In 1879, an editor for the Cleveland Press described the fundamental driving force behind the media like this:
“We are in the newspaper business for the same purpose as that of most people who go into business – to make money.” (Hamilton, 47)
Now fast forward 130 years.
“I built this business to throw off a billion dollars in profit…That was the goal from Day 1. In my own mind.”
That is how Roger Ailes described the mission of the Fox News channel in a 2010 interview with the New York Times.
While we have seen a dramatic transformation of mass media over the last century, driven primarily by advances in information technology, one thing perhaps has not changed – the bottom line. While we (or at least I) would like to think the media environment is shaped to maximize public benefit utilizing the newest and most effective means possible, it seems that is only true to the extent that this goal is compatible with the media’s inherent orientation to maximize profits. This was true in 1879, and it is true today.
The transition from the partisan to independent press between 1870 and 1900 provides a useful lens to demonstrate this reality, and it may also be helpful in explaining recent changes in the media environment. As James Hamilton explains, “objective news coverage is a commercial product that emerges from market forces” (37). In the late 19th Century, those forces included an increase in newspaper readership, a decrease in costs of newspaper production and the new role advertisers played in generating revenue.
Because they could reach a wider audience more cheaply, most newspapers saw an economic advantage in making their coverage have the broadest possible appeal – which meant no longer serving up content for a particular niche political audience and instead becoming independent of any political party. It was a rational decision, motivated by profit rather than what is now viewed as a desired practice of journalistic objectivity.
When we look at the media landscape today, compared to just a few decades ago, we are seeing another shift, in the precise opposite direction. Walter Cronkite has essentially been replaced by Bill O’Reilly. From cable television to internet blogs, we are seeing a proliferation of news sources that slant their coverage to appeal to particular ideological audiences. Why is this?
If the past teaches us anything, it is because the news business has found a more lucrative model to distribute content. We can use Hamilton’s “five Ws” to understand this. First, who cares about a particular piece of information? It seems nowadays entertainment news has more broad appeal than information to help people make political decisions (maybe because of a decline in civic education?), and this kind of “news” lends itself to more partisan, conflict-oriented content. Second, what are other willing to pay to reach them? Because transaction costs have drastically declined, outlets that are able to target a niche ideological audience can find a host of advertisers to market them to. Years ago, this may not have been possible.
The third and fourth W’s are where can media outlets or advertisers reach people and when is it profitable to provide the information? Fixed costs for content production, in the Internet age, have almost bottomed out. Aside from human resources, a person can have their own printing press for virtually no cost online. Therefore, a huge audience is no longer necessary to sustain a media outlet; a smaller but more demographically cohesive readership may be more valueable for advertisers than a larger, heterogeneous readership. Lastly, why is this profitable? Again, market research in the modern day has produced precise demographic targets for advertisers, and the closer their targets match a readership for a given news outlet, the more valuable that readership becomes.
History tells us that economic incentives have a great effect on content production. With this in mind, as Hamilton writes, changes come “at predictable times and at predictable places” (39). With an entertainment-driven society, a collapse in transaction costs between advertisers and media outlets, the increased ability to market niche audiences to advertisers, and even smaller fixed costs to news production than ever before – it makes sense why our media environment is becoming more fragmented and is narrowcasting to specific audiences.
The incentive structure has changed, and the news business is responding.