Thursday Aug 10, 2006

The Intersection of the New and Old Media

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The Intersection of the New and Old Media

by Alex  Chinn, The Red Zone Network

Take a trip with me. Let’s go back in time, back past Hurricane Katrina and Brangelina, back when the Desperate Housewives were just desperate actresses and the only domestic spying anyone worried about was whether their exes were stalking them. Remember those simpler days?

Just a few years ago, there was The Media. This boldly capitalized group was charged with delivering perspective to the news-starved masses. Sure, the message wasn’t always the same, but the news was. Fox News and CNN might spin the same story in different ways, but the chronology of events was accepted as gospel. It was as if The Media as a whole decided which stories were fit for public consumption, and which weren’t. Bird flu? Newsworthy. Police corruption? Save it for the movies, kids.

Then a funny thing happened -- the bloggers arrived. They were just regular people with something to say, and the burning feeling that it wasn’t being said anywhere else. They weren’t necessarily in opposition to the news, but to the system of news. They were an outcry against the mass packaging of information, earnestly contrarian in their efforts.

The Rise of the Contrarians

Bloggers, almost by mandate, simply could not retell the same stories that you’d see in the newspaper or on the boob tube. They wrote in order to supply a counterpoint that was sorely missing, to fill in the gaps that they saw in the collective consciousness. Someone had to speak for the disenchanted, for those with stories burning in their brains and the inescapable zeal to make sure everybody knew them.

That’s why it became so common for certain bloggers to become the figurative leaders of one-issue movements, passionately and viciously reporting on all things to do with their chosen cause. Specialization set them apart from the news smorgasbord, the taster’s menu of preselected sound bites.

At first, they were dismissed as dilettantes and rabble-rousers. But slowly, the mainstream caught on -- and the bloggers not only gained credibility in reporting the stories, they became the story. In a Twilight Zone twist, The Media started reported on the media.

News show anchors would read aloud their favorite blog articles from the day -- often covering entire news stories simply by reading the blog accounts of them. After all, to be taken seriously as a blogger, you had to do your homework. Credibility at CNN comes from a logo and a voiceover. Credibility in the blogosphere comes from saying something, or finding out something, that nobody else has uncovered yet.

Two Sides of the Same Coin

And then, just as the natural order seemed to be settled -- the Old Media against the New Media -- it happened. The two joined, merging into an avalanche of news. Bloggers started applying for media credentials, grilling politicians at press conferences, contributing columns to major newspapers -- subversion became mainstream. It’s a theme that’s happened over and over in pop culture throughout the years, though usually in music or film.

In this case, it quickly became accepted that keeping up with the news entailed reading two stories -- the AP version and the blogger version. They became two sides of the same coin, and the effect of each was magnified by comparison. After a brief period of upheaval, news was news again; it was just more contentious. Instead of Hannity and Colmes, it was Hannity and that spiky-haired kid down the street with tattoos and a lip piercing.

What Makes a Journalist?

Now, we have the case of Josh Wolf. Josh was one of the pioneers of the New Media, videoblogging on his Web site and advancing the cause of making the media more democratic -- a tool of the people, created by the people. The news becomes history, and as has been said before, perhaps the greatest privilege of being in power is writing what will become history. Josh wanted the people to determine what would become their history.

Well, now Josh is in a jail cell in Dublin, California. Last year, while videotaping the San Francisco protests against the G8 Conference, he may have captured some footage that shows, in the background, rioters setting a police car on fire.

Federal authorities demanded that he turn over the unaired footage, so that they could use it to find the protesters who committed the arson. They claim that it’s a federal matter, since the San Francisco Police Department paid for some small fraction of that squad car with federal anti-terror money.

Wolf states that he is an independent journalist and therefore must be protected by California’s shield law. That law protects all unpublished materials and confidential sources for a journalist. The judge in the case rejected that argument, and Wolf is being held in contempt of court indefinitely.

Wolf is illustrating, as some others have recently, that bloggers must now be considered part of the media establishment. Anyone who writes up his or her opinions and interpretations, who documents events and then spreads accounts of them, is fulfilling an important role, arguably one that has made this country as potent as it is. Anyone can be in the media. You just need something to say and someone willing to listen.

Opinions Don’t Stuff Wallets

Here at the Taipan Group, we sit on the fringe of both camps. We’re not in the trenches, breathlessly reporting from Basra amid shell bursts, or picking through the trash cans outside of Pfizer to find out if their new drug causes cancer or not.

No, we serve a different role. We try to take both sides of the story, suck out the spin like venom from a snakebite, and give you the core of the matter. We don’t do this to influence you to one point of view or another.

In fact, you’d be surprised at the diversity of opinion in our office. We’re pretty evenly divided in terms of political affiliation, and I’ve yet to see a social issue that everybody around here agreed upon wholeheartedly. But there is one thing that we do agree upon, without hesitation.

Our job is to provide you with a clear analysis of the stories that matter -- not to change your opinion to conform to ours, but to make those stories useful… to determine ways to take advantage of events, or to utilize cracks in the system.

We don’t report about Israel and Hezbollah to cast blame or point fingers; we do it because understanding what’s happening there, understanding everything from the sequence of events to the way those events are being reported, is crucial to understanding the markets. It’s crucial to understanding the oil industry and the pharmaceutical industry and the tech industry.

Put the News to Work for You

The goal of news is to help form your opinion. Our goal is to make that news useful to you. We’re here to tell you how world events, even ones halfway across the globe involving people you’ll never meet, can impact your life -- and maybe latch on to them, to change your life for the better.

And in some cases, that means understanding the system itself. I’ve been talking about the news media so far, and clashes and consolidations of the news media as a whole. Now let’s broaden that picture. Let’s look at media, with a lowercase “m.” Let’s look at the way that we take it in.

A few years ago, it was the height of the free music era. Everybody under 25 had Napster, or something like it, and was voraciously absorbing song after song.

Nowadays, you can’t really find free MP3s anymore. But you can go to YouTube and watch the same music, with video, for free. People are making home movies, posting them there, and getting jobs in the entertainment industry based on them. More people have come up to me to talk about the “OK Go” treadmill video this week (search YouTube if you haven’t seen it) than about anything you’ll see on CBS primetime.

The same people that funded Google, back when it was a start-up, are now firmly behind YouTube. Nobody has a clue what its value actually is, but I guarantee you, it’s breathtaking. And that value comes right from the people. It’s value isn’t in the content it puts up -- you could get most of that content for free from other sources -- but it’s user base. It comes from the fact that people spend time browsing around YouTube, taking in material they’d never have intentionally searched for. It comes from the fact that it is a form of democratic media.

The Next Media Revolution

You can see this effect all across the Internet. Flickr has done for images what scrapbooks have been failing at for decades. Studios like NBC are attracting more viewers by posting their new shows on iTunes than by flooding the airwaves with ads.

Recently, social networking site Facebook put itself up for sale for a reported $2 billion. (To put that into perspective, that’s higher than the market capitalizations of companies like Burger King, JetBlue, Oakley, Winnebago or Intermec.) The power of the people, the power of attraction and community, has amassed a remarkable premium.

The power base of media, small “m,” is shifting rapidly these days. The old guard is rapidly trying to keep pace, to adapt, to integrate these new modes into their established systems.

Understanding the changing landscape is crucial to every investor, and really, to every person that partakes in the system. And that’s what we’ll continue to strive to provide for you -- an understanding of the way business is done. A thousand years ago, it was simple: a bale of hay for an ear of corn, or a bar of gold for a new sword. These days, it’s a lot more complicated and it evolves in the blink of an eye.

Billions are made by companies that fill no physical space and sell no physical products. They serve a role in the system that has inherent value, and that value often comes simply from the communities of people that they draw.

That’s why services like YouTube or Facebook can command more value than an established retailer or up-and-coming manufacturer. They have changed the basic, day-to-day landscape. And tomorrow, it will change again.

As long as it does, as long as media and business keep evolving, we’ll be here. We’ll serve as your intermediaries in this new frontier, keeping you apprised of all of the new models and the next services you can’t live without. And we’ll make sure that you can use that knowledge to your own benefit.

Reporting From the Middle

The GRESSOR team has uncovered one of these paradigm-shifting applications. It’s the fastest-growing Web site on earth, and everybody from big companies to political candidates is sprinting to put it to use for their own purposes. The scary thing is that it’s horrifically undervalued -- it was bought for $580 million. Wall Street hasn’t realized the sheer value of the role this company plays in business, media and society, but I’ll guarantee you that they will. And when they do, that $580 million is going to look like pennies in a wishing well. You can read all about it here.

I’m glad you join us here, in between the Old and New Media -- the ridged edge of the coin -- and I promise you, as long as you do, we’ll keep making both sides work for you.

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Earnings Announcements

O2Diesel Corporation, China Yuchai International, Concurrent Computer Corporation, Tut Systems Inc, and Zi Corporation are releasing earnings.

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Upgrades and Downgrades

Advanced Digital downgraded by AG Edwards from “hold” to “sell.”

AMR Corporation downgraded by Calyon Securities from “buy” to “add.”

Banta Corporation upgraded by Robert W. Baird from “underperform” to “neutral.”

Brought to you by Red Zone Profits.

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