia, only to have to surrender the prize after it was disclosed that the stories and subjects were largely fabricated – the paper’s editor, Ben Bradlee, apologized publicly for himself and the institution, assumed blame and published, in the Post, the results of a huge internal investigation.
Some management changes were made in the Metro Department, where the story came from, and the paper moved forward and ultimately survived.
In 2003 the New York Times went through a brutal plagerism scandal involving another young reporter named Jayson Blair. The resulting internal investigation, which the Times also published, led to the resignation of Times editor Howell Raines and his managing editor Gerald Boyd. Again, the publication weathered the storm by working hard to reestablish its credibility early and often.
But in this case, News Corp.‘s initial response to the charges was to try to isolate the problem on one person and take no institutional blame. The public and the government were assured over and over again that after considerable internal investigation the problem was isolated and over. In two words, they said “Trust us,” but did nothing else to earn that trust.
Thus began the coverup. Like many of the most famous coverups—Watergate comes immediately to mind—the ultimate downfall of the participants came because they lied about the original offense rather than taking responsibility, seeking to identify the underlying factors that allowed the problem to occur, and trying to fix them and move on.
In media, we today have precious else besides our credibility to set us apart from anyone with a bullhorn or a website. If we lose that credibility, we have no separation from the rest of the world and their messaging.
In a world of consolidation, with many media brands now falling under one corporate umbrella, the problem is further complicated for two reasons:
1) People who know that two media companies are owned by the same company will assume practices at both are the same under one corporate culture and 2) Pressure can be brought against media conglomerates on multiple fronts. In the case of The Washington Post during the Pentagon Papers, for example, the government threatened to pull the Post Company’s TV station licenses. So being a media conglomerate, while generally making the company a stronger player because of its broader financial base, also makes it more vulnerable to attack on multiple fronts from a powerful government that regulates media. Today, that scenario played out when News Corp. pulled its planned acquisition of BSkyB (NYSE: BSY) because of widespread government reaction to the News of The World scandal.
To sum it up, reputation and brand equity are rapidly becoming the primary assets of any media business. So when we damage them, we damage the entire industry, starting with those companies closest to the offender. The News of The World Scandal does damage others in the News Corp. family, like Fox News, The Wall Street Journal and even my former company, MarketWatch. Trust is something that has always been hard to earn, but has become even harder to come by in recent years.
These news organizations can only protect their reputation by redoubling their efforts to do great journalism and to be overly transparent in their techniques and procedures, going out of their way to describe their motivations and their standards in pursuit of stories. There is no other way to convince a growingly skeptical audience.
Without doing that, they are each just another screaming voice in the crowd.
(Image source: mediabistro)
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