Monthly Archives: February 2011

Facebook and the Future of Labor Unions

Tom Hayes examines the role of social media for members of labor unions:


If anyone in the world should be paying close attention to the grassroots political unrest in the Middle East, it is Big Business and Big Labor in America. The rise of self-organized groups of people toppling once-entrenched regimes is a harbinger of things to come here in the U.S. too.

For now, traditional battle lines are more immediate. In Wisconsin, Governor Scott Walker’s attempt to break the public employee union there is being characterized by some as a last gasp test for Labor. It is not. The fate of big unions has already been cast. Like record stores and time-bound television, the labor union as an organizing device has outlived its usefulness: people simply don’t need intermediaries to organize them into groups anymore.

But Corporate America shouldn’t get too excited. In fact, the rise of organic self-organization–the powerful force behind social media and its massive communities like Facebook, LinkedIn, QQ and Twitter–has already changed the marketplace and is an emerging threat to all industrial-age institutions, be they governmental, commercial, political, social, or religious. When you empower individuals you necessarily weaken organizations.

While the hidebound institution of the union will become less relevant, organized labor as a force will become more powerful in years to come. Things will just happen differently. The nexus of the Internet and ubiquitous mobile communications makes collective action easier and more imperative than ever. As consumers, people have gotten a taste for their new power. They have already busted the backs of other big intermediaries, like the music industry and chain bookstores. The training wheels are coming off and soon people will turn their sites to other collective endeavors. All the same impulses that motivate people to join affinity groups for fun, shopping and hobbies will soon take a serious turn with political and economic implications. Think Groupon for social action.

Like all institutions trying to slow their decline in an age of networks, labor unions have scurried to get hip to the new media. But attempts to galvanize social network unionism through clone Facebook services like UnionBook have fallen flat. People don’t need others to tell them how to organize; they can talk directly to each other now.

Besides, the issue is much bigger than social media as a tactic. The Internet has fundamentally changed group-forming in our time. The presence of more than two billion people (and twice that many to come in the next decade) on the World Wide Web now means that for essentially every person in the developed world, and a sizable minority of everyone else, the rules of social organization have changed forever. We are no longer bound by proximity, social contract, tradition, or limited information in our selection of the groups we choose to join.

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News Outlet Exclusively On Facebook

The Nieman Journalism Lab through Harvard University examines a new D.C. news outlet which will operate entirely on Facebook:


Say you run a community news site. In your spare time. And Patch has moved into your neighborhood. How do you, with limited resources but a desire to keep contributing to your community, stay competitive?

One site’s solution: Take the “site” out of “news site.” Starting March 1, Rockville Central, a community news outlet for the DC-area city of Rockville, Maryland, will move its operation to…its Facebook page. Entirely to its Facebook page.

“There are always two different conversations going on,” Cindy Cotte Griffiths, the site’s editor, told me — one on, and the other on the site’s Facebook page. Why force the two to compete with each other, when they’re actually, in general, the same conversation? Facebook is, Cotte Griffiths notes, “where the people are.” (Rockville Central currently gets about 2,000 of its average 20,000 monthly hits from Facebook, she told me.) “Everyone’s always trying to get people out of Facebook,” she says. “And we’re like, ‘Well, we’re already here.’”

There are some obvious benefits to the all-Facebook approach. Facebook, for one, has a huge built-in audience — one that is used to sharing and commenting on and contributing content. It has a built-in infrastructure — one that easily accommodates multimedia. It has, essentially, a built-in mobile app. For an outlet that’s run by people who do that running in their spare time — that is, publishers who have even less time than most to deal with concerns about site design, server capacity, and other logistical aspects of digital journalism — Facebook’s insta-infrastructure could free up time that may be spent on more traditionally journalistic endeavors: fact-gathering, conversation-guiding, content-aggregating, community-building, etc.

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Is Hyperlocal News Profitable?

This week longtime technology journalist Paul Gillin examines the rise and fall of the hyperlocal news operation TBD:

Wow, that was fast.

Just six months after it was launched as the most ambitious hyperlocal news operation in the US, Washington’s TBD has cut expenses deeply and narrowed  its mission to arts and entertainment. One third of the staff – or 12 employees – were let go this week. The apparent chaos at TBD is evidenced by the fact that general manager Bill Lord, who came on board just two weeks ago, said layoffs were only one of several options being contemplated at that time. Owner Allbritton Communications cited low traffic figures as the cause of the cutbacks. Considering that TBD racked up 6 million page views in January, it must have needed a lot of traffic to cover expenses.

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Following The Murdoch Money Trail

Allan Sloan examines how shareholder money funds Rupert Murdoch’s family deals:


The Murdoch family owns only about 12 percent of News Corp., but Rupert Murdoch sure runs the place like a wholly owned family candy store. The company, blurring the distinction between public and family business, makes deals with family members, using shareholder money to get them into the corporate fold.

The most recent example is the $675 million deal for News Corp. to buy Shine Group, a London-based TV production company majority-owned by Murdoch’s daughter, Elisabeth. As part of the deal, she’ll go on News Corp.’s board. In other words, News Corp. is buying Elisabeth, not just her company.

Once at News Corp., she’ll be competing with two board members, her brothers, James and Lachlan, to become the next leader of News Corp., the world’s biggest and most influential media company. Its properties include the Fox networks, the Wall Street Journal, BSkyB and the New York Post.

James has been at News Corp. since 1996, when the company bought an 80 percent stake in his start-up Rawkus hip-hop record label for an undisclosed sum. Rawkus closed in 2004.

James set up his company after dropping out of Harvard. Elisabeth had worked in the News Corp. empire, then stalked out to start her own business. But now, they’ve both been brought – and bought – into the family fold.

I have no idea whether the Shine deal is a good deal or a bad one for News Corp. Its properties include MasterChef, Law & Order UK and Biggest Loser, but $675 million is a lot of money. What I do know is that Elisabeth Murdoch is the Biggest Winner here. In case you’re interested – and why shouldn’t you be? – this deal is a payday of about $300 million for Elisabeth and her trusts, owners of a combined 53.5 percent of Shine’s stock, according to public records.

News Corp. says it’s paying 415 British pounds for Shine, including debt that it’s assuming. Subtract 45 million pounds for the debt, convert pounds to dollars, and the 53.5 percent stake is worth about $320 million.


This is the second time Elisabeth and Daddy have done business. The first time, in 1994, Rupert found two California TV stations for Elisabeth and her then-husband to buy, and he guaranteed the $35 million loan they took out to buy the stations. They flipped them less than two years later for a $12 million profit.

Did Rupert, who as chairman of News Corp. has a fiduciary obligation to his shareholders, offer the company the first bite at those TV stations? Did the company’s board approve the Rawkus deal that brought James into the company? News Corp. declined to comment. The company says that its attorneys vetted the tentative Shine transaction (which is an agreement in principle) and that the board approved it unanimously and will vote again after negotiations.

Four years ago, News did a multibillion-dollar deal to cement Murdoch family control: trading assets and cash to John Malone’s Liberty Media in return for Liberty’s News Corp. stock, including a hefty holding of voting shares that threatened the family’s control. But News Corp.’s public shareholders got the right to vote on the Liberty transaction. That’s not the case in the family deals.

How can Murdoch do this with only about a 12 percent stake in a giant public company? Because only about 30 percent of News Corp.’s shares have voting power, and Murdoch and a family trust own 40 percent of them. And because he’s Rupert Murdoch.

Murdoch has turned an obscure Australian newspaper company into a global colossus. On the way, he ignored Wall Street’s opinions, took huge risks and generally succeeded. No matter how much you respect him, this all-in-the-family stuff just isn’t right for a public firm.

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The Great Paywall Debate

How will the paywall system play out for the newspaper industry in the coming future? Cary Spivak reports:

Newspaper publishers and executives these days can be divided into three groups:

First, there are those who charge readers to view at least some of their content on computers as well as smart phones or tablet devices like the iPad.

Second, there are those who are thinking about doing just that.

The third group? Executives who are watching the first two.

Proponents and critics alike agree that 2011 will see many revenue-starved newspapers begin charging for online news. Some will lock up much of their local content, while others will use a meter system in which readers get a handful of pageviews free but have to pony up if they want more. Still others will charge only for certain types of stories, say, news about a particular pro or college sports team or a specific industry. Most will continue to make some of their content available without charge.

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Huff? Nooo! As Longtime Huffington Hands Cash In, Others ‘What If?’

A select few at the Huffington Post will be receiving compensation for their writing.  Mike Taylor at Media Mob details further:

A certain amount of grumbling is par for the course in the media business these days—an ambient hum so pervasive you almost forget it’s there. But that disconsolate keening seems to have reached a new pitch with AOL’s staggering $315 million purchase of the Huffington Post, an aggregation-loving site that, in the words of one Web editor, makes fellow page-view-hoarders Tina Brown and Nick Denton “look heroic.” The deal means hefty payouts not only for proprietress Arianna Huffington (rumored to have landed somewhere around $20 million) but also for some of her minions. Sources tell The Observer that a half-dozen or so original employees are expecting payouts of around $1 million each.

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U.K. Papers’ Paywalls A Test Of Relevance

The Times and The Sunday Times in the U.K.  have recently launched digital paywalls on their websites. Will the U.K. experiment become relevant to U.S. newspaper publishers?  NPR reports:


From NPR News, this is ALL THINGS CONSIDERED. I’m Robert Siegel.

Conventional wisdom tells us that readers are only willing to pay for online news that, A, fuels their passion, or B, helps them make money. Across the Atlantic, though, two leading daily newspapers have ignored conventional wisdom, putting up an ironclad digital pay wall.

As NPR’s David Folkenflik reports, they’re testing whether they can remain relevant while telling readers the free ride is over.

(Soundbite of protest)

DAVID FOLKENFLIK: On a recent visit to London, I came across huge protests clotting the streets. College students were enraged by the government’s proposals to raise tuition. It made headlines everywhere including the Times of London. But if you clicked on, nothing. The Times of London and its sister paper the Sunday Times together have one of daily journalism’s most rigid digital pay walls.

Aside from a brief trial period, if you don’t pay, you can’t read their content on the Web, on the iPad, iPhone, wherever.

Tom Whitwell is assistant editor of the Times of London, with the responsibility for its website. He says making people pay is crucial.

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