Thursday, May 19, 2005
Topic of the Day: The Media
Today's Topic of the Day was inspired by the simply awesome article in the NYTimes by Virginia Postrel on the Economics of Media Bias.
This particular topic--specifically the business model of being biased--is something I've wanted to talk about for quite some time. I probably waited till now because this was the first time a respected news source came at it from the proper angle. Before it was always the already-quite-biased crowd making allegations to suit their political whims. Postrel's article is more of an academic look at the fascinating "New Media", as many call it.
Postrel begins with the pivotal question:
Some people say they want "just the facts," and fault reporters for introducing too much analysis. Others complain that stories do just the opposite, treating all sides in a conflict as equally valid. The news-buying public seems to want contradictory things.Two responses. First, it's funny she started off with "Some people say". Had to throw that one out there.
But one person's contradiction is another's market niche. Those differences help answer an economic puzzle: if bias is a product flaw, why does it not behave like auto repair rates, declining under competitive pressure?
Second, in the Old Media era, conservatives claimed that the print and television media were biased. The typical liberal economist responded with: "well you're huge on free markets, so if its such a problem why isn't the market sorting itself out?". Ultimately, and ironically, it was likely the conservative dominance of talk radio that slowed market change. What was the tipping point? Staunch conservatives may argue it has something to do with a certain Commander-in-Chief giving a blowjob to a fat chick. Staunch liberals might push that it was the evil genius of Rupert Murdoch that forced Old Media into New Media.
I digress, Postrel continues:
In a recent paper, "The Market for News," two Harvard economists look at that question. "There's plenty of competition" among news sources, Sendhil Mullainathan, one of the authors, said in an interview. But "the more competition there has been in the last 20 years, the more discussion there has been of bias."Who needs to spend millions on loyalty programs like casinos and cruise lines when you can just spout your opinion for free?
The reason, he and his colleague, Andrei Shleifer, argue, is that consumers care about more than accuracy. "We assume that readers prefer to hear or read news that are more consistent with their beliefs," they write. Bias is not a bug but a feature.
In a competitive news market, they argue, producers can use bias to differentiate their products and stave off price competition. Bias increases consumer loyalty.
(all emphasis mine)
The theory I've been pondering over for months is fairly simple: the Media will eventually fall into two segments, the spin-media and the back-office media. The spin media will then segment itself into various political entities. The Spin Media, of which FNC is the most criticized (like this C&L picture), will play itself off as normal, trustworthy media. The Back-Office Media, as I call it, is more of the work-horse media that provides un-spun content, primarily to the Spin Media (essentially how AP works right now) and to a lesser degree to the general public. Most of the end user consumed media will be spin, so get used to it.
Will this be good for our country? Hell no. But its a lot better than what we have right now. At the point where everyone understands the market structure--much like everyone understands where Wal-Mart, Target, and K-Mart sit in the retail giant market structure--then things should be better than they are right now.
Until then? Bloggers are going to have a field day with the Media.
Oh, and its safe to assume CNN will be the last outlet to figure all this out.