The financial crisis, networks and the future

of news

Rolf Rosenkranz

Editor. Devex

ICGFM conference. Miami. 5/19/09

The problem• Downturn in global growth

• Decline in commodity prices

• Tightening of credit

Francis Fukuyama

Why?• Asset prices rising unsustainably

• Debt resulting from prolonged credit expansion

• Inability of regulators to keep up with new financial instruments

The mediaIFAD. EU Financial Crisis News. Crisis Talk. IMF’s Public Financial Management blog. Economist. OECD Observer. Financial Times. Inter Press Service. Devex.

Coverage• USA: no credit for Dr. Doom

• South Korea: trial vs. “Minerva”

• Russia: “We do not have it”

• NL: “Withdraw cash from ATM machines while you can”

Ignorance. Lack of access. News grind.

Cause + effectIgnorance. Desensitization.

Mistrust. Fear.

Pew: Bleak economic outlook causes U.S. to…

Sept. Oct. Dec.

Cut back vacation spending

48 % 59 % 62 %

Change savings or investments

39 % 48 % 60 %

Adjust retirement plans

23 % 26 % 32 %

Pew: Understanding the economic situation

Very well

Fairly well

Not well

Total 24 % 49 % 27 %

Men 30 % 50 % 20 %

Women 19 % 48 % 33 %

Pew: What the U.S. public knows

Gov’t wants banks to… (lend more money)

83 %

Who holds most U.S. debt (China)

71 %

Timothy Geithner’s job (Treasury sec.)

58 %

Current unemployment rate (ca. 8 %)

53 %

“Considering the wall-to-wall media coverage of the financial crisis, it is startling to see how few Americans have a grasp on

the most basic economic facts.”

-- James Bowers. managing director.

Ctr. for Economic & Entrepr’l Literacy

News coverage milestones

• August: U.K., Japan and others enter crisis mode

• October: Iceland financial crisis

• April: London G-20 summit

Media trendsConcentration. Privatization. Ad wars. Less collective bargaining. Pay decreases. Generation shift. New media. Decreasing quality.

Information = news

Media = press

Audience segment: Traditionalists

• 46 % of the public

• Older, less educated, less affluent

• Heavy reliance on TV news

• Strong interest in weather

Audience segment:

Integrators

• 23 % of the public

• Middle-aged, well-educ., affluent

• TV is main news source, but regularly online

• Strong interest in (political) news

Audience segment:

Net-newsers

• 13 % of the public

• Relatively young, well-educated, affluent, male

• Read political blogs > watch network news

• Strong interest in tech news

2008 U.S. TV news coverage

• Pres. elections (ca. 3,700 mins)

• Economy (ca. 2,800 mins)

• International coverage (1,900 minutes)

-- Tyndall Report

International coverage on U.S. TV

• Iraq: 244 minutes (88 from Iraq)

• Beijing Olympics: 236 minutes

• Afghanistan: 126 minutes

• Sichuan earthquake: 119 minutes (94 from China)

-- Tyndall Report

Pew: Foreign news coverage online

• 27 % of total news

• Key topics: Pakistan, Israel-Palestinian Territories conflict, Zimbabwe elections

• Press: 17 %

Foreign coverageOverseas bureaus closing. Reliance on wire services. More freelancers. More competition. Parachute journalism. Multimedia. Time pressure. Global audience.

Journalism’s cardinal sins

• Publish easy-to-gather stories

• Select safe facts and ideas

• Provide “false balance”

• Give audiences what they want-- Nick Davies, author, “Flat Earth News”

“News organizations will have to do more than adapt to changing technology; they will have to solve their economic problems in a manner that will benefit their customers.” -- Stuart Loory, editor, Global Journalist

Winners?Trade publications. Bloggers. Software developers. Mobile

phone companies. Consultants. Nonprofit media. GlobalPost.

Content sharing. Pay-per-view. Custom-tailored news. Google.

ONA: Online journos optimistic

• 54 % say journalism heading down wrong track

• 57 % say Internet is changing journalism values

• 82 % are confident profitable business model online will be found

News sought onlineWeather. Science & health. International. Technology.

Business & financial. Politics. Sports. Entertainment. Local.

Social media

Blogs• South Korea

(92 % read, 72 % write)• Philippines

(90 % read, 65 % write)

• France (78 % read, 31 % write)• Canada (56 % read, 22 % write)

-- Universal McCann

Online communities• Philippines (83 %)

• Brazil (75 %)

• China (64 %)

• United States (43 %)-- Universal McCann

Social media:

The business case• Mass media

• Creative consumer

• Viral marketing

• Human touch

Credibility

Networks• Public Expenditure Management

Peer Assisted Learning Network

• Jordan Professional Communities

• Devex

100,000 develop

ment projects

1 million developm

ent professio

nals

200 major donor agencies

She needs a filter

We’re learning from…

Network science“the organized knowledge of networks based on their study

using the scientific method”-- National Research Council

Cesar Hidalgo

Worlds apart…

United States

Kenya

Rolf.Rosenkranz@Devex.com

One stop Value-added Wisdom of crowds