|BUSINESSWEEK ONLINE : OCTOBER 11, 1999 ISSUE|
Commentary: Journalism's Online Credibility Gap
Journalism is built on trust. If readers believe that a reporter has a hidden agenda, then no amount of heroic reporting, graceful writing, or bold photography will ever win them over. That's why most news organizations have elaborate rules designed to ensure that their editorial content isn't biased by the bottom line. Ad salespeople are barred from discussing articles with reporters, for example, and only editors are allowed to see copy before it's published.
As magazines, newspapers, radio stations, and television networks rush to colonize the Internet, however, the Great Wall between content and commerce is beginning to erode. Some news organizations now earn small transaction fees from some product sales on the World Wide Web. That means there can be a direct economic incentive to say nice things about, say, a particular paperback or laptop--something that didn't exist when book publishers and computer makers were limited to buying fixed-rate ads. Meanwhile, forbes.com is running Microsoft Corp. (MSFT) ads that could easily be mistaken for staff-written articles. That confuses readers and seems to violate the spirit of a long-standing American Society of Magazine Editors (ASME) rule prohibiting advertisements with ''an editorial appearance.''
The latest media company to take a step down this slippery slope of ethical compromise is General Electric Co. (GE) Its CNBC unit, which runs a business-news Web site, on Sept. 14 acquired a 12.4% stake in Archipelago Holdings, an electronic communications network for trading stock. Long-term plans are likely to include allowing visitors to cnbc.com to link directly to Archipelago. That means CNBC could be in the awkward position of both providing coverage of online trading and profiting from it.
All these developments raise a tough question: Is there an irrevocable conflict between e-commerce and ethical journalism? As news outlets get closer to the companies they cover, it's possible that they'll lose the faith of their readers and viewers. ''At a certain point, people won't be able to differentiate between what's trustworthy and what isn't,'' says Orville Schell, dean of the Graduate School of Journalism at the University of California at Berkeley. Over the long term, he worries, this loss of credibility could have a corrosive effect on society in general--especially given the media's importance as a political, cultural, and economic watchdog. ''If people don't trust their information, it's not much better than a Marxist-Leninist society,'' Schell says.
Are such fears overblown? After all, none of the ethical quandaries facing media Web sites are totally new. Magazines, newspapers, and TV stations already face a conflict of interest when they report on advertisers--and yet they have developed a set of rules that helps maintain credibility. Nor is CNBC really such a pioneer. Other business news outlets, such as Dow Jones (DJ), Reuters, and Bloomberg, already have indirect ties to their own electronic stock-trading networks. What's more, the traditional press isn't all that highly regarded by the public anyway. In spite of having more extensive ethical rules than their Web counterparts, newspapers, magazines, and TV stations still make plenty of mistakes, occasionally invade people's privacy, and sometimes hype their stories.
NEW MEAL TICKET. So it's tempting to argue that the ethical problems posed by e-commerce are just a slight difference of degree from those that the news media already face. But the fact is, the issues are different in kind. E-commerce could force journalists to buddy up to advertisers in ways they never have before. That's because, at the moment, the economic model that supports most news organizations doesn't appear to be working online. The traditional print and electronic media live off of subscription fees and advertising sales. However, neither of those revenue streams is likely to keep them afloat on the Internet. Web surfers, for starters, are used to getting content for free, and they have been reluctant to shell out any money for it.
Similarly, companies don't like paying a flat fee for online advertising--it's too hard to track the effectiveness of their marketing dollars. Instead, they only want to pay for actual sales leads, which can be easily monitored on the Web as readers click from site to site. As a result, advertisers will increasingly pressure media Web sites to support themselves with e-commerce transaction fees. By the year 2003, media sites will receive $25 billion in revenue from transaction fees, compared with $17 billion from ads and $5 billion from subscriptions, estimates Charlene Li, senior analyst for new media at Forrester Research Inc. in Cambridge, Mass.
SILVER LINING? This fundamental shift in the way the media make money could potentially change the way they cover the news. The more the press gets in the business of hawking products, the harder it will be to criticize those goods--and the companies making them. A bit of puffery inserted here, a negative adjective deleted there--it doesn't take a lot to turn a review or story about, say, smart phones, into something approaching highbrow ad copy.
How well the press stands up to this structural threat to its integrity will depend on how much honesty people demand of the news media--and how much it demands of itself. On the first point, the key issue is whether Net shoppers will vote against shoddy journalism with their buying power. Surely, people looking for mortgages, voting for a politician, or trying to decide what movie to see will continue to need unbiased information to help them make decisions. So it's possible that, over time, quality news sites will be able to generate enough traffic to survive on revenue from ad sales--and resist the pressure to sell out to e-commerce. ''The morass on the Internet is inevitable, but weirdly, it could create a business opportunity,'' says media critic James Fallows. ''The more there is a big soup of information, the more value there is to things that appear to be straight.''
Fallows points out that consumers have been swift to discipline sites that are caught acting unethically. When it was revealed that Amazon.com (AMZN) was taking fees of up to $10,000 for books that it labeled as ''destined for greatness,'' for example, its customers were outraged, and the company quickly agreed to disclose future promotional payments.
For every Web site that has been caught bending the rules, however, there are dozens more that are pulling the wool over customers' eyes. It's unrealistic to think that every online ethical lapse will be exposed--or that in many areas of interest, the public particularly cares. ''Most people aren't very discerning,'' says Steven Brill, chairman and editor-in-chief of Brill's Content magazine. ''Maybe they need good financial information, but I don't think people know what good information is when you get into culture, society, and politics.''
NEW RULES NEEDED. The second factor that will determine whether journalism can resist the pressure of e-commerce is how well reporters and editors police themselves. So far, news organizations have built their Web sites first and dealt with ethical questions later. The rear-guard effort has stopped some of the more egregious abuses and resulted in some well-intentioned efforts to apply existing ethical rules online. ASME, for example, has published advertising guidelines for the new media.
However, simply taking the old rules and applying them on the Web won't be good enough. Because news organizations are going to be under more pressure than ever from their advertisers, they have to come up with even tougher ethical guidelines. One step that may be necessary is more complete disclosure of online business relationships. If businessweek.com, say, were to take a cut of the sales of every Hewlett-Packard Co. (HWP) computer sold through links between the two Web sites, then this information would have to be disclosed in any articles about the company. So far, the vast majority of news sites have fallen far short of this standard of disclosure.
That situation may have to change. No matter how high the tide of e-commerce rises, the only thing the press has to sell, ultimately, is its credibility. We're still in the early days of Internet journalism, but unless media organizations start taking stronger steps to defend their integrity, there will be a gradual decline in reporting standards on the Web and ultimately, a loss of the public's trust.
By Mike France
To read a letter to the editor about this story, click here.
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