the audit

Audit Notes: Daisey vs. Pogue, American Banker, LAT Paywall

February 24, 2012

Mike Daisey, of The Agony and Ecstasy of Steve Jobs, and the recent This American Life exposé of Apple’s outsourced China factories, shreds The New York Times‘s David Pogue over his apologia for Apple’s labor practices (I criticized Pogue for an earlier post on the Apple controversy).

In a mostly excellent rant (apart from questioning whether Pogue is being “manipulative” and “deceptive”) headlined “David Pogue Is Only Competent To Review Gadgets,” Daisey writes:

Is this Mr. Pogue’s tacit admission as to why he’s so ignorant of its facts? Because even though it is about the circumstances under which his technology is made, it is not a technology story?

Presumably that is because technology stories involve blinking lights, whirring sounds, and someone foursquaring from Silicon Valley while they update their Tumblr. It doesn’t involve, in Mr. Pogue’s view, such unsightly things as labor, work, and the real cost of an actual device.

He had an opportunity to study this story. He’s had the time to read and get up to speed. He could have been in the forefront, telling it, and instead he’s in the rearguard, behind the mainstream press who is doing technology journalists’ job for them, picking at the leftovers, making faces, and wondering when he can get back to slagging off the new Samsung tablet and embracing the next Apple device.

I’m not asking that Mr. Pogue agree with me. I’m saying he has shown he isn’t competent to have this conversation from the platform of the New York Times.

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(h/t Felix)

American Banker‘s Jeff Horwitz continues to examine the forced-place insurance industry, reporting that a Florida judge has given class-action status to a suit against Wells Fargo. The judge accused Wells of threatening its customers who considered joining the suit.

The Banker writes that forced-place companies like Wells partner QBE are “being accused of paying unearned commissions to banks, charging high rates and backdating policies to boost premium revenues.” Kickbacks, in other words.

What’s sweet about this story is that the Banker got court documents in PACER a few days before Wells got the judge to seal them. Here’s what it found as a result:

QBE pays out 40% of total force-placed premiums as commission to its subsidiaries and Wells Fargo, the Florida plaintiffs charge. And only 7.6 cents of every dollar of premium revenue QBE collects goes to paying claims, according to a plaintiffs’ analysis based on QBE data. Such a low payout ratio would be regarded as unacceptable in most states. Guidelines laid out by the National Association of Insurance Commissioners instruct insurers to aim for a payout of 60%.

What’s extra sweet is that these documents show the impact of an earlier Banker story (from April of last year) on the Wells litigation:

Emails presented in those documents suggest that Wells employees themselves were uncomfortable with the high premiums QBE was charging Wells’ borrowers. Following an American Banker article alleging that force-placed insurers were charging as much as 10 times the cost of borrowers’ previous hazard insurance, an unnamed Wells executive allegedly told colleagues that the bank needed to rein QBE in.


— It looks like most of the newspaper industry will be behind leaky paywalls before you know it. It’s ten or fifteen years past due, but it’s better late than never (unless you’re The Wall Street Journal, which has always charged).

The Los Angeles Times is the latest paper to charge online, offering what it calls a “membership plan” with discounts and deals and whatnot.

It’s being aggressive on price, charging a bit more even than The New York Times, which has not, unlike the LAT, gutted its newsroom in recent years. It will cost $3.99 a week, or about $207 a year, for the LAT. The NYT charges $3.75 a week, or
$195 a year.

Taking a cue from the NYT, the LAT will give you a discount if you buy the Sunday paper only. That’s the big moneymaker of the week, so papers need to incentivize readers to continue taking that edition.

The LAT‘s story says this, paraphrasing a media analyst:

But it is likely to be a difficult transition taking many years. Atorino said the New York Times has not sold digital subscriptions at the rate he expected. He said most of the subscriptions it sells are highly discounted, diminishing the revenue gain. The company does not break out its revenue for digital subscriptions. Publishers believe that readers will pay for good journalism.

I’m not sure where Atorino got that information. I haven’t seen that anywhere.

Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR’s business section. If you see notable business journalism, give him a heads-up at Follow him on Twitter at @ryanchittum.