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The Future of Business Journalism
Why It Matters for Wall Street and Main Street
Chris Roush
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eBook - ePub
The Future of Business Journalism
Why It Matters for Wall Street and Main Street
Chris Roush
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About This Book
In the twenty-first century, business news has shifted its focus from local coverage to national news. In The Future of Business Journalism, Chris Roush shows the causes of this recent divide, its impact on local businesses, and how the field can once again provide the content a broad society needs to make informed financial decisions.
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Information
Part I
CAUSES OF THE INFORMATION GAP
Going back in history can be illuminating in exploring how things change and seeing how parts of society have changedâfor good or badâand affected how we live.
In this case, looking at the history of business journalism shows that, decade after decade, news stories and other content helped all businesses and consumers. For example, in the mid-nineteenth century journalist Henry Varnum Poor helped expose railroad companies with questionable finances and business plans, weeding out the businesses that just wanted to scam investors. At the turn of the twentieth century journalist Ida Tarbell documented how the Standard Oil Company was forcing smaller operators out of business, leading the US Supreme Court to declare it a monopoly and order its breakup into smaller companies. At the same time, Upton Sinclair exposed the meatpacking industry for its unsafe working conditions and its unhealthy products, leading to reforms that benefited workers and meat eaters.
Fast forward to the 1960s, and Rachel Carsonâs Silent Spring detailed how chemical companies were releasing pesticides and other products into the environment that were killing animals and, sometimes, people. Ralph Naderâs Unsafe at Any Speed led to changes in how the automobile industry made cars, improving safety for consumers and indirectly helping the auto industry better compete against foreign competitors.
These were all business stories that had broad effect on consumers, businesses, and customers. But in the past decade or so, business news has shifted. Yes, there are still stories that have broad appeal across the spectrum of small businesses, large businesses, their employees and customers. But increasingly the business news that dominates society today focuses on the big companies and the machinations of Wall Street, not Main Street.
As companies become bigger and bigger, and as many media organizations that serve towns and cities decrease their news content and their staffs, the business newsâwhoâs hiring, whoâs expanding, whoâs looking to move into a new product lineâthatâs important to smaller businesses and consumers has been primarily ignored. The business news that they get is often not relevant because itâs about bigger corporations and major economic factors that donât impact the operations of smaller companies or the wallets of customers and employees.
The first part of The Future of Business Journalism examines how this shift happened, looking at some external factors that have hurt business journalism. Itâs not just one or two changes but a combination of eventsâ from the decline of daily newspapers to the more adversarial approach taken by many company executives and public relations professionals who have forgotten that the media have helped in many ways that have been quantified for decadesâthat have led us to this point. Social media and political polarization have also played a big role in the lack of business news that society needs to grow and thrive.
If youâre a business owner, an employee, or a consumer, youâre probably unaware that many of these changes have impacted your ability to make good, sound financial decisions. These changes have evolved over years and sometimes decades. Read on to realize how youâre not getting the news you need.
1
A SYMBIOTIC RELATIONSHIP
To understand the importance of business journalism to businesses and consumers as well as why the field is so important, letâs look at the history of how businesses used journalism and media to develop and grow, and how business news impacts what society thinks about companies and the economy. Both topics show how critical business news is to all types of readers, listeners, and watchers.
The importance of business news and information to companies and economies has been shown to be vitally important for centuries. Weâve seen time and time again that ânewsâ has helped societies thrive and grow across the globe, and such information has allowed businesses and people to make decisions to improve themselves. Yet, in a dramatic shift from the past, specific businesses and executives have recently rebelled against news and information when it does not cater to their goals. This is despite research showing that coverage helps build companiesâ brand name recognition and could even help their performance when they have an initial public offering.
In addition, academic research has shown that business media play an important role in markets, providing details about what investments and companies might be good places to put money into or bad places to take money out of. Such news coverage, even if it is neutral, has been shown to help provide information to society, and a decline in pertinent business news is harmful to consumers. Business news and information also helps good companies because it exposes their unethical and illegal competitors.
A BRIEF HISTORY OF THE RELATIONSHIP BETWEEN JOURNALISM AND BUSINESS
The development of journalism and mediaâthat is, communicationsâgoes hand in hand with the development and growth of companies. At the beginning of civilization, man communicated about economic issues using cave drawings, argues David Forsyth.1 The Code of Hammurabi of ancient Mesopotamia included interest rates and minimum wage laws among its guidelines for ancient society. In Greek civilization shortly before Christâs birth, business information was recorded on stone. After being conquered by the Romans, the Etruscans taught the Romans how to record business transactions.2 In China, Emperor Wang Meng instituted an income taxâ10 percent of revenueâon professionals that was widely documented during the first century. By the seventh century credit was produced on woodcuts in China due to a shortage of copper, which was used for coins.3 In the first millennium, kingdoms in Ethiopia and Eritrea used trading routes to provide economic information in addition to various goods.4 And by the thirteenth century, merchants had begun a basic bookkeeping system to keep track of transactions financed by loans.5
One of the first financial information advances occurred in the sixteenth century, when European banker Jacob Fugger began placing employees in important cities around the continent who would correspond with him to explain what was happening where they were. Historian George Matthews says these reports ârepresent the news as it might appear on the unedited, continuously moving tape of a press agencyâs teletype: true reports and false rumors, trivial occurrences and important events.â6 Writing more recently, author Greg Steinmetz argues that Fugger used this financial information, or news, to his advantage, becoming the richest man who ever lived, adjusted for inflation.7 Similar systems of financial letters developed around Europe, particularly in London, which replaced Antwerp, Belgium, as the commercial center of the continent as a result. Business historian Alfred Chandler and James Cortada argue in A Nation Transformed by Information that information about business has been a vital building block in developing society and the economy since the 1600s.8
The early newspapers in both England and the American colonies were used primarily to disseminate business information. For example, an advertisement in a January 1727 issue of the London Gazette by a law firm offered a two-hundred-pound reward for a businessman who had gone bankrupt and disappeared.9 Many early British newspapers provided a way for business owners to sell their wares, including the cargoes of ships that were arriving at port. The London Post of July 22â24, 1700, included the number of tea tables, chests, and pieces of china as well as various teas arriving from China on the ship Sarah Galley.10
In the colonies as well, newspapers were used for business purposes. The Boston News-Letter of 1704 noted that its purpose was to provide for âpersons who have any lands, houses, tenements, farms, ships, vessels, goods, wares or merchandise to be sold or let.â11 Many early American newspapers used the word âAdvertiserâ in their name to convey that their primary purpose was aimed at helping businesses, not providing news. Seeing the growth of these newspapers, the British passed the Stamp Act of 1765, which levied a tax on the paper used by newspaper printers. The taxation of goods and servicesâfrom paper to teaâon businesses became the focal point of the American Revolution and of newspapers of that time.
The major newspapers in the eighteenth century and early nineteenth century throughout the Americas were called âprice currentsâ for a reason. Their front pages gave detailed listings of the current prices, usually split between domestic goods and foreign goods. Most of the rest of these papers included shipping information and advertisements from merchants. The first daily newspaper in the United States, Daily Items for Merchants, also included information such as insurance premiums and prices of freight. Today, weâd consider these newspapers as early versions of wire services such as Reuters or Bloomberg, providing news and data about the economy to traders and business owners.
In the nineteenth century newspapers and magazines developed around specific industries. The most prominent of these was the American Railroad Journal. Think of nineteenth-century railroad companies as the internet and software companies of the twenty-first century. They revolutionized business and rapidly increased the speed at which goods could be delivered. The American Railroad Journal, under editor Henry Varnum Poor, analyzed railroad companiesâ financial performance, turning its focus away from the engineering and technical aspects of railroads. His publication is considered the first to help investors in determining whether a company was a sound investment.12
Other business newspapers thrived, although the advent of the penny press led to more mainstream newspapers that contained news about crime and government in most cities. The Journal of Commerce was started in 1827 and included business news from around the growing country. The Wall Street Journal started in 1889 and would expand in the twentieth century to be a national newspaper. Today itâs the largest-circulation paper in the country, counting both print and online subscribers. Still, in the large city newspapers, business news was second only to politics during this time, with those papers allocating 22.9 percent of their coverage to business and labor, according to a study by Washington University professor Gerald Baldasty.13 And advertising helped many businesses gain additional coverage. After a department store ran full-page ads for a year, a St. Louis newspaper called the store a âmodel advertiserâ in an editorial.
Media coverage of businesses became more critical in the late nineteenth century and early twentieth century during the time of the muckrakers, demonstrating that business journalism could have an impact on society. Upton Sinclairâs exposĂ© of the meatpacking industry led to the creation of the US Food and Drug Administration. Ida Tarbellâs extensive reporting of the monopolistic tactics of the Standard Oil Company in McClureâs magazine led to the company being split up by the US Supreme Court. Other industries that received aggressive reporting included insurance and textile, and topics such as child labor were examined.
The creation of public relations or publicity managers occurred at around the same time. Westinghouse hired a journalist in 1889 to promote the company, and General Electric created a public relations department eight years later. The first public relations agency opened in 1900 in Boston. While initially these efforts led to additional information being released about companies, companies began using public relations to promote thei...