NEWS WAR, Part 3
What’s Happening to the News

PRODUCED BY
Stephen Talbot

REPORTED AND CO-PRODUCED BY
Lowell Bergman

WRITTEN BY
Stephen Talbot
& Lowell Bergman

ANNOUNCER: Tonight on FRONTLINE-

- The job of a reporter is to be the curmudgeon who raises questions that nobody else wants to raise. That's what the best reporters try to do.

ANNOUNCER: Once upon a time, they were thought of as heroes, but today the entire news industry is in crisis.

- The public has a terrific disdain for the press.

- We have a press that is at war with an administration while our country is at war against merciless enemies.

- For 30 or more years, there'd been an assumption about the government and the press, and suddenly, in the last couple of years, that's changed.

ANNOUNCER: In a four-part special series, FRONTLINE reporter Lowell Bergman looks at the challenges facing journalists today-

LOWELL BERGMAN, Correspondent: Would you to go jail to protect your source?

- Absolutely.

ANNOUNCER: -the war between the White House and the press-

- the president of the United States saying, "If you publish this story, you will have blood on your hands."

ANNOUNCER: -the explosion of new and emerging media-

- Do you ever feel like the 6:00 o'clock news just ain't cutting it for you?

- You don't see anybody between 20 and 30 getting their news from the evening news, you see them getting it on line.

ANNOUNCER: -and the economic realities of today's news business.

- You have to make more every year to keep the shareholders happy.

ANNOUNCER: How did we get here?

- We're judging journalism by the same standards that we apply to entertainment. That may be one of the greatest tragedies in the history of American journalism.

ANNOUNCER: And what is at stake?

- There's a dire need for institutions that tell the truth, that pursue the truth, and that chase it at all costs.

ANNOUNCER: Tonight, Part 3 of News War, a FRONTLINE special series.

NARRATOR: These days, one of the country's most influential news programs is not a news program at all. It airs on the Comedy Central channel.

JON STEWART, Host: Welcome to The Daily Show!

NARRATOR: Each night, The Daily Show With Jon Stewart relentlessly parodies broadcast news.

JON STEWART: Target USA!

NARRATOR: The night we visited the show, they were skewering CNN for its fevered coverage of the latest terror threat.

CNN ANNOUNCER: Get the facts, not fear. CNN security watch.

JON STEWART: Facts, not fear. Not fear! Even though we're using the fear music, with the fear voice, and the fear font! That's to get your attention so we can tell you, "Everything's cool. Don't be afraid."

NARRATOR: This is what Stewart's audience has come to expect, a raucous dissection of the content and conventions of TV news. Sometimes it even makes news of its own. Politicians show up to be interviewed, from former president Bill Clinton to President Musharraf of Pakistan.

JON STEWART: Where's Osama bin Laden?

Pres. PERVEZ MUSHARRAF, Pakistan: I don't know. Do you know? If you know where he is, you lead on and we'll follow you.

NARRATOR: A few years ago, America's TV critics declared this comedy show to be the best news program on television, to the dismay of the show's producers.

DAVID JAVERBAUM, Exec. Producer, The Daily Show: To the extent that people look to us as a source of news, that is 100 percent indicative of other people's failure and not our success.

CNN ANCHOR: Now, of course, we don't want to give any wannabe terrorists any ideas here on how to concoct a bomb-

GUEST EXPERT: No, we're not-

JON STEWART: We don't want to tell the terrorists what to do. That's coming up next in "The Situation Room."

DAVID JAVERBAUM: I personally, through working at this job, have come to feel that the news media is even more depressing than the news it attempts and fails miserably to report. I think it's horrible news, broadcast horribly.

JON STEWART: That's our show. Here it is, your "Moment of Zen."

NARRATOR: For all the jokes, something serious is happening to the news, and not just on TV. In the age of the Internet and corporate media giants, the whole business of gathering and reporting the news is in turmoil.

FRONTLINE reporter Lowell Bergman set out to investigate what's happening to journalism, how new technology and the media marketplace are threatening serious reporting and changing the very definition of what we call news.

This recent episode of ABC's Primetime didn't just document bad behavior in restaurants, it added something extra.

ABC CORRESPONDENT: But these diners haven't seen anything yet. What will they do when the couple at the next table gets affectionate?

NARRATOR: Using hidden cameras and hiring actors has also led to a series of highly-rated scenarios ABC News calls "Basic Instincts."

ABC CORRESPONDENT: What would you do if you're taking a stroll in the park and you notice an elderly man in a wheelchair, his caregiver being verbally abusive, getting physical, even violent? Would you keep on walking by? Would you call 911?

NARRATOR: This ABC News story focused on moms and students who strip. Critics argue that the network, owned by the Walt Disney Corporation, is being pushed to get higher ratings by producing entertainment programs dressed up as news.

DAVID WESTIN, President, ABC News: It's easy to oversimplify. You know, network news has just gone soft and it's because of a profit motive. And it makes a really good story that particularly people in print like to write. I think the subject is more complicated than that and more subtle than that.

LOWELL BERGMAN: In what way?

DAVID WESTIN: I think, in fact- I think the soft/hard distinction is much harder than people would like to make it out to be. The profit motivation is clearly an issue in the sense that we need to return some reasonable amount of income to Walt Disney Company. By the way, the Walt Disney company knows, and will say if you push them, they don't expect us to help their stock price.

LOWELL BERGMAN: No, what I mean is, I look on the Web-

DAVID WESTIN: Sure.

LOWELL BERGMAN: -and you see your programming, for- let's say, for Primetime.

DAVID WESTIN: Right.

LOWELL BERGMAN: -and it's "Teenage Girl Gets 10 Years for Oral Sex" or "Guides to Teenagers for Dating." That's news?

DAVID WESTIN: Well, I think news is what matters to people. I think that really is- true information about what matters to people is news. I mean, you tell me-

LOWELL BERGMAN: But not current affairs. I mean, this is all information, but there was a time, at least in my lifetime, when that would not be considered news. Has the standard for what qualifies as news changed primarily because of the pressure of profits and ratings?

DAVID WESTIN: No. The standard has changed, and it's broadened, not lowered, because I will find you what you would perceive as a noble, serious news piece to match every one of the examples that you pick out of what you find ignoble. So it's broadened, not lowered, but it's changed-

LOWELL BERGMAN: I'm not saying it's ignoble. I'm saying- by the way, I didn't say that. I'm saying it's different. It's not news.

DAVID WESTIN: It's changed because there are a wider number of outlets. We have 31 hours of programming, plus we have radio 24 hours a day, plus we have now a Web site, so there's a wider range of topics covered, absolutely.

NARRATOR: At ABC news, there has been a tradition of news documentaries and specials, as well as some serious work on their magazine shows. And today at ABC, at least one investigative reporter is upbeat about the future. Brian Ross and his team have been given a big staff and budget to produce investigative stories for all of the ABC News programs.

BRIAN ROSS, Chief Investigative Reporter, ABC News: In today's network news landscape, as I understand it, what really distinguishes one network from another is original reporting.

LOWELL BERGMAN: But you know some of the other stories that are on the magazine shows.

BRIAN ROSS: Right. Cover a wide range of topics.

LOWELL BERGMAN: That's the first smile I've gotten. Why is that?

BRIAN ROSS: There are lots of stories, you know? And I- and a lot of stories that I wouldn't necessarily do, but you might watch. Don't know. I mean, I- I respect that, you know, in the primetime area, there's a full range of stories. And I think that's perfectly fine and healthy.

NBC ANNOUNCER: This is Dateline this week. Tonight on Dateline, it's a whole new parade of suspected predators-

NARRATOR: ABC News says it turned down this program designed to catch alleged sexual predators, but it was picked up by NBC News. "To Catch a Predator" is controversial. NBC News is working directly with the police and has a financial arrangement with the advocacy group doing the sting operation. But NBC defends it as "public service investigative journalism."

NBC CORRESPONDENT: We set up a house, where a young teen-

JEFF FAGER, Exec. Producer, 60 Minutes: Dateline, over the years, they've done tremendous pieces and excellent reporting. They've gone away from it more in recent years, and I think part of it is because it's expensive. I think there is conventional wisdom that says that people are less interested in Iraq and more interested in that. It's a different kind of reporting. It's a niche that they've found, and I think they've done better with it than just about anything else they've tried in recent years.

NBC CORRESPONDENT: Like moths to a flame, potential sex predators can't stay away.

NARRATOR: It's a ratings hit, and very profitable. NBC turned down FRONTLINE's requests for an interview.

NBC CORRESPONDENT: Sir, I want to talk with you before you take off.

TED KOPPEL, ABC News, 1963-'05: To the extent that we're now judging journalism by the same standards that we apply to entertainment - in other words, give the public what it wants, not necessarily what it ought to hear, what it ought to see, what it needs, but what it wants - that may prove to be one of the greatest tragedies in the history of American journalism.

NARRATOR: These days, it takes a movie to remind people about the public interest origins of television news.

EDWARD R. MURROW: Good evening. A few weeks ago, there occurred a few obscure notices in the newspapers about a lieutenant-

DAN RATHER, CBS News 1962-'06: Well, when I first came to CBS, the central thing that impressed me was their spirit of mission, to do quality news of integrity in the public service.

EDWARD R. MURROW: We're impressed with the importance of this medium. We shall hope to learn to use it and not to abuse it.

DAN RATHER: And that permeated the halls of CBS News. You could smell it, see it, hear it, feel it. I would say the strongest early reaction was what a powerful sense of mission these people have.

NARRATOR: It wasn't just a sense of mission, public service was mandated by the government.

TED KOPPEL: In the very early days of television news, the FCC still had teeth and still used them every once in a while. And there was that little paragraph, Section 315 of the FCC Code, that said, "You shall operate in the public interest, convenience and necessity." And what that meant was you had to have a news division that told people what was important out there. They didn't expect the news divisions to make money. Then one day, along came this new program on CBS.

MIKE WALLACE, CBS News: I'm Mike Wallace.

MORLEY SAFER, CBS News: I'm Morley Safer.

DAN RATHER, CBS News: I'm Dan Rather.

TED KOPPEL: And it wasn't an immediate success, but after two or three years, 60 Minutes started to do something that no news program had ever done before: It began to turn a profit.

DAN RATHER: These Afghan clothes I'm wearing are part of an operation to sneak me and a CBS News film crew into Afghanistan-

DAN RATHER: Here was a news program that was becoming a tremendous profit center. And people in the corporate entity began to say, "Wow. You know what? News can make money. And not only can it make money, it can make big money."

TED KOPPEL: And so 60 Minutes begat 20/20, and 20/20 begat Dateline, and Dateline begat Primetime Live, and there was a biblical epoch of begatting that went on in the television industry. And now, all of a sudden, making money became part of what we did.

NARRATOR: Then in the '80s, with Reagan-era deregulation, there was a series of corporate takeovers. Capital Cities bought ABC, General Electric bought NBC, and Larry Tisch of the Loews Corporation took over CBS.

TOM BETTAG, Fmr. Exec. Producer, CBS Evening News: And Tisch looked at a very fat CBS and said, "I'll bet that I can cut 33 percent of this organization out and deliver a product that is 90 percent as good. And if I can do that, I can make Wall Street incredibly happy, I can make my stockholders happy, and that's what business is about.

NARRATOR: In 1987, Tisch ordered the biggest budget cuts in the history of CBS News.

LOWELL BERGMAN: This period in the '80s, where you have deregulation, you have- an experienced moneyman, Larry Tisch, comes in and cuts CBS News down to size, cuts you down.

DAN RATHER: I think the biggest difficulty was- and he said this in my presence once. He said, "Dan, your problem is you don't understand business. You're a good reporter. I'm glad you're with us. But you don't understand business." Well, the difficulty was that Larry Tisch did understand business, but he didn't understand this business.

TOM BETTAG: When Larry Tisch left CBS, it was not the same news organization - by a lot - that was there when he came.

NARRATOR: The once top-rated CBS Evening News fell to third place, and has for the most part stayed there. The present owners are betting they'll find a new audience with a popular anchor, recently signed for $13 million a year.

JEFF FAGER: They're tough times. It really has been hard to cover the news and cover the world. I used to run the Evening News, and I know that the budget I had to cover the news was a lot more- was more significant than the Evening News has today. It makes it much more difficult.

NARRATOR: Most Americans still get their news from television, but the amount of hard news they're getting keeps shrinking.

KATIE COURIC, Anchor, CBS Evening News: -an exclusive first look at Vanity Fair's newest cover girl-

NARRATOR: Cable television initially came along as a serious 24/7 news alternative, but competition has pushed it away from original reporting.

WALTER ISAACSON, Former CEO, CNN: I think what happened around the year 2000 was you had many more outlets. You could have dozens or more cable stations. You know, you could have talk radio. And in order to stand out in an environment like that, you didn't have to get a broad-based audience the way CBS Evening News with Walter Cronkite saying "That's the way it is" would do. You really just had to get a passionate and sometimes narrow audience. And to get that, it worked better to be opinion-based.

At CNN, at Time Warner, and with people that I've worked with our whole lives, we really wanted to say, "Opinion-based journalism has its role, but we still want to have reporter-based journalism in some places. And that's what Time magazine should be. That's what CNN should be.

GLENN BECK, CNN Headline News: There are illegal immigrants pouring into the United States, most of them here in California, by the hundreds of thousands each and every year-

NARRATOR: But in recent years, even CNN has been trending more toward opinion and commentary.

LOU DOBBS, CNN: American farmers tonight are complaining that they are being unfairly burdened by laws that-

ARIANA HUFFINGTON, Huffingtonpost.com: Most people know this is an act of desperation-

TED KOPPEL: Simply passing on rumors is not journalism. Simply telling people what you think they want to hear is not journalism.

NANCY GRACE, CNN Headline News: Art, Art, Art! What do you mean?

GUEST: Well, I mean-

NANCY GRACE: Will an embalmed body yield pure evidence? People are exhumed all the time!

DAN RATHER: The effect has been to drain out the sense of public service out of television news and to the point where it's almost completely gone.

NARRATOR: 60 Minutes remains the most popular news program on television. It's always managed to keep a mix of serious reporting together with celebrity profiles and soft features. But the show's new executive producer, Jeff Fager, says his audience is aging, like that of all network news, and he's looking to the Internet for his future.

STAFFER: Hey, Jeff, they're working on the Yahoo! piece for this week, which is going to be, as we discussed, Netflix.

JEFF FAGER: I don't think we've seen the model- I know we haven't seen the model for how broadcast journalism is going to end up on the Internet. But it has to go there. It has to. I mean, you don't see anybody between 20 and 30 getting their news from the evening news, you see them getting it on line.

NARRATOR: So Fager did a deal with Internet giant Yahoo! to help bring 60 Minutes to a new Web audience.

SCOTT MOORE, Head of News, Yahoo!: Jeff Fager, who runs the operation, is actually somewhat visionary, I think, at least for a big old-line broadcast news division, in terms of thinking about how to evolve the brand. They know that 60 Minutes, while it is a real crown jewel of American journalism as a brand and as a franchise - there's no question about that - but they know that their audience is, you know, 55 and up.

NARRATOR: Starting with this profile of Tiger Woods, Yahoo! began posting some of 60 Minutes's mostly lighter, more popular stories, along with footage that didn't make it on air. All of it is chopped up to appeal to Yahoo's younger, Web-savvy audience.

SCOTT MOORE: People that are consuming news or other information on line do so in a mode that we refer to as "info snacking." So they'll read a piece or they'll read part of a piece, and then they'll see a link. They'll follow that link. They'll go read that thing. So by taking the content that we got from 60 Minutes and chunking it into, you know, two to four-minute segments, we just gave a much richer experience.

LOWELL BERGMAN: And what's the result then in terms of- has it driven new viewers to the show?

JEFF FAGER: I can't tell. It's too early to tell if it has. But millions of streams have been played in the first few months that we've been on Yahoo!, 20 million streams in two months, which is a lot.

NARRATOR: The question is whether this Web experiment will help pay for the more serious journalism on 60 Minutes.

LOWELL BERGMAN: Our reporting shows that the revenue coming to CBS, for instance, as a whole, as a company, from the Internet is like this, compared to the revenue that's coming from normal advertising.

JEFF FAGER: Yeah.

LOWELL BERGMAN: This is in its infancy, really, from an economics point of view.

JEFF FAGER: It is. It is. I mean, you see the figures in terms of advertising on the Internet, though, and they're up 30 and 40 percent a year. So everybody, I think, is crossing their fingers that we start to make real money on the Internet. Right now, we're not. Right now, we're barely breaking even on the Internet.

LARRY KRAMER, The Washington Post, 1977-'86: I think the biggest cause for tumult right now is that the economic underpinning for all these news organizations is changing, and it's changing because the audience is changing.

NARRATOR: Larry Kramer, a veteran newspaper reporter and editor, became rich figuring out how to do news on the Internet when he created Marketwatch.com. Now he's trying to help CBS figure out its digital future.

LARRY KRAMER: The audience are much more in command of when they want news and information, and they can go and get it. And we can't, as newspapers or television or radio, ignore that fact. And if we want to be delivering the news to as many people as we- in 10 years from now, to as many people as we're delivering it to today, we'd better get on these new platforms. We'd better be delivering it, or someone else is going to.

[www.pbs.org: Read Kramer's extended interview]

NARRATOR: The biggest new player in the on-line world is undoubtedly Google, now said to be worth $148 billion. From its campus in Silicon Valley, Google has become a key link connecting Americans to their news.

ERIC SCHMIDT, CEO, Google: Being on line is the future. Many, many organizations have talked and talked about these changes, but the fact of the matter is, the time is now. People who bet against the Internet, who think that somehow this change is just a generational shift or something, miss that it is a fundamental reorganizing of the power of the end user.

NARRATOR: In this new media world, consumers are demanding news and entertainment when and where they want it, often creating it themselves. The old media are scrambling to keep up.

LOWELL BERGMAN: I'm an aging reporter who would be considered part of the mainstream media at this point. What can Google do for me or the kind of reporting that I've done over the years?

ERIC SCHMIDT: In the best case, there will be a small number of places that we will go five years, ten years from now, where tremendous reporting is being done, and people will pay for that. But the new reporters are not going to follow the traditional path. They won't be as tied to the traditional newspapers. They're going to be on-line reporters, bloggers, man on the street, that sort of thing, and they're now part of the whole news calculation around the world.

AMANDA CONGDON, Rocketboom: Hello, and good Monday, June 5, 2006. I'm Amanda Congdon, and this is Rocketboom.

NARRATOR: Rocketboom is part of this new universe of on-line media, a short, daily Webcast of news and humorous feature stories presented in mock TV-news style.

AMANDA CONGDON: Ever feel like the 6:00 o'clock news just ain't cutting it for you?

ANDREW BARON, Creator, Rocketboom: Currently, we have around, between 400,000 and 500,000 daily downloads of our videos. And if we have, like, a really exceptional episode or one that, you know, strikes a larger chord than normal, it could be up to a million.

ROCKETBOOM NEWSCASTER: Donald Rumsfeld pledged to pursue additional opportunities to outsource-

NARRATOR: Rocketboom has as many viewers as some cable news shows, but they do it on the cheap.

ANDREW BARON: Well, most of the history of Rocketboom, we've used one camera and one laptop and two lights. And so each day, you know- having had those already laying around, you know, to start up, we really didn't need anything but just household stuff, like scissors and tape.

You can put it up on a Web site or put it up on line, and then in a moment, it's available to everybody in the whole world.

ROCKETBOOM NEWSCASTER: We go to Central Africa today, thanks to Ruud Elmendorp, who sent us some extremely rare footage.

RUUD ELMENDORP: Mr. Kony, what about the atrocities?

JOSEPH KONY, Lord's Resistance Army: Those atrocities which happened in Uganda, that is not me or that is not my people-

NARRATOR: While Rocketboom does feature actual news, like this story about a rebel army in Uganda, their choices are random, whatever strikes their fancy that day.

ANDREW BARON: We never considered ourselves journalists or- I mean, I've never studied journalism at all and have never been interested in journalism or even really given it much thought. You know, I haven't thought through the kinds of things that journalists are supposed to think through. Nevertheless, the activity that we're doing, people are identifying it as acts of journalism. Whether it is or it isn't, it's creating a conversation about what is journalism.

AMANDA CONGDON: I am about to go and interview Josh Wolf, who has been jailed for independent journalism-

NARRATOR: Amanda Congdon left Rocketboom and took to the road to meet other "citizen journalists."

JOSH WOLF: As you probably know, I shoot a lot of political protests for my blog. It's kind of my beat that I cover.

NARRATOR: It's a rapidly expanding network. Here in Las Vegas last year, over a thousand people showed up for a convention called the Yearly Kos. At the center of it all is Markos Moulitsas, the founder of one of the most popular blogs on the Internet, the Daily Kos.

MARKOS MOULITSAS, Founder, Daily Kos: People want to be part of the media. They don't want to sit there and listen anymore. They're too educated. They're taught to have initiative and be go-getters and not to sit back and be passive consumers. And the traditional media is still predicated on the passive consumer model. You sit there and watch.

NARRATOR: As someone who writes a highly personal and opinionated blog that's become a rallying point for liberals, Moulitsas doesn't accept the traditional boundaries between journalism and activism.

MARKOS MOULITSAS: One of many beauties of what I'm doing, this citizen media blogging world, is nobody's going to tell me what I can or cannot do. I can do whatever I want. If tomorrow I want to write a poem and be a poet, then tomorrow I'll write a poem and be a poet, and nobody can tell me I can or can't do that. And I think it's one reason people have really taken to this medium because they don't like to be told what they can or cannot do.

JEFF JARVIS, Blogger, BuzzMachine: Not all bloggers want to be journalists. The Pew recently did a survey and found that about 33 percent of bloggers think they're doing anything related to journalism. The rest are just people talking. And that's how I define blogs. Blogs are people talking. But then above that, yes, some people do choose to do journalism. They find out something and they report that to the world, and they do it accurately and they do it fairly and they do it completely, and you can have the exact same standards as a journalist.

AMANDA CONGDON: I am here with Jeff Jarvis, founder of Buzzmachine.com, former critic for TV Guide and creator of Entertainment Weekly. Hi, Jeff.

JEFF JARVIS: Hi, there, Amanda.

NARRATOR: Blogger Jeff Jarvis is one of the leading advocates for a new digital democracy where anyone with a laptop or a cell phone can be a reporter.

JEFF JARVIS: Journalists aren't the only ones with a license to operate journalism. Anyone can perform an act of journalism. I think it's a big mistake to define journalism by the person who does it. Anyone can do journalism. When you witness news and you can now capture on your phone, you can share that with the world on the Internet, you're performing an act of journalism.

LOWELL BERGMAN: Well, doesn't it make the term journalism almost meaningless? I'm a teenager and I'm walking down the street and taking pictures on my phone- that's an act of journalism?

JEFF JARVIS: Sure. If you're finding out something that the world doesn't know and wants to know and you tell them, yes. Why does it have to be the exclusive purview of somebody who has a job and a suit and a tie and a notebook? That's ridiculous.

NICHOLAS LEMANN, Dean, Columbia U. School of Journalism: All that citizen stuff is valuable. There's no reason not to have it. But I don't see it producing- I see it producing an effusion of commentary, which is healthy in a free society, but I don't see it producing lots and lots and lots of new information.

NARRATOR: In a provocative piece published in The New Yorker last year, Nick Lemann praised on-line magazines like Slate and Salon, but he challenged Jeff Jarvis' claims about blogs and citizen journalism.

NICHOLAS LEMANN: I compared them, infuriatingly to Jeff, to church newsletters. Nobody's against church newsletters. They're fun to read. They're, you know, just comment- they're like a community bulletin board.

LOWELL BERGMAN: Yeah, but you're belittling them.

NICHOLAS LEMANN: Yes, I am belittling them in that sense. I mean, I'm belittling them-

LOWELL BERGMAN: You're looking down from on high here in uptown Manhattan on the-

NICHOLAS LEMANN: Yeah, fair enough.

LOWELL BERGMAN: -heights with Columbia University and saying, "You guys are like a church newsletter."

NICHOLAS LEMANN: It is, in fact, true that there isn't a lot of original reporting that's being done by bloggers and citizen journalists, at least in comparison to their numbers.

LOWELL BERGMAN: Reliable reporting.

NICHOLAS LEMANN: Reliable and original reporting, sort of digging out new stuff instead of sort of reprocessing the stuff that other people have dug out already.

LOWELL BERGMAN: Nick Lemann says, "Show me where on the Internet this vast group of citizen journalists has actually done some really strikingly new journalism."

JEFF JARVIS: We're seeing the beginnings of it. And I would hope his response would have been, "How can I find ways to do more of it with them?" I don't think we're very far along on the path of the development of blogging and journalism. I think there's much more to be done. But I don't think it's just about reporting one story, it's also about setting the agenda. It's also about keeping stories alive and telling mainstream media what they ought to be doing.

[www.pbs.org: More on citizen journalism]

NARRATOR: For bloggers, this was a defining moment.

Sen. TRENT LOTT (R), Mississippi: When Strom Thurmond ran for president, we voted for him. We're proud of it! And if the rest of the country had followed our lead, we wouldn't have had all these problems over all these years!

NARRATOR: In 2002, while celebrating Strom Thurmond's 100th birthday, Senator Trent Lott essentially endorsed Thurmond's old segregationist policies. But no one in the national media took notice...

JOSH MARSHALL, Blogger, Talking Points Memo: So when you unpacked what Trent Lott said, it was really egregious. It was terrible. But no one did unpack it. And most of the news media just ignored it.

NARRATOR: Josh Marshall wrote for newspapers and magazines before starting a popular liberal blog, the Talking Points Memo.

JOSH MARSHALL: In the way that the news media works, a story really has a 24-hour audition, that it makes its case whether it's going to catch fire and whether its going to become a real story. And that story failed its 24-hour audition. And that would have been- I think in a pre-blog world, that would have been the end of it. But my blog and others picked up the story and basically started making the case for it, that it was a lot more important than the rest of the news media had thought.

NARRATOR: Just two weeks later, Trent Lott resigned as Senate majority leader. It was an affirmation of the power of the blogs.

DAN RATHER, CBS Evening News: Good evening. There are new questions tonight about President Bush's service in the Texas Air National Guard in the late 1960s and early '70s and about his-

NARRATOR: In September 2004, bloggers struck again. This time it was conservatives taking on what they felt was a liberal mainstream media. When CBS News claimed to have incriminating documents about President Bush's National Guard service, it caught the interest of a conservative Weblog called Power Line. Scott Johnson posted questions about the story. Soon information that raised doubts about CBS's documents began streaming in from around the blogosphere.

SCOTT JOHNSON, Blogger, Power Line: We knew nothing. The information that we contributed was from people who did know something and who read our site or who were directed to our site during the morning or during the day. And it really illustrated something about the power of the medium, that it could draw on the expertise of so many people over such a short period of time.

DAN RATHER: Today on the Internet and elsewhere, some people, including many who are partisan political operatives-

NARRATOR: Dan Rather dismissed it as politics, but the bloggers persisted, and Rather ultimately had to retract the story.

DAN RATHER: At the time, CBS News and this reporter fully believed the documents were genuine. Tonight, after further investigation, we can no longer vouch for their authenticity.

SCOTT JOHNSON: The first question I had that day was, "Are we far out on the end of a limb that's going to be sawed out, and are we going to lose the credibility, whatever credibility we'd built up in the previous several years working on the site?" The question I had later that morning was, "How many times has CBS done this before and gotten away with it?"

DAN RATHER: It was a mistake. CBS News deeply regrets it. Also, I want to say personally and directly, I'm sorry.

NARRATOR: The bloggers claimed victory, and Rather was effectively pushed out after 44 years at CBS News.

[www.pbs.org: The impact of 'Rathergate']

LOWELL BERGMAN: Your departure from CBS, and CBS obviously not being happy with the story, in the end- how were you treated?

DAN RATHER: I think I'll let other people answer that. I'm looking forward, moving on. It's a fair question, but I'm not going to answer that.

VAUGHN VERVERS, Editor, Public Eye: Ever watched a television newscast and thought about what's been left out or overlooked? Ever wondered how decisions are made in the newsroom? Maybe right now you're asking yourself, "Who let this knucklehead on the air?"

NARRATOR: In the midst of the Rather debacle, CBS News tried to embrace the Internet.

VAUGHN VERVERS: It's called Public Eye, and it's one of those things called a blog.

NARRATOR: In an effort to be more transparent, CBS News now has a blog about itself which deals with journalistic ethics and answers viewer criticisms. It also posts video of its new anchor sharing her personal thoughts in a feature called "Katie Couric's Notebook."

KATIE COURIC: Hi, everyone. As I approach my 50th birthday, I've come to an important conclusion. People can be divided into two categories, those who rinse or wash their dishes before putting them in the dishwasher and those who don't.

NARRATOR: Over at ABC News, Brian Ross's investigative unit has started its own blog, a Web site called The Blotter, which they use to solicit anonymous news tips.

SIMON SUROWICZ, Producer, ABC News: Some people say, "FedEx wants to kill me," "My cat has disappeared," "My plumber is a crook." But somebody might say, "Do you really want to know a little more about Mark Foley? Because I don't think you have the whole story." And the rest, as they say, is history.

TERRY MORAN, ABC News: Florida Republican Congressman Mark Foley resigned today, effective immediately, after sexually explicit messages sent to underage boys surfaced-

NARRATOR: A major story that broke at the height of the midterm elections actually came about through tips to the Brian Ross Web site.

BRIAN ROSS: A producer I've worked with for years got a lead from somebody that there were some e-mails of a congressman hitting on a page. So we wrote the story. This was the first story right here. It went out. And it was a story that wouldn't probably have been on World News, "16-Year-Old Who Worked- Concerned About E-mail Exchange With Congressman."

[ABC "World News Tonight"] After we posted that story on line, we began to hear from a number of other pages, who sent these much more explicit instant messages. When the congressman realized we had them, he resigned, Terry.

LOWELL BERGMAN: Could this be the first news break on the Internet?

BRIAN ROSS: Sort of mainstream media newsbreak? I think it was. I think it was, a story that really developed and broke on the Internet, you know, by a mainstream operation, by ABC News.

NARRATOR: ABC News is also hedging its bets about what might prove popular on the Web. Just one click away from the Brian Ross investigative unit-

AMANDA CONGDON: Hello and welcome. I'm Amanda Congdon, video blogging for ABC News.

NARRATOR: Congdon has made the jump from a cult show on the Web to the mainstream media.

AMANDA CONGDON: So whip that camera out, let's reinvent the whole host-viewer relationship and truly make this a two-way street.

MSNBC ANNOUNCER: Remember when a mouse on your desk was hard to handle?

NARRATOR: At the start of the Internet boom, NBC was the first to try to make the move onto the Internet. They partnered with Microsoft and confidently announced the beginning of a new era.

ANNOUNCER: On July 15th, NBC News and Microsoft will revolutionize the way you get news.

NARRATOR: There was a lot of excited talk about convergence, the idea that TV stations, Internet companies and newspapers would combine forces and create profitable new synergies.

BILL GATES, Microsoft: We're going to really be able to change news making, to do something very unique.

TOM BROKAW, NBC Nightly News: We've now covered the world.

NARRATOR: Ten years later, MSNBC survived the dot.com crash and is now the number two news site on the Web, close behind the leader, Yahoo! Scott Moore, who used to run MSNBC, is now the head of Yahoo! News.

LOWELL BERGMAN: You see a future where Yahoo! might have enough profits to have its own reporters?

SCOTT MOORE: I think it certainly is possible. We could today, if we chose to, and we do have a couple of projects- Kevin Sites in the Hot Zone. We have another project coming out in January that's called Odd News Underground, and it involves a journalist who also writes songs. So it's a singing reporter, if you will, and he will be covering a number of very interesting sort of eccentric subject areas.

So we will experiment a little bit and we will innovate where we can with journalism, but we really don't need to go out and hire an army of reporters.

KEVIN SITES, Yahoo! News: If you witness something compelling and capture it on video, send it to us. It's your turn to tell the story.

NARRATOR: Kevin Sites, who had reported from Iraq and Afghanistan, was hired by Yahoo! as its first full-time video journalist.

LOWELL BERGMAN: Basically, are you it in terms of Yahoo!'s independent reporting staff?

KEVIN SITES: As far as the reporting face, going out and collecting the material, I'm it. But I've got a mission control team that helps me put all this together. In fact, they do put it together. They're the ones that actually post it on the net. You know, they're the catchers, getting all the information from the field and probably doing the heavy lifting.

LOWELL BERGMAN: So you're the pretty face.

KEVIN SITES: You're looking at it. [laughs] I wouldn't say it's the pretty one! It's the face. I think news organizations are much more willing to send out independent "sojos" - solo journalists like myself - into war zones. They don't necessarily want them to do what you're doing, you know, an extensive documentary, because they're not going to get the same kind of product.

NARRATOR: But Yahoo News depends primarily on the reporting of others, like the Associated Press and Reuters, which they pay for, unlike their rival, Google.

ERIC SCHMIDT, CEO, Google: We made an explicit decision not to get into the content business. We decided explicitly to let many people produce content, and we would develop advertising solutions that would help pay for the new content that they're building. And that's our focus.

NARRATOR: Google's news site is popular, but it's essentially a collection of headlines and links to newspaper reporting.

ERIC SCHMIDT: There's no question that we depend critically upon reporters reporting new facts, new stories, new ideas. Who's going to write it, if it's not the reporters? And almost all interesting news seems to start from a reporter on a beat in a country uncovering something or reporting their observations about what they're seeing.

NARRATOR: This is what worries longtime newspaper editor John Carroll, that the news we get from the Internet, like the news we get from television, is almost totally dependent on reporting done by newspapers, and newspapers are threatened.

JOHN CARROLL, Former Editor, LA Times: I'd estimate that roughly 85 percent of the original reporting that gets done in America is done by newspapers. They're the people who are going out and knocking on doors and rummaging through records and covering events, and so on. And most of the other media that provide news to people are really recycling news that's gathered by newspapers.

The Web opens up vast possibilities for good journalism and already has created many new voices that are valuable. I don't think we can turn this thing over entirely to bloggers and citizen journalists. They're valuable, but there are things they can't do.

NARRATOR: In a building in South Los Angeles, an old business continues to roll out the news the same way it has for over a century. For nearly all of its 125-year history, The Los Angeles Times was owned by one family, the Chandlers, until in 2000, when the latest generation sold it off. This is the story about what has happened to The Los Angeles Times. It's the story of American journalism and the turmoil going on inside newsrooms across the country.

It all began with an $8.3 billion deal that the Chicago-based Tribune Company hoped would be the start of a new media empire.

JOHN CARROLL: They bought Times Mirror newspapers, which included The Los Angeles Times and Baltimore Sun and Newsday and some others. At the time, I was editor of The Baltimore Sun, and they said, "Will you go out and be editor of The LA Times?" I said, "Maybe. What do you want to do with it?" And they said they felt they bought one of the crown jewels of American journalism and they wanted to keep it that way and build it.

NARRATOR: But Carroll had to deal with some big problems. Circulation had been slipping, and there'd been growing tensions between the newsroom and the last publisher. Carroll's first move was to recruit a managing editor from The New York Times, Dean Baquet.

DEAN BAQUET, Editor, LA Times: So we came in, and it was a newsroom that was down, but it was a hell of a newsroom. I mean, if I came in and said that- I would not say that I walked in the door or John walked in the door and picked it up off the ground. I think it was like a Ferrari that just needed to be reminded that it was a Ferrari. And that's what we did.

NARRATOR: Carroll and Baquet revived The Times's tradition of pursuing big, serious stories at home and abroad, in-depth investigations that serve the public interest and win journalism awards. Under their leadership, The Los Angeles Times won 13 Pulitzer Prizes.

DEAN BAQUET: I think that we won, in the course of the six years John and I were together, as many if not more Pulitzer Prizes than any paper in the country. Not that Pulitzer Prizes are a be-all and end-all, but for a paper that had a tarnished reputation, they were important. And I think they told the world that this paper is coming back, and they told the paper and the staff that we can run with anybody, we can compete with anybody.

NARRATOR: But in Chicago, the home of Tribune Company, the journalistic direction of The LA Times was not being celebrated by the company's major shareholders.

CHARLES BOBRINSKOY, Ariel Capital Management: The writers and editors of The LA Times want to have their opinions read by their peers across the country, by politicians in New York and Washington, by the people who give away Pulitzer prizes. That's not what readers want.

NARRATOR: Ariel Capital is one of Tribune Company's largest shareholders. Charles Bobrinskoy is vice chairman.

LOWELL BERGMAN: When Tribune bought Times Mirror, was that a good deal?

CHARLES BOBRINSKOY: It was a terrible deal, and the market knew it at the time. Tribune's stock declined dramatically on the day they announced they were buying Times Mirror. They overpaid. Everybody knew it at the time. It wasn't a good deal. And that, unfortunately, has been the beginning of a lot of the problems that we're suffering with today.

DAVID HILLER, Senior Executive, Tribune Co.: I'm actually one of the people who still think it was the right thing to do, smart strategically.

NARRATOR: David Hiller is a senior executive at Tribune and was one of the architects of the Times Mirror deal.

DAVID HILLER: There are a lot of things that happened after the merger that nobody at the time predicted, including a huge recession, terrorist attack, bumps along the way. But the core vision of what you could do by putting these great newspapers together was smart then, and I think it's smart now.

NARRATOR: But the deal didn't play out as they thought, and with circulation continuing to fall, Tribune needed to find savings at The LA Times. Printing and delivery account for 70 percent of the cost of producing a newspaper, so this is where they started cutting. But soon, Tribune also wanted cuts in the newsroom, which had become the second largest in the country.

DEAN BAQUET: It was clear that some cuts had to be made. I'm not sure that those were the right cuts, but at a certain point, if you're going to lead your newsroom and the publisher made a convincing case that we had to do layoffs, you do them.

JOHN CARROLL: They cost-cut every year. And for a while, it was fine because there really was considerable fat in the operation. But after a while, it began to damage the business side of the paper and its ability to keep the circulation up. It damaged the news side of the paper. It reduced the amount we were able to give the reader.

DEAN BAQUET: The cuts started to be sort of part of the life of the paper. And I think this is true in a lot of papers. It wasn't just layoffs, it was every few months- I mean, you'd start the year with a budget, and every few months, you'd re-budget and you'd cut more newshole, more space for news.

JOHN CARROLL: It was happening at an accelerating pace, and it was happening at a time when the paper was making lots and lots of money.

NARRATOR: The LA Times was taking in over a billion dollars a year, over $200 million in profits.

JOHN CARROLL: A typical newspaper makes a 20 percent operating margin. That's roughly double what the typical Fortune 500 company makes. People think of this as a poor, washed-up old business. It's not. It makes tons of money.

LOWELL BERGMAN: So what's the rationale behind that? I don't understand. I mean, why do you have to cut costs when you're making hundreds of millions of dollars?

JOHN CARROLL: Because you have to make more every year than you made the last year in order to keep the shareholders happy. And so even if you made barrels full of money one year, you've got to make more than that the next year.

LOWELL BERGMAN: The Los Angeles Times grosses over a billion dollars a year, and apparently over $200 million a year in profit. Is that about accurate?

DAVID HILLER: Yes.

LOWELL BERGMAN: It's a pretty good business.

DAVID HILLER: It's a very good business.

LOWELL BERGMAN: It makes a lot of money.

DAVID HILLER: Yes.

LOWELL BERGMAN: So what's the financial problem?

DAVID HILLER: The issue for the whole newspaper industry, not just The Los Angeles Times, is what's the financial trajectory of the business over time? Is it getting bigger or is it getting smaller? That's plainly the concern that the investors have and why Wall Street is being so harsh on newspaper companies at the present time.

LOWELL BERGMAN: Your stock, for instance.

DAVID HILLER: Our stock. But all Knight Ridder's stock until they were sold, New York Times stock, today McClatchy stock. The question is not about how you're doing today, but the question is, how are you going to be doing in the future?

NARRATOR: The big worry on Wall Street is that profits from newspapers will vanish over the next few years as the major papers lose advertising dollars to the Web almost as fast as they're losing readers.

LAUREN RICH FINE, Managing Dir., Merrill Lynch: Newspapers are not a growth business. The industry is under enormous financial pressure. And so to invest in these stocks with a very, very uncertain future is a challenge. And the advice that we've given our clients is to stay on the sidelines until we can figure out what the growth rate is, if there's a growth rate, but until then, you really don't need to own the stocks.

At one point at their peak, newspapers were generating close to 70 percent of their pre-tax profits from their classified advertising. Today, a good portion of help wanted classified has gone on line.

NARRATOR: People looking for cars, jobs and places to live are now going on line instead of browsing newspapers, and ad dollars are following those eyeballs.

LAUREN RICH FINE: It's just amazing what you can do on line. It's just better on line. That's ultimately why the newspaper industry is under pressure. Classifieds are better on line, period.

NARRATOR: One of the biggest players in the on-line classified ad business is based in a modest house in San Francisco. Craigslist began in the late '90s as an on-line community bulletin board set up by computer programmer Craig Newmark to service what he calls his "nerd subculture."

LOWELL BERGMAN: How big are you?

CRAIG NEWMARK, Founder, Craigslist: I tell people five-seven, but it's five-six-and-a half. Our little company has 24 people right now. We're in over 300 cities and around 35 countries, getting well over 5 billion pages views a month, and increasing all the time.

LOWELL BERGMAN: Can we say the company you started is now worth $30 million, $40 million, $50 million? Or more?

CRAIG NEWMARK: We actually don't know. I've seen current estimates anywhere from $250 million to $2.4 billion. I don't believe any of it. I don't care, except it's flattering. Who cares? We're not selling. It doesn't matter.

NARRATOR: There is almost no way for a newspaper to compete with ads on Craigslist because they're free, except for help wanted ads and apartment rentals in some cities, like New York. Newmark, whose site is one of the top destinations on the Web, says he did not set out to undermine the economics of the newspaper business.

LOWELL BERGMAN: By 2000, you're going pretty great guns. Things are expanding. Right?

CRAIG NEWMARK: Yes.

LOWELL BERGMAN: OK. Which means you're taking more revenue away, in terms of classified ads, from newspapers.

CRAIG NEWMARK: Well, it's not clear because as far as we can tell, a lot of the ads posted on our site would never have gone to newspapers. Depending on whose opinion you agree with, a lot of the ads that aren't going to newspapers are going to sites like Monster and Autotrader.

LOWELL BERGMAN: But it's the flight of that kind of advertising to various Internet sites that's beginning to make a big impact on newspapers.

CRAIG NEWMARK: I agree.

ERIC SCHMIDT, CEO, Google: One of the unintended negative consequences of on-line advertising has been the loss of value in traditional classifieds. It's really affected the economics of newspapers. No one has yet figured out a way to fill up all that money with a different source to help pay for the newspapers.

LOWELL BERGMAN: So a major newspaper, like The Los Angeles Times, for instance, is under stress because of the change in economics related to the Internet. But yet they are a content provider for you, right?

ERIC SCHMIDT: We're, in fact, critically dependent upon the success of these newspapers. So anything that screws up their economics, that causes them to get rid of reporters, is a really bad thing. The fact of the matter is that the consumption for news is up, but the way in which people consume news has changed, and it's affected newspapers in a business sense pretty negatively.

[www.pbs.org: Read Schmidt's extended interview]

LOWELL BERGMAN: Why don't you just buy The LA Times and save that content-producing organization as part of your operation and make them more Web friendly and preserve an institution?

SCOTT MOORE, Head of News, Yahoo!: My personal opinion is, I don't- I'm not eager to take that challenge on, to try to adapt a business that is mature or in some slight decline and try to make that transition to the Web.

LOWELL BERGMAN: It's old.

SCOTT MOORE: We don't have to. Well, it's old, and any business that is mature and is kind of, you know, beginning to be usurped by some new technology or some new means of distribution is going to face big challenges and is going to have a lot of hard decisions to make.

NARRATOR: Back in Los Angeles, pressure for cuts kept coming from the Tribune Company. In July 2005, editor John Carroll resigned.

JOHN CARROLL: I was pushing people out the door, reducing staff and reducing pages in the paper, which no editor likes to do. That was something that can't go on forever, and it was really crucial to why I decided to leave the paper.

NARRATOR: Dean Baquet was now editor and was facing what he hoped would be a last round of cuts with the new publisher, a long-time Tribune executive, Jeff Johnson.

JEFF JOHNSON, Former Publisher, The Los Angeles Times: As publisher, I knew, as we kind of came to the end of 2005, that we had to do what I called some restructuring. And we went through some difficult decisions. We closed one of our printing plants. We cut about 350 jobs out of the newspaper across the board, and a little less than 100 of those were out of the newsroom.

NARRATOR: Johnson had been sent out from Chicago to handle the business side of the paper, but now he began to have second thoughts about the newspaper's priorities.

DEAN BAQUET: Here's what I think happened with Jeff. He goes from being on the business side, an operations guy. He takes on the publisher's chair, and you know, suddenly, your concerns are supposed to widen. You're supposed to care about the newsroom. You're supposed to care about the mission of the paper. He got that. And he just grew.

NARRATOR: In September 2006, the fight to save The LA Times went public, as a group of prominent citizens sent an open letter to the Tribune Company, protesting further staff cuts. Just a few days later, publisher Jeff Johnson publicly defied his bosses in Tribune management, saying, "Newspapers can't cut their way into the future."

LOWELL BERGMAN: You've been at the company for 20-odd years. And I got to believe, at a certain point, when you started arguing with or disagreeing with your superiors in Chicago, you knew you were taking your career in your hands-

JEFF JOHNSON: Sure.

LOWELL BERGMAN: -and maybe throwing it out the window, at least at the Tribune Company.

JEFF JOHNSON: Sure. I knew there was that risk, right.

LOWELL BERGMAN: Why did you decide to do that?

JEFF JOHNSON: I think that industry has to be careful to not let cost-cutting be your main strategy. You're going to have to get smarter about, you know, the business and, you know, find efficiencies and at times re-structure to reflect what's going on out there, but you've got to have- what do you believe in? What are your primary goals? That's what you- what do you tell the troops? I mean, you can't stand up in front of the troops and say, "We're going to cut our way into the future," right?

NEWSCASTER: Big changes at The LA Times. One month after he defied a demand for staff cuts, the publisher of The Los Angeles Times has been forced out. Jeffrey M. Johnson had suggested that job cuts demanded by the parent company-

LOWELL BERGMAN: You've known Mr. Johnson for a long time.

DAVID HILLER, Senior executive, Tribune Co. : Yes.

LOWELL BERGMAN: You respect him.

DAVID HILLER: A very fine guy.

LOWELL BERGMAN: He drew a line in the sand.

DAVID HILLER: Yes, he did.

LOWELL BERGMAN: And it became public.

DAVID HILLER: It did.

LOWELL BERGMAN: On the pages of your own newspaper.

DAVID HILLER: On the pages of every newspaper in the United States.

LOWELL BERGMAN: Pretty unusual.

DAVID HILLER: It was.

LOWELL BERGMAN: Did he drink Kool-Aid, or what happened?

DAVID HILLER: I don't know, and I can't speak for Jeff. He's a fine person and a very good friend. I think, ultimately, people who are leading a business have to share the vision, have to have a vision, and if it's a different one from the people who are the owners of the company, that's not going to work for the long term.

NEWSCASTER: The LA Times has got a new president and publisher this morning.

NARRATOR: The next day, Tribune announced that a new man would be flying out from Chicago to take over as publisher of The LA Times, David Hiller.

NEWSCASTER: Many at the paper wondering about their future-

DAVID HILLER: My plan and expectation is that being a world-class provider of foreign and national news is going to continue to be one of the hallmarks of The Los Angeles Times.

LOWELL BERGMAN: But with fewer people.

DAVID HILLER: Well, I don't know whether it's going to be with fewer people or not. There you go again, as they used to say, being focused on the numbers of people and not on the quality of the coverage.

LOWELL BERGMAN: But who does coverage? I mean, people do coverage.

DAVID HILLER: Well, people do coverage, and you do- yeah, people do coverage.

NARRATOR: With his newsroom threatened, editor Dean Baquet struggled to maintain morale.

DEAN BAQUET: I think there's a tremendous amount of anxiety right now about newspapers and the threat to newspapers. And I think there is such a threat. I don't want this one to sound grandiose or high-falutin', but I think a newspaper is a public trust and I think my mission is a public service mission. There's tension between my view of my world and the people who own newspapers because they are beholden to shareholders.

NARRATOR: In the six years that Tribune had owned the Times Mirror, its stock had lost value. To turn things around, the Tribune Company and its investors now believed that The LA Times needed to do more local coverage.

CHARLES BOBRINSKOY, Ariel Capital Management: Where the problem is, is that the people who are writing The LA Times, they want to be writing about international events. They want to be writing long-term pieces about why Bush went to war in Iraq. And we're saying - and the people at the Tribune are saying - there are other people writing those stories. Certainly, you would agree with me there's no lack of coverage on the issue of why Bush went to war in Iraq. Do we really need The LA Times devoting the resources it has to that story?

DEAN BAQUET: Even if every readership survey said nobody wants to read about the war in Iraq, I'm still going to cover the war in Iraq.

NARRATOR: Since the start of the war, The LA Times has been one of the few newspapers to maintain a full-time reporting presence in Iraq, with journalists like Alissa Rubin risking their lives to get the story.

ALISSA RUBIN, LA Times: ["FRONTLINE/World"] I mean, we sort of have two bad choices. You either go through this area, which is Haifa Street, where there's bombing and shooting-

DEAN BAQUET: There are only three American newspapers that are on the ground in Iraq all the time, The LA Times, The New York Times and The Washington post. USA Today goes in and out. They have one person. He's there on the ground sometimes, and then he gets out. The wires are obviously there all the time.

ALISSA RUBIN: Leaving the hotel is the most dangerous thing we do every day.

DEAN BAQUET: But nobody else has full-time staffer always there. That's appalling. The thought that we would reduce that to two, maybe even one day one- that can't be. I mean, that can't be good for the country.

CHARLES BOBRINSKOY: We're saying there is a role for probably three national newspapers- The Wall Street Journal, The New York Times and USA Today. Each has its own niche. All three are national newspapers. We don't think there's any demand for a fourth.

The demand is for a very strong, high-quality local newspaper focused on the things the people in LA care about - style, Hollywood, entertainment, local government, local sports, local issues like immigration. If he was focused on all those issues, there'd be a lot of demand for his product. Instead, he's trying to be the fourth national newspaper.

[www.pbs.org: The debate over localization]

BILL KELLER, Exec. Editor, The New York Times: The idea that you're going to say to readers, "Buy The LA Times, we will tell you what's going on with the traffic and the schools and the cops and the local stuff, and if you want to know what's going on in Iraq, go buy The New York Times"- I mean, that doesn't sound like a terribly sound business approach, either. And I think if that's- if I were a Los Angeleno, I would be a little insulted by that.

I think the gravest danger facing our business is panic- panic that the stock price has gone down, panic that the ad revenues are- you know, are moving away, and that the only way to keep up is to cut and cut and cut. And they end up downsizing and hollowing out their reporting and editing staffs.

NARRATOR: By the late summer of 2006, editor Dean Baquet was becoming a symbol for embattled newspaper editors around the country faced with similar cutbacks.

LAUREN RICH FINE, Managing Dir., Merrill Lynch: If you are an editor at a newspaper, in theory, you are a highly passionate human being. You care about democracy. You're really there to fight the good fight. You love investigative journalism. It's really expensive to do that. And you can't really prove that you sold more newspapers or sold more advertising as a result of good quality journalism.

LARRY KRAMER, The Washington Post, 1977-'86: This is the chicken and egg problem. Do you do stories that, you know, taste good, or do you do stories that are good for you? And will people view and read stories that are good for you, or will they read the stories that taste good? It's a never-ending problem. I mean, I used to laugh. At The Washington Post, we'd have- every Sunday and many days of the week, we'd have a story that would start on the front page and- down in the corner- and it would be two columns wide and there'd be a headline. And then there'd be a jump, and you'd open up the page, and there'd be two pages on the inside on this story. And you go, "Whoa!"

But the reality is, most people didn't read all those stories. They wanted those stories to be there. But most importantly, they wanted to know that The Washington Post was watching these institutions and was devoting the resources to see if they were- these people were being ripped off, if we, as the public, were being ripped off in a way that we could never find out ourselves. That's great journalism. That's still true. I still think people want those stories.

NARRATOR: Over 50 million Americans still buy a newspaper each day. Twice that number read one. But the number who buy the paper is steadily shrinking, and industry analysts they say they know why.

LAUREN RICH FINE: I don't think people pick up a metropolitan newspaper today to find out about the war in Iraq or Israel. I think they pick it up to find out what's going on locally in terms of politics, in terms of crime, in terms of high school sports. If I ran a local newspaper, I would go so heavily local that it would turn people's heads.

ANNOUNCER: With the combined news resources of The Naples Daily News and Bonita Daily News, this is the Studio 55 vodcast.

NARRATOR: It's called hyperlocalism, and Wall Street thinks it's the future of newspapers in print and on the Web. This Naples, Florida, daily news vodcast was created by a Web pioneer named Rob Curley.

ROB CURLEY, Web developer: We'll say, "As we first told you on our Web site"-

STUDIO 55 NEWSCASTER: As first reported today on NaplesNews.com, steer clear of the water near the Naples pier for the next few days.

ROB CURLEY: We built this daily newscast, and it was kind of put together by the Web staff-

STUDIO 55 NEWSCASTER: Well, you can pick up groceries for less starting today. Albertson's will be closing its north Naples location-

ROB CURLEY: -and available on TV or on the Web or on your iPod or iTunes or whatever.

NARRATOR: Curley's idea was to use new media to refocus newspapers locally, on their own backyards. He began at a small paper in Lawrence, Kansas.

ROB CURLEY: We launched a section called "Game." And the idea behind "Game" was, we were going to cover children's baseball and softball and T-ball like they were the New York Yankees. And you could- if you wanted to know what games were all at this field this week, you could click on that and here is every game at that field. Or if you wanted to see what the field looked like, here's one of those crazy, steerable 360-degree photos where, you know, you can click on it and steer it and those sorts of things.

A newspaper Web site to me is just another way of serving its audience any way that it wants to be served. If they want to have paper thrown on their driveway, then we want to make sure they get it from us. But if they want to get an audio podcast, let's make sure they're getting it from us. If they want to get video news, let's make sure they're getting it from us. So for me, it's just taking the power of our news reporting skills and leveraging it every way we can.

JIM BRADY, Exec. Editor, WashingtonPost.com: Rob's been kind of in the forefront of what's been going on in on-line newspapers for probably 10 years now. He's been one of the real proponents of hyperlocal. It's getting- it's saturating a local community with so much information that, you know, anything you need to know, you go to Lawrence.com and you can find it. Anything you need to know about Naples, go to Naplesnews.com

If you're going to experiment with hyperlocal, you can't do better than having Rob on your side. So that's why we hired him.

ROB CURLEY: When you think of Washington Post journalism, you think of, you know, in-depth interviews with Rumsfeld or-

NARRATOR: Now at The Post, Rob Curley's trying to adapt hyperlocalism to the big city.

ROB CURLEY: What about the people who live here? To me, they're just so fascinating.

BOY: It's actually going to suck more when I actually grow up. I know that. I know that.

NARRATOR: Curley is just one part of The Post's aggressive transformation for the digital age. In the Post's new "converged" newsroom, reporters now feed stories to Washington Post radio, local TV and the Internet.

JIM BRADY: We have 50 reporters a week who come on and do live discussions and answer questions from readers for an hour. And we have 50 reporters walking around, carrying video cameras with them, so when something happens, they can shoot video in addition to what they're reporting.

NELSON HERNANDEZ, Washington Post: And I'd done what I thought was a final interview with Mark Jones, the team leader, when a rocket-propelled grenade exploded nearby.

NARRATOR: In May 2006, Post reporter Nelson Hernandez was ambushed on a patrol in Baghdad.

NELSON HERNANDEZ: The convoy's guard shot back at the insurgents.

JIM BRADY: And instead of hitting the ground, like most of us would have, he pulled the camera out and started filming this firefight. And he sent back the video, and like, "What do you think of this?" It's pretty good. So we put it up on the site, ran it, got a ton of traffic. We put it up on YouTube. We got some traffic there. And I think- so it's adding to the journalism and understanding that you have this great way to get additional content out that you generate in the course of your journalism.

DEAN BAQUET: I think The Washington Post first, followed by The New York Times, were really quick to embrace the Internet. I think that a lot of other newspapers, including The LA Times, were slow. Journalists were slow to embrace it. I'll own up to that. I think business sides of newspapers were slow to embrace it, too, because they thought it wouldn't- they didn't see how they were going to make money from it. So we were slow. But my God, what a good thing it is now.

LARRY KRAMER: You have a running start if you're an existing media brand. You have a credibility. But you have to do it in a way that's interesting. You have to engage people once they're there. And you have to make it so that they want to keep coming back. And when that's the habit they form, you've got them. Advertisers will follow. Revenue will follow. You still need to own that time. The worse thing the situation can be is you lose them to some other source of information on the Web. Then getting them back is going to be impossible.

SCOTT MOORE, Head of News, Yahoo!: I would make a prediction that in the next five to ten years, somebody with deep pockets is going to decide that there's a great opportunity to create local-based news offerings that don't have a newspaper attached to it at all. You wouldn't have the same cost structure as the newspaper, but if you were putting out a product that was of equal quality and perhaps much more attractive and sort of Web-like in its approach, you might take a lot of their audience away. And because your cost basis would be lower, you could make a lot of money on that.

NARRATOR: But for now, ad revenues on the Web are still far short of newspapers. Many are wondering how long it will take to close the gap and what might be lost in the transition to the Web.

BILL KELLER: At the moment, it's the printed newspaper that pays most of the cost of my newsroom. But the digital side is coming on awfully fast. Whether every newspaper will get there or whether everyone will get there in the same way, I wouldn't predict that. You know, some newspapers will die.

CHARLES BOBRINSKOY, Ariel Capital Management: [on the phone] Yeah, that's fair. The question is, are there people that would pay you irrational prices for The LA Times and-

NARRATOR: With its stock price dipping and shareholders in revolt, the Tribune Company put itself up for sale in the fall of 2006.

CHARLES BOBRINSKOY: Look, nobody is happy about this, that is for sure, but this comes under the category of trying to improve a tough situation.

NARRATOR: The possibility had now opened up that there would be a new owner for The LA Times.

ELI BROAD, Founder, The Broad Foundations: I think The Los Angeles Times needs local ownership.

LOWELL BERGMAN: That simple?

ELI BROAD: It's that simple. I think we're better off with local ownership. I think a newspaper is really, in many ways, the soul of the city, the soul of the community. And I think with local ownership, a better job can be done.

NARRATOR: Eli Broad is a billionaire housing developer turned philanthropist and art patron in Los Angeles.

MARIA SHRIVER: He's actually almost single-handedly making this the arts capital of the country.

NARRATOR: He is one of three wealthy men in LA who have proposed doing what a number of other moguls around the country have attempted in recent years, buying back troubled local papers from their corporate owners.

LOWELL BERGMAN: Do you have any background in journalism?

ELI BROAD: I have no background in journalism whatsoever.

LOWELL BERGMAN: Just a consumer.

ELI BROAD: I'm a consumer. I'm an avid reader of newspapers. I read three papers every day.

LOWELL BERGMAN: You would be willing to put money into a foundation that would then buy The Los Angeles Times?

ELI BROAD: Yeah. Our foundation might join other foundations in buying The Los Angeles Times and be happy with a lesser return than other investments would yield.

LOWELL BERGMAN: But are you willing to say how far down you're willing to go?

ELI BROAD: Well, I think if it returns 5, 6, 7, 8 or 9 percent, that would be just fine.

LOWELL BERGMAN: But would you get involved in the editorial content?

ELI BROAD: I might, especially when it comes to areas in culture and education reform and other areas.

LOWELL BERGMAN: You might get involved in those areas?

ELI BROAD: Yes.

LOWELL BERGMAN: Should we tell the senior management at The LA Times that if Mr. Broad buys the newspaper, your jobs are safe?

ELI BROAD: You certainly could. I think Dean Baquet and others are doing a fine job at The LA Times.

LOWELL BERGMAN: Eli Broad and many other people that we've talked to-

DEAN BAQUET: A good guy. [laughs] A very handsome guy. [laughs]

LOWELL BERGMAN: Well, Mr. Broad said that he would be satisfied with 6 to 9 percent profit.

DEAN BAQUET: I think that- you know, that's a- that sounds great.

LOWELL BERGMAN: Eli Broad told us he's willing to accept 5, 6, 7, 8 percent profit if he owned The Los Angeles Times. Why isn't the Tribune Company? You're already making 20?

DAVID HILLER, Publisher, LA Times: Yeah. Well, as a public company, one answer would be the stock price would go way below where it's currently going, which is way below where it used to be. So a private owner like Mr. Broad would be able to say, "I'll earn X percent." And if he's the owner, he gets to say that. If Wall Street's the owner, they get to say what their expectations are for what a publicly-owned business is expected to achieve. That's just as brutal as it may seem. That's kind of a fact of life of the business world.

DEAN BAQUET: Newspapers are in such an odd position in the- I mean, we're almost like a public trust that has private ownership. And I don't think any ownership is quite perfect, though I like The St. Pete Times's ownership model.

LOWELL BERGMAN: Because it's a non-profit.

DEAN BAQUET: It's a non-profit.

NARRATOR: The St. Petersburg Times is the largest newspaper in Florida, with a reputation for solid journalism. It is owned by the non-profit Poynter Institute and supports itself on half of what Wall Street demands.

ANDY BARNES, Fmr. CEO & Chmn. St. Petersburg Times: The idea that all of the world should be measured in dollars to stockholders is actually a relatively new idea. Used to be that we thought businesses had their purpose. Their purpose was to be making newspapers or fountain pens or whatever. And now we act as though the only purpose of a business is to enrich the people who trade it on Wall Street.

I don't agree with that. I think that is a wrong-headed view. Of course you've got to have profit. Of course you've got to support your ownership. But that's not why we're doing it. We're doing it because publishing a newspaper is a crucial thing to be doing.

NARRATOR: National Public Radio is another kind of non-profit success story, now reaching about 26 million people a week. A Harris poll in 2005 found that NPR was the most trusted news source in the country. And they've still got a bureau in Baghdad.

LOWELL BERGMAN: You know, there are non-profit ownership situations with major newspapers, St. Petersburg Times. It's very successful. It's become the largest newspaper in Florida. And also NPR, so-

DAVID HILLER: All we need, then, is a not-for-profit who wants to spend $14 billion to buy the Tribune Company, and then you'd be all set. So if you know of one of those, have them call me.

NARRATOR: Most of the surviving newspapers in the country that still devote significant resources to in-depth reporting have one thing in common: family control.

BILL KELLER, Exec. Editor, The New York Times: You know, I wake up every day grateful for the Sulzberger family because- and the same thing would be true of some of the other major newspapers that have similar arrangements- The Washington Post, which is under the control of the Graham family, The Wall Street Journal under the Bancroft family, once upon a time The LA Times under the Chandler family. And, you know, all of these companies have run very sound, profitable businesses while sustaining that, you know, civic function, you know, of providing good journalism. And they've been able to do that because they didn't have to respond in a kind of panic to every quarterly return.

NARRATOR: Back in Los Angeles, Dean Baquet was still refusing to make the staff cuts his publisher demanded. Once again, he made it a public issue, this time in a speech to other newspaper editors.

DEAN BAQUET: I said that I thought that some of my colleagues, as editors, had let me know privately how angry they were about the cuts they'd had to make. And I said that maybe they shouldn't be so quiet about it.

[New Orleans, October 26, 2006] So when the company asked for yet another round of significant cuts in staff, I felt compelled to say no.

DAVID HILLER: Well, I'm all for people saying what's on their mind. And if they want to do it publicly, that's fine. Not my style. I wouldn't do that. But it wasn't so much that he said it and that he said it publicly, but it did help gel in my mind that we really didn't see the business the same way.

NARRATOR: On November 7th, word spread through The Times newsroom that Dean Baquet had been fired.

DEAN BAQUET: The staff crowded around, hundreds of people, and I stood up on a desk and confirmed it. I was choked up. It was very emotional. It's a great staff. What I kept thinking was, "Think of what I've been through with this newsroom." I have personally laid people off in this newsroom. And I've had to say no in this newsroom. And I can't tell you how- I can't tell you what it's like to go out as an editor and still have your newsroom support you, when you've had to do hard stuff. That meant a lot to me. A whole lot.

NARRATOR: Since leaving The Los Angeles Times, Dean Baquet's old colleague, editor John Carroll, has spent time writing and teaching at Harvard, reflecting on what he calls "a crisis of the soul" in American journalism.

JOHN CARROLL: I'm very sentimental about newspapers, but I also am very clearheaded about the fact that newspapers are doing the reporting in this country. Google and Yahoo! and those people aren't putting reporters on the street in any numbers at all. Blogs can't afford it. Network television is taking reporters off the street. Commercial radio journalism is almost nonexistent. And the newspapers are the last ones standing, and newspapers are threatened. And reporting is absolutely an essential thing for democratic self-government. Who's going to do it? Who's going to pay for the news? If newspapers fall by the wayside, what will we know?

NARRATOR: Not long after he fired Dean Baquet, publisher David Hiller turned up at a ceremony honoring The LA Times with a star on Hollywood Boulevard.

DAVID HILLER: Thanks for having us on this great day.

NARRATOR: But the paper's fate was never more uncertain. Eli Broad made a bid to buy The Times and its parent company, Tribune. So did the Chandler family, that once owned The Times. But so far, the Tribune Company has not accepted any of the bids, leaving the future of one of America's great newspapers deeply in question.

News War: What's Happening to the News

WRITTEN BY
Stephen Talbot & Lowell Bergman

REPORTED AND CO-PRODUCED BY
Lowell Bergman

PRODUCED BY
Stephen Talbot

SENIOR PRODUCER
Ken Dornstein

EDITED BY
Andrew Gersh

ADDITIONAL EDITING
Steve Audette
Peter Rhodes

FIELD PRODUCER
Sachi Cunningham

NARRATED BY
Will Lyman

SERIES ASSOCIATE PRODUCER
Marlena Telvick

ASSOCIATE PRODUCERS
Amanda Pike
Ariana Reguzzoni
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Marjorie McAfee
Aaron Selverston
Catherine Wright

ONLINE EDITOR
Jim Ferguson

SOUND MIX
Christopher D. Anderson

PRODUCTION ASSISTANTS
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MUSIC COMPOSED BY
Claudio Regazzi

RESEARCH
Cathy Bussewitz
Kate Golden
Sasha Gurevich
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Jonathan Jones
Matt Levin
Marjorie McAfee
Aman Muhar
Cerissa Tanner
Clayton Worfolk

CAMERA
Ben McCoy
Ed Matney
Peter Pearce
John Chater
Stephen Lighthill

SOUND
Tom Levy
Carl Franson
Paul Rusnak
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ADDITIONAL CAMERA
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Jordan deBree
Boyd Estus
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Rob Harris
Sean Healey
Brian Knappenberger
Stephen McCarthy
Sam Painter
Jayme Roy
Ines Sommer
Mark Stoddard
Sandra Valde
Thomas Van Otteren
Joe Vitagliano

ADDITIONAL SOUND
John Blackman
Adriano Bravo
Ray Day
Luis Granados
Galen Handy
Dana Marxen
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Fred Soffa
Hillary Stewart
Dan Zimbaldi

ARCHIVAL MATERIALS
AP/Wide World Photos
CNN Image Source
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Vanderbilt Television News Archives

THANKS
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Anna Werner & KPIX
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LOCATION THANKS
Bruce Cain and Elizabeth Victoreen
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SPECIAL THANKS
Richard Goldman
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FOR FRONTLINE

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NEWS WAR: What's Happening to the News is a FRONTLINE co-production with Cam Bay Productions, Inc. in association with the UC Berkeley Graduate School of Journalism

© 2007 WGBH Educational Foundation
All Rights Reserved
FRONTLINE is a production of WGBH/Boston
which is solely responsible for its content

ANNOUNCER: This report continues on FRONTLINE's Web site, where you can watch the full program again on line, access a database of dozens of interviews with journalists, media analysts and network news and Internet experts, read more on the future of newspapers, the Internet's impact on news and in-depth reporting and who will pay for the news in the future. Then join the discussion at PBS.org.

In March, News War continues on FRONTLINE/World. In the Middle East, Arab news media are booming.

- Al Jazeera is catering to their audience, just like Fox News.

ANNOUNCER: FRONTLINE/World looks at the media battle for hearts and minds in the Middle East.

- America has never been less influential, and nobody needs to understand that more than Americans.

ANNOUNCER: In March, News War continues on FRONTLINE/World.

To order this episode of FRONTLINE's News War series on videocassette or DVD, call PBS Home Video at 1-800-PLAY PBS. [$24.99 plus s&h]

Funding for FRONTLINE is provided by the Park Foundation, committed to raising public awareness, with major funding for News War from the Richard and Rhoda Goldman Foundation and additional funding from the Nathan Cummings Foundation.

FRONTLINE is made possible by contributions to your PBS station from viewers like you. Thank you.

 

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