Exclusives, Embargoes, and Art Indices

If it’s true, it’s great news that the WSJ is putting the kibosh on the ridiculous institution of respecting embargoes fed to them by PR agencies. For something as important as a national data release, I can see why it’s a good idea to implement such a thing. But when it’s just some private-sector flack trying to orchestrate a publicity drive, there’s zero reason for large publications to play along.

One of the weirdnesses of the news business is that its practitioners — journalists — care greatly about who broke any given story: who published it first. Readers, by contrast, generally don’t care at all. The only time they do care is (a) when the story is market-moving; (b) when they’re active participants in that market; and (c) when they actually see the story within seconds of it coming out. The chances of all three things happening are so slim that one would think that no one would spend too much effort on such occurrences; one would be wrong.

Nick Ragone says that the WSJ’s new policy is “probably going to reduce the number (and quality) of exclusives that they break”. Fine. Big deal. Journalists should care much more about the quality of what they write, and much less about whether or not they have an exclusive. Indeed, having an exclusive is a bit like having a “get out of jail free” card: quality, in that case, is always Job Two, and often goes by the wayside.

Not to pick on any particular story, but I just happen to have this one open in a browser window:

Art prices plunged during the first quarter of the year as cash-strapped collectors looked to unload works by postwar masters that had earlier boomed in price along with the stock market.

The Mei Moses index, set for release today, shows art prices fell 35 per cent in the first quarter, having held up during earlier months of the financial crisis.

The key phrase here is “set for release today”: to inside-journalism cognoscenti, what that means is that the journalist in question got the exclusive, and in return the Mei Moses people saw their story on the front page of the FT. Similarly, if you’re a household-name corporate CEO and you grant an interview to the FT, they’re pretty much guaranteed to turn it into a front-page news story, even if you commit no news at all.

In any event, the art-price story is a little bit confusing, and doesn’t even attempt to clear up the weird inconsistencies in the Mei Moses data, such as the fact that the All Art index fell by 35% even as no individual component fell by more than 33%.

A closer look at the Mei Moses news reveals that it’s basically little more than a publicity stunt: the Mei Moses index comes out annually, not quarterly, precisely because — well, let me quote the quarterly report itself:

To obtain statically meaningful results, we have found an annual time period to be the shortest time period that is feasible.

In other words, the 35% figure is based on just one quarter of the period of time considered the minimum to be statistically meaningful. What’s worse, it turns out that the 35% figure is also based on something called the All Art index, which specifically excludes all of the London sales in the first quarter — thereby becoming even less statistically meaningful.

Essentially, the 35% figure is derived from the sale of artworks (a) at auction; (b) in New York; (c) which have been sold at auction in New York in the past. Do you think that there were enough such sales to be able to derive a useful datapoint? I don’t. But given the opportunity to get some front-page publicity by putting out a largely-meaningless quarterly report, the Mei Moses people found themselves unable to resist. Maybe if the FT joined the WSJ in rejecting artificial exclusives, such things might not get the play they currently do.

(Thanks to crack Reuters media reporter Robert MacMillan for pointing me to the Ragone blog entry.)