College media advisers would be well served to notice that the tiny blips of clouds on their radar screens have organized and grown into a massive system that is — look out the window now — right on the horizon.

A “Pew Internet & American Life project report”:http://www.pewinternet.org/PPF/r/178/report_display.asp released today confirmed that the Internet has become the primary source of news for young people.

In a “recent survey”:http://reinventing.collegemedia.org/index.php?id=121 I asked college media advisers when they believed that primary content delivery for student media would shift from printed publications to online sites. A surprising 15 percent answered, “Not in my lifetime.” Ignoring the importance of online delivery to traditional college-aged students strikes me as occupational suicide for anyone working with college media. Maybe that’s what those respondents intended.

Peter Johnson writes about the study in today’s “USA Today”:http://www.usatoday.com/printedition/life/20060323/d_mediamix23.art.htm in which he points out the “profound ramifications” of the study’s findings on mainstream media.

bq. Especially for the under-36 age group, the local newspaper, local television and national TV newscasts play lesser roles in their newsgathering, the study finds.

bq. The study paints a bleak outlook for traditional ink-on-paper newspapers. But it also finds that younger readers — those under 36 who are often written off as not interested in news — are being drawn into the news habit earlier thanks to the appeal of the Internet.

bq. “To maintain relevance in a community, a local print paper has to have a very robust online presence,” study author John Horrigan says. And if local newspapers quickly merge online technology into their print operations, they stand to draw younger, Internet-dependent readers “who find traditional media less relevant for them” but are drawn to local news websites.

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LONDON (AdAge.com) — The U.S. national newspapers — The New York Times, The Wall Street Journal and USA Today — are broadsheets, in keeping with a tradition that a broadsheet connotes seriousness, while a tabloid is sensational. That view was long held here in the U.K. as well, but this past year several “serious” newspapers here switched over to tabloid format and found their circulation soared.

‘Independent’ first

The Independent was first, followed by The Times. The Wall Street Journal’s European and Asian editions have followed suit. The Guardian recently launched in a “Berliner” format, which is a smaller than a broadsheet but still bigger than a tabloid.
The dailies recorded a significant rise in circulation following the format changes. David Greene, The Independent’s circulation and marketing director, went as far as to say the change “saved the paper.”

In October, for example, circulation at the The Independent was up 1.71% from the previous month to 267,037 — a 0.4% rise year-on-year. Similarly, The Times was up 0.58% to 703,492 for the month and 7.16% up year-on-year. Following its September relaunch, The Guardian sold 403,296 copies a day in October — in August it was selling 341,968.

Broadsheet circulation down

Meanwhile The Telegraph — the only paper in the U.K. to hang on to its broadsheet format — was down 0.29% in October to 901,667 copies despite a major relaunch that month. Year-on-year the publication was down 0.2%.

The original tabloids, by contrast, are suffering a sales slump. In October, The Daily Mirror was down 3.28%, The Sun was off 2.3% and The Daily Mail was down 0.97% from the previous month.

In the U.K. newspaper publishers who have adopted the new format prefer the word “compact” to “tabloid,” fearing there is still a downmarket stigma attached to tabloids. “Quality used to be defined by size,” Mr. Greene said. “People still use the term ‘tabloid’ as a dig.”

The Independent was the first British broadsheet to go tabloid, in September 2003. “Our bravery was contained,” said Mr. Greene, because the paper only did it in London to start with. “We had to do something. Our research showed us that younger readers and commuters find broadsheets masculine, outdated, big and unwieldy.”

Shape of a younger audience

“If you look at everything else around us — chocolate, toothpaste — it comes in various shapes and sizes for consumer use. The shape brings in a younger audience,” he added.
Although there was a “modest drop” in advertising revenue immediately after the relaunch, Mr. Greene claimed that “we more than compensated this year.” The costs of relaunching formats were substantial: $211 million for The Guardian, $53 million for The Times and $21 million for The Independent.
The Wall Street Journal Europe has not released its circulation figures yet, but the paper has revealed that advertising linage increased by 41% (and 16% in the Asia edition) in November, following the relaunch in mid-October. When the paper ran the same ads in pre- and post-relaunch editions, recall increased from 65% to 88%, respectively.

Rebirth of the tabloid

Penny Abernathy, senior VP-international and development at the WSJ, said, “We thought about where readers are going to be in five years’ time. We looked around the world and we saw that European newspapers are ahead. The rebirth of the tabloid is driven by the way people use computers and cellphones — they are used to a small-sized screen and short briefs.”

These are long-term investments by proprietors convinced that a more convenient format is the future of newspapers. Ms. Abernathy cites a Poynter Institute study showing that tabloids are read differently from broadsheets. Because they don’t get battered on first reading, consumers turn to tabloid-formatted papers for news in the morning and then keep hold of them during the day, returning for a more leisurely look at analysis and insight in the evening.

Higher ad recognition

The same study also indicated via eye-tracking that ads in tabloids get 50% more recognition than in broadsheets, because the eye picks up more than it does on a broadsheet, which people tend to fold. Page dominance rather than size of ad determines recall.

“We expect an upturn in readership,” Ms. Abernathy said. She hinted that the WSJ might consider making the move to tabloid in the U.S. “I’ve never seen a newspaper redesigned in the U.S. without asking to see a tabloid form,” she said. “We have designed a paper for where things are moving.”

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Citizen journalism has been haunting newsrooms since Dan Gillmor wrote We the Media: Grassroots Journalism by the People, for the People in 2004. Suddenly, for Gillmor epigone and imitators (not for Gillmor himself), there was a new hero, the citizen journalist, struggling against a bad guy called the traditional journalist.

In fact a very bad guy this old journo: outdated, working for a mainstream media – disgusting, isn’t it ? -, linked to corporate interests, limited by the newsroom horizon, not very well connected (nor well educated) and with no knowledge of what can interest average people! Moreover, truth and accuracy were no longer his cup of tea…

On the contrary, the citizen journalist had so many qualities: as a newcomer, he was young, fresh, innocent, independent, with a lot of new ideas on journalism and democracy and on top of that a real love of truth.

But the problem is that this ideal citizen journalist only exists in some bloggers’ views.

The reality is different with the birth of four categories of citizen journalism, but with very few links between them:

the citizen journalist who owns a digital camera or a camera phone and sends shootings to a news organisation during a major event (tsunami, London bombing…) or a local car accident
the citizen journalist who wants to cover its local or virtual community and produce targeted content
the citizen journalist who is a militant and campaigns for political reasons. How Eason Jordan was fired from CNN by infuriated bloggers in January 2005, was a good example of biased citizen journalism
the citizen journalist who is eager to participate to a « conversation » with professional journalists and bloggers. « News is just the beginning » says Jeff Jarvis and, in some cases, it is true.
No doubt something new has appeared in the last two years and that traditional newsrooms will have to deal with these new citizen journalists. But the idea that there is an essence of citizen journalism – as replacing the so-called traditional journalism – is dead.

Citizen journalists are part of the family, but different. And this difference depends on what journalists and bloggers call « collective intelligence ».

For a journalist, a newsroom is the expression of collective intelligence with horizontal links between colleagues and fact-checkers, but also with vertical relationships from the basic journalist to the editor-in-chief.

For a blogger (or a wikimedian) the network hates vertical acquaintances and will always give the priority to horizontal linking and fact-checking. As the Zagat cuisine guide, the real judge is the number of links to a site: popularity becomes synonymous of truth and quality. Not often relevant in the news process !

In conclusion, thank you the year 2005 for having clarified what is – and what is not – citizen journalism. And good luck to citizen journalists who are experiencing new ways of waging the truth and the reality.

To read almost the contrary, go to the Hypergene Mediablog and read the article written by Chris Willis and Shayne Browman for the Nieman Reports: a very good paper whose headline is “The Future Is Here, But Do News Media Companies See It?”

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Just five years ago, Microsoft Corp. was considered the Big Bad Wolf of the media business.

Armed with a stockpile of cash and the Windows operating system that dominates office computing, Bill Gates’ company was expected to huff and puff its way into America’s living rooms as well, with video game consoles, home networking systems and TV set-top boxes.

But today, there’s a different wolf at the door. Although Microsoft is still flush with $40 billion in cash, it is Google Inc. that the media industry fears most. So intense is Google-fueled paranoia, in fact, that industry watchers believe the Internet search giant could drive profound changes in the media, entertainment and technology landscape in 2006.

Already, old media are investing heavily in new-media ventures. Newspapers like this one are defending their bread-and-butter income — classified advertising — by stepping up their Web offerings. Media conglomerates such as News Corp. are buying Web properties like MySpace.com that connect them to young audiences, who are forsaking television and radio in favor of the Internet.

This year, new media could return the favor by investing in old media — the folks who know the most about producing entertainment content.

Here are some predictions for the media industry for 2006, based on interviews with industry analysts, executives and investors, along with a little intuition.

Cheap PCs, anyone?

Google will unveil its own low-price personal computer or other device that connects to the Internet.

Sources say Google has been in negotiations with Wal-Mart Stores Inc., among other retailers, to sell a Google PC. The machine would run an operating system created by Google, not Microsoft’s Windows, which is one reason it would be so cheap — perhaps as little as a couple of hundred dollars.

Bear Stearns analysts speculated in a research report last month that consumers would soon see something called “Google Cubes” — a small hardware box that could allow users to move songs, videos and other digital files between their computers and TV sets.

Larry Page, Google’s co-founder and president of products, will give a keynote address Friday at the Consumer Electronics Show in Las Vegas. Analysts suspect that Page will use the opportunity either to show off a Google computing device or announce a partnership with a big retailer to sell such a machine.

And that’s not the only Google theory out there. Content producers wonder whether Google’s push into video search will unravel the economics that make Hollywood hum. If viewers can find and legally download an episode of “Seinfeld” through Google, will that cut into cable and network television’s profits?

And what if Google, after equipping cities, starting with San Francisco, with Wi-Fi wireless technology, starts to offer pay-TV service for free?

Still, to date, the company’s $123-billion stock market value is based almost entirely on its dominance of one business: global text searches on the Web. Some investors worry that Page and co-founder Sergey Brin could be done in by their penchant for seeing themselves as do-gooders rather than profiteers. But those naysayers are in the minority. Most industry executives and Wall Street analysts believe that Google’s search engine business is robust enough to give the young billionaires two or three years of wiggle room to build nifty services first and worry about making money on them later.

Microsoft comes out swinging

When Microsoft lost its yearlong battle to replace Google as the provider of advertisements on Time Warner Inc.’s AOL Search last month, one analyst described the defeat as “the death knell” for MSN, Microsoft’s Internet service.

Within days, speculation was rampant that Microsoft, determined to keep itself in the game, had offered to buy Yahoo Inc. for $80 billion. If rumors were to be believed, the Microsoft bid — a premium of more than 30% over the Web giant’s current market value — was rejected by Yahoo as too low.

Will Microsoft spend $90 billion or more to buy Yahoo or, alternatively, AOL parent Time Warner? Maybe not, especially when the software giant could buy Barry Diller’s IAC/InterActiveCorp at a fraction of the price. If owned by Microsoft, Diller’s collection of websites such as Ask Jeeves, Expedia, HSN.com, LendingTree and Ticketmaster could help drive traffic to MSN.

Icahn retreats

Wall Street sources said that upon learning of the Google-AOL alliance, bankers at Lazard Ltd. who represented financier Carl Icahn asked Gates to join their team.

The hope was that Microsoft would aid Icahn in his proxy battle to unseat the Time Warner board, split up the company and win control of AOL.

Most media experts, however, are betting that the opposite will occur: Icahn, lacking support from the entertainment giant’s institutional investors, will fold his cards in defeat even before Time Warner’s annual meeting this spring.

It seems like a long shot that Microsoft would throw its lot in with a likely loser. Still, by year’s end, with its Windows operating system buffeted by a low-cost or free Google alternative, Microsoft may think twice about not having pursued a jewel like Time Warner.

Diva wars at NBC Universal

NBC Universal’s Jeff Zucker, who last month pulled ahead of rivals such as sales chief Randy Falco to become the heir apparent to 62-year-old Chief Executive Bob Wright, may not have the throne locked up after all.

Beth Comstock is a dark horse in the race, according to sources close to Jeffrey Immelt, chief executive of General Electric Corp., NBC Universal’s parent.

Comstock was promoted the same day Zucker was, although her elevation to president of digital media and market development earned hardly a postscript in most coverage about the management shuffle.

According to company insiders, Immelt had planned to give Comstock an even larger role: oversight of the all-important advertising and affiliate sales group. Her duties were scaled back, however, when Falco threatened to resign if he was forced to report to her.

But she retained one key perk: a direct report to Wright. Just like Zucker. Is there a turf battle in the offing? Stay tuned.

Jobs (as in Steve) for Disney chairman

Everyone believes that among Walt Disney Co. Chief Executive Bob Iger’s New Year’s resolutions, securing an extended distribution agreement with Pixar Animation Studios is near the top of the list. In fact, the new Disney CEO will consider — albeit briefly — an even bolder move: outright acquisition of the animation superpower behind “Toy Story” and “Finding Nemo.”

Such a purchase would revive the luster of the Burbank-based entertainment giant’s own animation division. It would also be a coup for Iger, given that friction between his predecessor, Michael Eisner, and Pixar Chairman Steve Jobs nearly drove Pixar from the Disney fold.

Ultimately, though, Iger’s instinct for self-preservation will kill the deal as he weighs how Pixar’s purchase price of nearly $10 billion might rattle Wall Street.

What might be harder to swallow for Iger is this: Jobs, who is also chief of Apple Computer Inc., will demand a seat on the Disney board, becoming the leading candidate to replace George Mitchell, who plans to retire as Disney chairman at the end of the year.

Before 2006 ends, Iger will finally name a No. 2: Anne Sweeney, the cable executive whom he credits with reviving the ABC television network.

Adieu, Yahoo

Former ABC executive Lloyd Braun, who was hired by Yahoo more than a year ago to oversee the Internet leader’s foray into original programming on the Web, will exit after clashing repeatedly with Silicon Valley’s laid-back culture.

He will have a soft landing, though, as Paramount Pictures chief Brad Grey hires him to turn DreamWorks Television into a major prime-time TV supplier. That will put Paramount in direct competition with its former division, Paramount Television, which will be absorbed into CBS Inc. when parent company Viacom Inc. splits itself in two Monday.

Les wants to be more

When Chairman and CEO Sumner Redstone announced his intention to split Viacom and put former CBS chief Leslie Moonves and former cable chief Tom Freston atop the two new companies, it didn’t take long for pundits to dub those ventures “Lesco” and “Fresco.” Late last year, however, Viacom insiders adopted new nicknames: “Via-les” and “Via-more.”

That’s because the assets that Moonves will inherit, including radio, billboard and TV stations, have slower growth potential than those that Freston will take on, including MTV, Comedy Central, Nickelodeon and Paramount Pictures.

In 2006, though, Moonves will move to turn “Via-slow” into “Via-grow” through acquisitions in cable, the Web and even movies. Among other things, the former actor, who has long pined to get a foothold in the film business, will make a play for independent studio Lionsgate, which is on a hot streak with such low-budget hits as the “Saw” horror franchise and “Crash.”

But worries about the low returns of the movie biz will cause Redstone to nix Moonves’ attempt to gobble up Lionsgate. The studio instead will be acquired by Yahoo, which will need to send a strong message to the creative community in the wake of Braun’s departure.

MGM changes hands — again

Sony Corp. and the private equity partners that purchased Metro-Goldwyn-Mayer last year will split up, ending an acrimonious alliance marked by missed financial targets and a strategic stalemate. Providence Equity Partners and the Texas Pacific Group, which control a majority of the board, will exercise an option in their agreement to dump Sony as a distributor of the MGM movies.

Comcast Corp., the nation’s largest cable operator and a minority player in the deal, will win a bidding war against CBS, proving that its dire need for original content is a more powerful motivator than Moonves’ desire to become a movie mogul.

Putting the K back in SKG

Paramount Pictures, which in December bought DreamWorks SKG’s live-action operation, will add the publicly traded DreamWorks Animation to its holdings. Grey, the Paramount chief, will offer Jeffrey Katzenberg the same three-year contract Grey negotiated with the S and G of DreamWorks: partners Steven Spielberg and David Geffen.

Katzenberg, who has been antsy for a sale, will accept. To say no would mean running DreamWorks Animation until 2012, when its distribution deal with Paramount expires. And K is too restless, sources say, to wait that long.

AT&T hears an EchoStar

News Corp. Chairman Rupert Murdoch will continue to be at the forefront of the major media giants’ push into new media. But his short attention span will begin to get the better of him as his last pet project — DirecTV Group Inc., the nation’s leading satellite provider, which he purchased two years ago — begins to struggle in the face of cable’s superior bundle of products. Murdoch will consider taking a run at DirecTV’s chief rival — EchoStar Communications Corp., operator of Dish Network — to increase his capacity for providing video enhancements such as high-definition TV.

But he will remain on the sidelines when phone giant AT&T Inc. (formerly SBC Communications) expresses interest. In a bid to provide television in addition to phone and high-speed Internet service, AT&T will abort its high-stakes gambit to wire the country and will buy EchoStar for $20 billion instead.

*Times staff writer Chris Gaither contributed to this report.

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CHICAGO While circulation of the biggest dailies continues its long decline, a new study finds that 81% of adults in small markets read a newspaper every week, and 50% say the local paper is their primary news source.

The survey was commissioned by the National Newspaper Association (NNA), a trade group of mostly non-dailies and small dailies, and was conducted by the Center for Advanced Social Research at the Missouri School of Journalism at the University of Missouri-Columbia. Researchers surveyed adults 18 years old and up in markets with fewer than 100,000 residents.

According to the survey, the local paper is by far the leading news source in these markets. Fifty percent of respondents listed the local newspaper as their “primary source of information about local communities.” That was followed by television at 16%; radio, 9%; and Internet, 2%.

Readers of community papers spend an average of 38 minutes with each issue, and about a quarter of respondents say they keep the paper in the house for six days.

Readers also have a fairly high opinion of their local paper. In the survey, 78% of readers rated local news coverage as “good to excellent.” Some 67% rated the accuracy of their community paper as good to excellent, and 64% rated the writing quality as either good to excellent.

More than half — 58% — rated the “fairness of reporting” as good or excellent.

More than 60% adults in smaller markets have Internet access at home, and 39% of those have broadband service, according to the NNA survey.

One-fifth of community newspaper readers report they have visited their local paper’s Web site in the last month, with some 87% of those saying they visited the paper’s site within the previous week.

According to the NNA survey, readers go to the local paper’s web site for news, sports, and weather 33%; to read older, archived stories 19%; to view obituaries 10%; and to read help-wanted advertisements.

“These numbers don’t quite support ‘the sky is falling’ mantra,” NNA Executive Director Brian Steffens said in a statement. “Part of the problem with reporting on the health and welfare of the newspaper industry is that virtually all of the research has been focused on large daily newspapers serving the top 150 markets.”

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Time Inc. announced yesterday that it would lay off 105 employees, including several longtime high-ranking publishing executives.

The layoffs, effective Dec. 31, are part of a wide-ranging overhaul of Time Inc.’s business side, prompted partly by pressure to offset advertising losses among the company’s 154 publications.

The departing executives include Richard Atkinson, an executive vice president in charge of the news and information group and former chief financial officer; Jack Haire, an executive vice president heading corporate advertising sales; and Eileen Naughton, the president of Time magazine. Fewer than 20 of the departing employees are from the editorial side of the company.

Time Inc., the largest magazine publisher in the country, has more than 13,000 employees and publishes magazines including Time, People, In Style and Real Simple.

Ann S. Moore, the chairwoman and chief executive of Time Inc., appointed Nora P. McAniff and John Squires to serve as joint chief operating officers, a first for the company. Under the new structure, Ms. McAniff will supervise the advertising department and Mr. Squires will manage circulation and marketing.

In a memo sent to staff, Ms. Moore characterized the layoffs as part of a companywide streamlining effort in anticipation of John Huey becoming editor in chief in January.

“This new alignment is the result of a very thoughtful and thorough process to de-layer our management structure, speed decision-making, simplify communications and reduce costs,” Ms. Moore said.

Many of Time Inc.’s top publications have suffered losses of advertising pages in the last year. Fortune magazine and Sports Illustrated each lost about 20 percent of their ad pages from November 2004 to November 2005.

The round of cuts at Time Inc. comes amid intense year-end cost reviews among the business units of the parent company, Time Warner. The Warner Brothers film and television operation has reduced staff by roughly 300 in recent weeks in what company executives have described as a realignment of the business as it positions itself for new digital business models and responds to a slowdown in growth of DVD sales.

Layoffs last week at Warner’s WB television network also came in the wake of the disappointing debut of several new shows and a repositioning of the network for older viewers.

But the Time Inc. move is especially jarring because of the position it has held as the journalistic core of Time Warner, which today is skewed far more heavily toward providing entertainment products than information.

In recent days, Carl C. Icahn, the dissident investor, and Stephen M. Case, the former Time Warner chairman, have called for Time Warner to break itself up as a way to increase its languishing stock price. They have questioned Time Inc.’s role in an increasingly digital media world and wondered how much it has in common with its sibling divisions.

Richard Greenfield, an independent media analyst, said the company’s publishing division was among the least integrated with Time Warner’s online businesses, especially AOL. “It’s all a question of what Time Inc.’s revenue growth potential is and how they see their business model evolving, and how stable are Time Inc.’s revenues going forward,” Mr. Greenfield said. “Can Time Inc. be a killer brand online? If not, they’d better figure out ways to harvest cash from cost-cutting.”

Richard D. Parsons, Time Warner’s chief executive, has said repeatedly that he believes Time Warner’s divisions – including publishing – are worth more as a whole then separated.

Speaking at an investor lunch sponsored by Credit Suisse First Boston in New York last week, Mr. Parsons said he did not feel that magazines were being threatened by online competitors as much as other forms of media. Quoting an unnamed Time Inc. executive, Mr. Parsons said that magazines would thrive as long as there was no technological alternative for the “three B’s: the beach, the bedroom and the bathroom.”

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NEW YORK (AP) Under other circumstances, 2006 might look like a pretty good year for the media industry. The Winter Olympics and a midterm election are sure to boost advertising spending, the economy is humming along and consumers seem to be spending.

But these are hardly normal circumstances. The broad shift of viewers and advertising dollars to the Internet is deeply troubling to many media companies, TV networks are grappling with the implications of ad-skipping technologies, and key advertisers like automakers and retailers are rethinking their ad budgets.

Meanwhile, cable companies like Comcast Corp. and satellite broadcast providers like EchoStar Communications Corp. and DirecTV Group Inc. are facing a new threat from phone companies who are laying down ultrahigh speed fiber optic cables that can carry high quality video as well as data and phone signals to the home.

What’s more, investors are charging the gates at several media companies, demanding that they trim down, split up, boost share buybacks or take other steps to increase shareholder value. Many already have greatly pared down their holdings, and the trend continues.

In November, Liberty Media Corp. told investors that it planned to issue a tracking stock for the home shopping network QVC and Liberty’s related interactive assets. The company calls it another way to streamline its structure, following an earlier spinoff of its overseas businesseses.

“The street is basically intolerant of confusion,” said Harold Vogel, a media investor and author of a widely used textbook on the economics of the entertainment industry.

Viacom Inc., a major media conglomerate, will ring in the New Year with a split into two different companies — one built around the cable networks MTV and VH1, the other anchored by CBS and its TV station group as well as a large radio business, Infinity Broadcasting.

Radio behemoth Clear Channel Communications Inc. is spinning off its live entertainment division, and embattled magazine publisher Primedia Inc., having already pared down many of its holdings, is splitting what’s left in two.

Despite their efforts, however, media companies still have a ways to go before regaining favor on Wall Street. Many investors worry about how they will adapt to the evolving technological landscape, and wonder whether the likes of Yahoo Inc. and Google Inc. may dominate the emerging world of online advertising.

Time Warner, which has come a long way since the 2000 debacle where it agreed to be acquired by AOL, is under fire from billionaire financier Carl Icahn, who wants to nominate new directors and take radical steps to lift Time Warner’s lagging share price, including a $20 billion share buyback and a complete spinoff of Time Warner’s cable unit.

Time Warner is moving to meet shareholders’ concerns, and is now buying back $12.5 billion of its own shares, up from an initial offer of $5 billion. It’s also holding talks with several companies about a possible investment in AOL, which is now back on the upswing thanks to the boom in Internet advertising.

Other media companies are feeling much worse pressure. Knight Ridder Inc., the second-largest newspaper publisher in the country, is under attack from its largest shareholders, who are demanding that the company be sold.

At the same time, other newspaper companies around the country have also been cutting jobs and other expenses in an effort to contain costs as their revenues falter. Newsprint and employee benefits costs have been rising, while advertising growth has been tempered as more ad dollars move to the Internet.

Yet as Knight Ridder moved to please stockholders by buying back shares, the increased borrowing led to two downward revisions in its credit rating. Likewise, The New York Times Co. and Dow Jones & Co. also had their ratings lowered after borrowing money to acquire Internet companies.

Bond holders also tend not to be as enthusiastic about the media companies’ drive to trim down their portfolios.

“On the credit perspective, there is a benefit from portfolio diversification,” says Heather Goodchild, chief media analyst at the Standard & Poor’s credit rating agency. “If one of your cylinders is not firing, the others may be,”

Tough to please everybody? You bet. Goodchild calls it a “tough love” time for the media.

As for 2006, who knows what kind of technology may come along that could challenge traditional media business models anew. This time last year, could anyone have predicted you would see Walt Disney Co.’s ABC selling episodes of “Desperate Housewives” for $1.99 to watch on your video iPod?

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