Wealth of Networks: Sinclair Broadcasting

Here is the other story referenced in this post.

I'm still only about 2/3 through The Wealth of Networks, but I might want to take back my comment about not recommending the book. There is a lot of really good stuff in this book and it probably is well worth fighting through some of the drier parts. Anyway, here is the other story I referenced:



"Our first story concerns Sinclair Broadcasting and the 2004 U.S. presidential election. It highlights the opportunities that mass-media owners have to exert power over the public sphere, the variability within the media itself in how this power is used, and, most significant for our purposes here, the potential corrective effect of the networked information environment. At its core, it suggests that the existence of radically decentralized outlets for individuals and groups can provide a check on the excessive power that media owners were able to exercise in the industrial information economy.

Sinclair, which owns major television stations in a number of what were considered the most competitive and important states in the 2004 election—including Ohio, Florida, Wisconsin, and Iowa—informed its staff and stations that it planned to preempt the normal schedule of its sixty-two stations to air a documentary called Stolen Honor: The Wounds That Never Heal, as a news program, a week and a half before the elections.2

The documentary was reported to be a trident attack on Democratic candidate John Kerry’s Vietnam War service. One reporter in Sinclair’s Washington bureau, who objected to the program and described it as “blatant political propaganda,” was promptly fired.3

The fact that Sinclair owns stations reaching one quarter of U.S. households, that it used its ownership to preempt local broadcast schedules, and that it fired a reporter who objected to its decision, make this a classic “Berlusconi effect” story, coupled with a poster-child case against media concentration and the ownership of more than a small number of outlets by any single owner.

The story of Sinclair’s plans broke on Saturday, October 9, 2004, in the Los Angeles Times. Over the weekend, “official” responses were beginning to emerge in the Democratic Party. The Kerry campaign raised questions about whether the program violated election laws as an undeclared “in-kind” contribution to the Bush campaign. By Tuesday, October 12, the Democratic National Committee announced that it was filing a complaint with the Federal Elections Commission (FEC), while seventeen Democratic senators wrote a letter to the chairman of the Federal Communications Commission (FCC), demanding that the commission investigate whether Sinclair was abusing the public trust in the airwaves. Neither the FEC nor the FCC, however, acted or intervened throughout the episode.

Alongside these standard avenues of response in the traditional public sphere of commercial mass media, their regulators, and established parties, a very different kind of response was brewing on the Net, in the blogosphere. On the morning of October 9, 2004, the Los Angeles Times story was blogged on a number of political blogs—Josh Marshall on Talkingpointsmemo.com, Chris Bower on MyDD.com, and Markos Moulitsas on dailyKos.com.

By midday that Saturday, October 9, two efforts aimed at organizing opposition to Sinclair were posted in the dailyKos and MyDD. A “boycott-Sinclair” site was set up by one individual, and was pointed to by these blogs. Chris Bowers on MyDD provided a complete list of Sinclair stations and urged people to call the stations and threaten to picket and boycott.

By Sunday, October 10, the dailyKos posted a list of national advertisers with Sinclair, urging readers to call them. On Monday, October 11, MyDD linked to that list, while another blog, theleftcoaster.com, posted a variety of action agenda items, from picketing affiliates of Sinclair to suggesting that readers oppose Sinclair license renewals, providing a link to the FCC site explaining the basic renewal process and listing public-interest organizations to work with. That same day, another individual, Nick Davis, started a Web site, BoycottSBG.com, on which he posted the basic idea that a concerted boycott of local advertisers was the way to go, while another site, stopsinclair.org, began pushing for a petition.

In the meantime, TalkingPoints published a letter from Reed Hundt, former chairman of the FCC, to Sinclair, and continued finding tidbits about the film and its maker. Later on Monday, TalkingPoints posted a letter from a reader who suggested that stockholders of Sinclair could bring a derivative action. By 5:00 a.m. on the dawn of Tuesday, October 12, however, TalkingPoints began pointing toward Davis’s database on BoycottSBG.com. By 10:00 that morning, Marshall posted on TalkingPoints a letter from an anonymous reader, which began by saying: “I’ve worked in the media business for 30 years and I guarantee you that sales is what these local TV stations are all about. They don’t care about license renewal or overwhelming public outrage. They care about sales only, so only local advertisers can affect their decisions.”

This reader then outlined a plan for how to watch and list all local advertisers, and then write to the sales managers—not general managers—of the local stations and tell them which advertisers you are going to call, and then call those. By 1:00 p.m. Marshall posted a story of his own experience with this strategy. He used Davis’s database to identify an Ohio affiliate’s local advertisers. He tried to call the sales manager of the station, but could not get through. He then called the advertisers. The post is a “how to” instruction manual, including admonitions to remember that the advertisers know nothing of this, the story must be explained, and accusatory tones avoided, and so on. Marshall then began to post letters from readers who explained with whom they had talked—a particular sales manager, for example—and who were then referred to national headquarters. He continued to emphasize that advertisers were the right addressees.

By 5:00 p.m. that same Tuesday, Marshall was reporting more readers writing in about experiences, and continued to steer his readers to sites that helped them to identify their local affiliate’s sales manager and their advertisers.4

By the morning of Wednesday, October 13, the boycott database already included eight hundred advertisers, and was providing sample letters for users to send to advertisers. Later that day, BoycottSBG reported that some participants in the boycott had received reply e-mails telling them that their unsolicited e-mail constituted illegal spam. Davis explained that the CANSPAM
Act, the relevant federal statute, applied only to commercial spam, and pointed users to a law firm site that provided an overview of CANSPAM.

By October 14, the boycott effort was clearly bearing fruit. Davis reported that Sinclair affiliates were threatening advertisers who cancelled advertisements with legal action, and called for volunteer lawyers to help respond. Within a brief period, he collected more than a dozen volunteers to help the advertisers. Later that day, another blogger at grassroots nation.com had set up a utility that allowed users to send an e-mail to all advertisers in the BoycottSBG database.

By the morning of Friday, October 15, Davis was reporting more than fifty advertisers pulling ads, and three or four mainstream media reports had picked up the boycott story and reported on it. That day, an analyst at Lehman Brothers issued a research report that downgraded the expected twelve-month outlook for the price of Sinclair stock, citing concerns about loss of advertiser revenue and risk of tighter regulation. Mainstream news reports over the weekend and the following week systematically placed that report in context of local advertisers pulling their ads from Sinclair.

On Monday, October 18, the company’s stock price dropped by 8 percent (while the S&P 500 rose by about half a percent). The following morning, the stock dropped a further 6 percent, before beginning to climb back, as Sinclair announced that it would not show Stolen Honor, but would provide a balanced program with only portions of the documentary and one that would include arguments on the other side. On that day, the company’s stock price had reached its lowest point in three years. The day after the announced change in programming decision, the share price bounced back to where it had been on October 15. There were obviously multiple reasons for the stock price losses, and Sinclair stock had been losing ground for many months prior to these events. Nonetheless, as figure 7.1 demonstrates, the market responded quite sluggishly to the announcements of regulatory and political action by the Democratic establishment earlier in the week of October 12, by comparison to the precipitous decline and dramatic bounce-back surrounding the market projections that referred to advertising loss.

While this does not prove that the Web-organized, blog-driven and -facilitated boycott was the determining factor, as compared to fears of formal regulatory action, the timing strongly suggests that the efficacy of the boycott played a very significant role.

The first lesson of the Sinclair Stolen Honor story is about commercial mass media themselves. The potential for the exercise of inordinate power by media owners is not an imaginary concern. Here was a publicly traded firm whose managers supported a political party and who planned to use their corporate control over stations reaching one quarter of U.S. households, many in swing states, to put a distinctly political message in front of this large audience. We also learn, however, that in the absence of monopoly, such decisions do not determine what everyone sees or hears, and that other mass-media outlets will criticize each other under these conditions. This criticism alone, however, cannot stop a determined media owner from trying to exert its influence in the public sphere, and if placed as Sinclair was, in locations with significant political weight, such intervention could have substantial influence.

Second, we learn that the new, network-based media can exert a significant counterforce. They offer a completely new and much more widely open intake basin for insight and commentary. The speed with which individuals were able to set up sites to stake out a position, to collect and make available information relevant to a specific matter of public concern, and to provide a platform for others to exchange views about the appropriate political strategy and tactics was completely different from anything that the economics and organizational structure of mass media make feasible.

The third lesson is about the internal dynamics of the networked public sphere. Filtering and synthesis occurred through discussion, trial, and error. Multiple proposals for action surfaced, and the practice of linking allowed most anyone interested who connected to one of the nodes in the network to follow quotations and references to get a sense of the broad range of proposals. Different people could coalesce on different modes of action—150,000 signed the petition on stopsinclair.org, while others began to work on the boycott. Setting up the mechanism was trivial, both technically and as a matter of cost—something a single committed individual could choose to do. Pointing and adoption provided the filtering, and feedback about the efficacy, again distributed through a system of cross-references, allowed for testing and accreditation of this course of action. High-visibility sites, like Talkingpointsmemo or the dailyKos, offered transmissions hubs that disseminated information about the various efforts and provided a platform for interest-group-wide tactical discussions.

It remains ambiguous to what extent these dispersed loci of public debate still needed mass-media exposure to achieve broad political salience. BoycottSBG.com received more than three hundred thousand unique visitors during its first week of operations, and more than one million page views. It successfully coordinated a campaign that resulted in real effects on advertisers in a large number of geographically dispersed media markets. In this case, at least, mainstream media reports on these efforts were few, and the most immediate “transmission mechanism” of their effect was the analyst’s report from Lehman, not the media. It is harder to judge the extent to which those few mainstream media reports that did appear featured in the decision of the analyst to credit the success of the boycott efforts. The fact that mainstream media outlets may have played a role in increasing the salience of the boycott does not, however, take away from the basic role played by these new mechanisms of bringing information and experience to bear on a broad public conversation combined with a mechanism to organize political action across many different locations and social contexts."