My ongoing media DE-consolidation series represents an effort to set the record straight regarding one of the leading myths about the media marketplace today: the notion that rampant consolidation is taking place and that operators are only growing larger and devouring more and more companies.

Nothing could be further from the truth. Over the past 3 to 5 years, traditional media operators and sectors have been coming apart at the seams in the face of unprecedented innovation and competition. The volume of divestiture activity has been quite intense, and most traditional media operators have been getting smaller, not bigger. "Traditional media's numbers are shrinking," argued FCC Commissioner Robert McDowell in a recent speech. "The ironic truth is," McDowell continued, that "in many cases, media consolidation has actually become media divestiture. Companies... have been shedding properties to raise capital for new ventures."

And so that trend continues today with the announcement from Cox Enterprises that it will be selling almost all its newspapers. According to the The Atlanta Journal-Constitution:

I used to get endless grief from pro-regulatory media activists here in DC when I put forward the argument in days past that Google was a media company and a major player in the battle for eyes, ears and ad dollars in America's media marketplace. Increasingly, however, more people are coming around to seeing that point, even the crusty old media giants themselves.

In a smart essay over at the Freedom to Tinker blog, David Robinson takes the New York Times to task for an article today again wondering, "Is Google a Media Company?" As David rightly argues:

Over at Reason's "Hit and Run" blog, Matt Welch has penned a piece pointing out how it is impossible to make the anti-media activists happy. Welch notes that radical activist groups like Free Press go around demonizing media moguls like Rupert Murdoch because he supposedly symbolizes the fact that will live in an age of media monopolists who puppeteer all our news and entertainment from on high. It's all 100% B.S., of course, as we have shown here again and again.

But even when confronted by the rise of alternative owners and ownership models, the Free Press fanatics show their true colors by saying that won't work for them either. Walsh notes, for example, that the skake-up of the old Tribune empire and the emergence of Sam Zell as an independent owner of the Trib -- and an owner hellbent on downsizing the old empire, no less -- should be exactly what Free Press wants:

Last month I posted a tongue-and-cheek piece thanking policymakers for taking steps to save us from loud TV ads and product placements. The whole thing just strikes me as the height of absurdity; it's a stupid way for regulators to spend their time and it's a complete waste of taxpayer dollars. Backers of such regulations assume that we in the public are little more than ignorant sheep whose minds will be subliminally programmed to want to drink certain colas or drive certain cars just because they saw them in a TV show. Absurd.

The other thing that kills me about this debate is how some people seem to imagine that product placement has somehow come out of nowhere recently and taken over broadcast TV and radio to an unprecedented extent. That's either revisionist history or ignorance of it. The fact is, broadcasting has been filled with product placement for years. Media guru Jack Myers points this out in a good piece on the issue this week:

Those old enough to recall the early days of television news recall that Camel cigarettes and Timex sponsored the NBC News with John Cameron Swayze. On-set signage was prominent. Local radio personalities have always used their relationships with consumers to advance their sponsors' interests.

But it goes way beyond that. For God's sake, has everyone forgotten about the "Texaco Star Theater"? It was the top-rated show of the 1950s, pulling in a stunning 61.6 rating in 1950-51 alone. How did the show begin? Here's how the Wikipedia entry describes it:

On television, continuing a practice long established in radio, Texaco included its brand name in the show title. When the television version launched, Texaco also made sure its employees were featured prominently throughout the hour, usually appearing as smiling "guardian angels" performing good deeds of one or another kind, and a quartet of Texaco singers opened each week's show with the following theme song:

As we've discussed here before, newspapers are struggling. We all know that. The question is what, if anything, will save them? Most pundits tend to point to a two-fold solution: (1) get serious about leveraging the natural local advantages newspapers hold; (2) and find away to do so online as quickly as possible before they lose the bulk of the local online ad market to other competitors. This is why there's a lot of talk these days about turning traditional papers into "hyper-local" web portals for their communities. Of course, there's no guarantee that will work, especially in light of changing attitudes about "media localism."

But let's assume that that is indeed the best path forward. Will it really save newspapers? As eMarketer reports in today's newsletter on "Can Local Web Ads Save Newspapers," it's a bit of a good news--bad news story:

The good news is that newspaper site ad revenues are growing along with other online ad spending, especially for local news sites. Local newspaper online ad revenues are predicted to reach $3.7 billion this year, according to eMarketer calculations based on Borrell Associates data.

The bad news is that this spending will not make up for print ad losses for some time, according to Lisa Phillips, senior analyst at eMarketer. Ms. Phillips noted that advertisers still pay more for print readers than for online readers. "This is a transition that will take several years," she said. "Local advertisers are paying attention to the shift in reader behavior, but it will take a while for everyone to adjust."

And so we will have to wait to see how it all plays out. But I am highly skeptical that traditional newspapers operators will be able to make up anywhere near the amount of revenue online that they are hemorrhaging over on the print side of the business. There's just too much other competition out there online already for our eyes and ears. The age of "protectable scarcity" is dead and that means newspapers just don't have the lock on local or regional markets they once did.

Terrific piece here from Ed Felten on how new technologies and cultural trends are undermining traditional conceptions of "media localism." It's a theme I have written on at length, most recently in this essay on "Our Continued Wishful Thinking about 'Media Localism'." Anyway, as Felten correctly notes in the conclusion of his essay:

New technologies undermine the rationale for localist policies. It's easier to get far-away content now -- indeed the whole notion that content is bound to a place is fading away. With access to more content sources, there are more possible venues for local programming, making it less likely that local programming will be unavailable because of the whims or blind spots of a few station owners. It's getting easier and cheaper to gather and distribute information, so more people have the means to produce local programming. In short, we're looking at a future with more non-local programming and more local programming.

That's exactly right. As Grant Eskelsen and I argue in Chapter 6 of our new Media Metrics book:

The decline of "localism" in media is a much-lamented but quite natural phenomenon as citizens gain access to news and entertainment sources of broader scale and scope. Although it is impossible to scientifically measure exactly how much "local" fare citizens demand--and defining the term is another challenge--we know that they still receive a wealth of information about developments in their communities. However, it is also evident that, left to their own devices, many citizens have voluntarily flocked to national (and even international) sources of news and entertainment. [...]

[But] the demise of "localism" has been greatly exaggerated. The relative decline in local media is simply a natural development resulting from the voluntary choices made by millions of American citizens, but the tools for producing, distributing, and acquiring local content are more robust than ever.

Over at Technology 360, Dennis Haarsager points out that there's probably too much gloom-and-doom out there in the blogosphere regarding the future of various media platforms. He did phrase searches "to see how the media stacked up in the death department." He got back the following results:

> "death of television", 13,000 results
> "death of TV", 28,200 results
> "death of radio", 227,000 results
> "death of newspapers", 331,000 results
> "death of blogs", "death of the blogs", "death of the blog", 81,400 results
> "death of the web", 215,000 results
> "death of the net", 746,000 results
> "death of the internet", 1,910,000 results

No doubt---as Mark Twain might have said---the rumors of the death of media have been greatly exaggerated. And, as Mike Mansick of TechDirt points out, not all papers or media outlets are facing gloom and doom scenarios.

Nonetheless, many traditional media sectors and providers do find themselves in troubled waters today as tsunami of creative destruction tears through their markets. In our new "Media Metrics" report, Grant Eskelsen and I show how two sectors in particular---radio broadcasting and newspapers---are getting hammered particularly hard by a sort of "media perfect storm":

* loss of protected markets or "protected scarcity" = there's just no guaranteed audience anymore
* rapid technological change = the way media is created and transmitted has been completely transformed
* massive inflow of new competitors / platforms = no way to stop the deluge of new voices, including user-generated content
* loss of consumer confidence and allegiance = people have plenty of other places to turn their attention
* loss of advertiser confidence and allegiance = advertisers have plenty of other places to promote their goods and services (including direct-to-consumer appeals and 'word-of-mouth' marketing efforts)
* loss of investor confidence and allegiance = shareholders have lots of other places to invest their capital today

The results have been particularly grim for newspaper in recent months as various reports have noted.

Faithful readers will recall that, several months ago, I penned a 7-part "Media Metrics" series that took a hard look at the health of the media marketplace. Today, the Progress & Freedom Foundation is releasing a greatly expanded version of these essays that I have put together with my PFF colleague Grant Eskelsen. In this 100-page special report, "Media Metrics: The True State of the Modern Media Marketplace," we begin by noting that heated debates about the state of the media marketplace continue to rage in Washington, and opinions seem to range from grim to outright apocalyptic. As we note on pg. 1:

Many people--including a large number of legislators and regulators--argue that America's media marketplace is in a miserable state. Some claim that citizens lack choice in media outlets and that options are just as scarce as ever. Others believe that media "localism" is dead or that many groups or niches go underserved because of a lack of true "diversity" in media. Others argue that the market is hopelessly over-concentrated in the hands of a few evil media barons who are hell-bent on force-feeding us corporate propaganda. And still others say that the quality of news and entertainment in our society has deteriorated because of a combination of all of the above. It all sounds quite troubling, but is any of it true?

After taking an objective look at the true state of America's media marketplace, we conclude that such pessimism is unwarranted. Indeed, a careful review of the facts reveals that---contrary to what those media critics suggest---we have more media choice, more media competition, and more media diversity than ever before. Indeed, to the extent there was ever a "golden age" of media in America, we are living in it today. The media sky has never been brighter and it is getting brighter with each passing year.

The FCC for generations has used three words to describe its mission in media regulation: competition, localism, and diversity. In nearly every substantive action it takes in this area, the Commission dutifully recites one or more of its tripartite desideratum as the philosophical underpinning for its work. FCC Critics and supporters alike seem, at least publicly, to agree that the Commission's actions should, at their most fundamental level, promote competition, localism, and diversity. It may be the only active FCC motif on which there is general agreement.

Yet, any serious observer of FCC media regulation has to wonder whether, in fact, the oft-stated mantra of competition, localism, and diversity is anything more than palaver. Indeed, whether the refrain emanates from a party advocate in a pleading or the agency itself in an order, the position espoused and/or defended frequently runs directly contrary to the purported object of promoting competition, localism, or diversity.

There's an interesting discussion going on over at Editor & Publisher in which E&P columnist Steve Outing and Mark Potts of the now-defunct Backfence.com are debating media localism and recent efforts to give dying newspapers a new lease on life by focusing on the "hyper-local" coverage and community services. Potts obviously didn't take too kindly to Outling saying of Backfence that: "We know from its experience that relying too heavily on non-paid citizen contributors isn't a winning strategy." And that the: "content is often of low quality and boring, and dull just doesn't fly in the hyper-competitive Web environment. In response, Potts suggests that other factors were responsible for the site's demise and that hyper-localism and user-generated local content is the future of the industry:

It's also unfair to suggest that hyperlocal content is "of low quality and boring," as Steve does in his column. Low quality? To a professional editor, maybe, but the fact is that most participants in user-generated sites can communicate very well. It may not be "journalism," but it's still quite readable and interesting. And "boring" is in the eye of the beholder. To an outsider, any hyperlocal information is probably boring. It may be to a transient resident, too. But to someone with a stake in the community, kids in the schools, paying taxes, dealing with community services, patronizing local merchants, etc., those arcane town council meetings, zoning disputes, tips on finding good pizza and kids' sports scores are incredibly important -- more so than just about anything a lot of us think of as journalism.

I think they both make some interesting points, [and there is a running exchange going here] but I want to add a few other frequently overlooked points about the whole "media localism" debate, which continues to stir up so much controversy within the industry and especially here in Washington policy circles. There are two fundamental realities about "localism" that few industry analysts or media critics bother discussing that I want to focus on: