It is a sharp analysis of the state of the industry at a transformational moment. Newspaper news and television news are not going to disappear but they will play a diminished role in the rapidly changing world of digital journalism.

Recent discussions on the economic challenges of the newspaper and questions about online economic models (pay wall vs. ad-supported) haven’t addressed what may be lost and not necessarily supportable by the bloggers of the world. Namely public affairs and accountability reporting as well as detailed reporting on local and state issues.

The two questions they attempt to answer are:

What is going to take the place of what is being lost?

What should be done to shape the new landscape to ensure essential elements of independent original and credible news reporting are preserved?

They have six recommendations:

1. The Internal Revenue Service or Congress should clearly and explicitly authorize any independent news organization substantially devoted to reporting on public affairs to be created as or converted into a nonprofit entity or a Low-profit Limited Liability Corporation serving the public interest, regardless of its mix of financial support, including commercial sponsorship and advertising. The IRS or Congress also should explicitly authorize “program-related investments” by philanthropic foundations in these hybrid news organizations—and in designated public service news reporting by for-profit news organizations.

2. Philanthropists, foundations, and community foundations should substantially increase their support for news organizations that have demonstrated a substantial commitment to public affairs and accountability reporting.

3. Public radio and television should be substantially reoriented to provide significant local news reporting in every community served by public stations and their Web sites. This requires urgent action by and reform of the Corporation for Public Broadcasting, increased congressional funding and support for public media news reporting, and changes in mission and leadership for many public stations across the country.

4. Universities, both public and private, should become on-going sources of local, state, specialized subject, and accountability news reporting as part of their educational missions. They should operate their own news organizations, host platforms for other nonprofit news and investigative reporting organizations, provide faculty positions for active individual journalists, and be laboratories for digital innovation in the gathering and sharing of news and information.

5. A national Fund for Local News should be created with money the Federal Communications Commission now collects from or could impose on telecom users, television and radio broadcast licensees, or Internet service providers and administered in open competition through state Local News Fund Councils.

6.More should be done—by journalists, nonprofit organizations, and governments—to increase the accessibility and usefulness of public information collected by federal, state, and local governments, to facilitate the gathering and dissemination of public information by citizens, and to expand public recognition of the many sources of relevant reporting.

Look, I am very sympathetic to content creators getting their fair share. Movies cost a ton to make and market these days and clearly BitTorrent Trackers are facilitating illegal actions. That being said, just like the record companies fucked it up with Napster and suing 12 year olds, the movie studios should be working that much harder to come up with a viable solution for what consumers are demanding - more on demand availability of movies that have been recently released. That may take reframing some of their notions about theatrical release, dvd release, cable release, etc. But the physics of media (i.e. DVDs) are changing from objects to bits. Accept it.

Just because the old formula worked great doesn’t mean it needs to stay that way. Business models and revenue streams evolve and studios may have to stop relying on the golden goose of DVDs. According to this Business Week article, DVD sales account for 70% of a movies revenue and yet DVD sales fell 14.5% last year and that rate of decline seemed to accelerate in the 4th quarter. Things are changing fast and media companies need to respond with what consumers want not lawsuits and a ‘war on piracy’.

I just finished reading Larry Lessig’s latest book ‘Remix’ on copyright in the Internet era. Much like his other books on the subject, Lessig lays out the case for why copyright law is broken and ultimately harmful to the production and consumption of culture and knowledge. The Girl Talk song I’ve posted is a great example of the failings of the current system and the need for revised Fair Use doctrine and is one of the initial cases discussed in the book.

Three things that really stood out to me were:

1. We need to re-frame the discussion of copyright around a metaphor other than ‘War’ (i.e. the War on Piracy). It is constraining and ultimately more harmful than helpful. Media companies and copyright law need to be more modest in  regulation by simplifying copyright law, de-regulating amateur creativity and decriminalizing file-sharing (which to the RIAA’s credit they are finally coming around to). Ultimately this can lead to more creativity, innovation and revenue.

2. That the ‘hybrid economy’ - that is the “commercial” and “sharing” economies - can co-exist and in fact complement each other. The important thing is to create frameworks that allow this complementary benefit to arise. Examples he cites are Google, Netflix and Amazon where user actions (searches, clicks, purchases) help drive value to the community at large and the user in specific.

3. When one looks at the sharing economics there are what he calls two basic types, “thin sharing economies” and “thick sharing economies”. “Thin sharing economies” refers to more simple self motivated sharing actions - basically “people contribute to the common good as a by-product of doing what the would otherwise want to do.” “Thick sharing economies” have a broader set of motivations at work - think contributing an article to Wikipedia or working on an open source software project. Both are necessary components to a sharing economy but being able to distinguish between the two is important in constructing systems that ultimately survive.

As I mentioned in my previous post media discovery is broken and a big reason for this is existing copyright law and how the record labels have tried to litigate against these broken laws. Ultimately I believe that even before the law is fully modified, the record labels are going to realize that there is not nearly enough sharing of music going on right now online. I don’t mean file sharing, I mean music sharing. Sharing your listening stream so that others in your social graph can discover this music as well and listen to it. I think the thinking in this book points to some of the important legal and business frameworks that need to be adjusted to realize the full potential of the sharing economy. Which ultimately will generate a lot of revenue for the music industry - but maybe not the big labels. Oh well.

I loved all the year in review stuff recently (Rolling Stone, Pitchfork) because it helped me know what I have missed in terms of music and movies (I don’t really watch much TV beyond sports and 5 minutes of Charlie Rose before passing out). Bon Iver, Girl Talk and TV on the Radio are three kick ass albums I just recently purchased as a result of those reviews. But critics top picks and year end reviews come out once  a year. I need something more reliable for the rest of the time.

I wish it was much easier for me to understand what my friends on Facebook are listening to and watching (sorry iLike tries but doesn’t get there, Facebook you should buy Lala) as well as what is cool, hot or interesting to the world at large - without having to scan a bunch of blogs. Basically, how the problem is currently being solved - namely search or editiorial or mystery algorithms misses the experience I am looking for. Media consumption and discovery needs to be intelligent, delightful, effortless and way more engaging than it is. There are some cool things going on - Hype Machine, Pandora, Hulu, Lala and Songbird are all very impressive. I know we can do better.

I have been giving this topic a fair amount of thought and research recently and plan to share some of this information in coming posts. Among the topics currently on my mind to cover are:

• Music industry economics and emerging realities.
• Online video economics and emerging realities.
• My favorite media experiences and features on the web
• The broken social social discovery experience
• Broken algorithmic discovery experience
• Cool trends (technology, industry, etc.)
• Ideas to make media discovery and consumption more delightful
• Thoughts on industry changes to dramatically grow revenue growth rates

Stay Tuned.

I read this month’s Wired article about Oakley founder Jim Jannard’s new project to create a digital movie camera that matches the richness of analog with great interest. It sounded like a cool project and product from an eccentric billionaire with time on his hands now that he sold Oakley. Anyways, just checked out this sick video shot with the Red One and it is pretty impressive. Exciting how the tools for high quality digital production keep getting better and the prices keep going down. The second wave of digital media on the web (Media 2.0) in my mind is yet to be close to realized but these types of tools will ensure a great user experience.