Ch. 7: Funding the Media in the Internet Age
At a time of declining trust in institutions, the media is among the most severely affected.
Who still trusts the media as a class? Very few, according to a 2020 report from the Reuters Institute at the University of Oxford. Out of forty countries, the proportion who trust most news most of the time exceeds 50 percent in only six countries. In the US, the UK, France, and Italy, it is below 30 percent.
Trust is not only low, but declining: on average, it fell from 42 percent in 2019 to 38 percent in 2020.
A key factor draining confidence is the increasing partisanship of the population, a trend mirrored in some countries by an increasingly partisan media. A good example of this is The New York Times, which has generated a number of internal and external critics whose view could be summarised in the words of Eric Weinstein who said that "activism has taken over."[0]
There is certainly good evidence that the Times has become increasingly invested in the left-wing worldview, a trend which has triggered a sense of betrayal in those who previously regarded it as the impartial newspaper of record. Consider the following graphs compiled by Zach Goldberg, which illustrates the growing use of key terms associated with leftism:
One could be charitable to the Times, noting for example that it also employs right-of-center columnists such as Ross Douthat and Bret Stephens, thereby maintaining at least some commitment to balance. But the change was certainly partly conscious: a past book review noted an “interesting anecdote about Dean Baquet, executive editor of the New York Times, where he describes the pivot they would make: readers had grown tired of the Russian story. He described that as Chapter One of the Trump story; the next one would be about racism”.
But why this strategy, and why now? The rise of the Internet means that newspapers are no longer able to rely on stable advertising revenues. The main feasible alternative is digital subscriptions. And how does one increase these? With the same ideological fervour they amplify. The spike in revenue after the election of Donald Trump (the "Trump Bump") indicates that this is a profitable strategy, as we can see from the following graph:
Source: Reuters Institute Digital News Report 2020, p. 21
Because partisanship is strategic, criticism is futile; if the Times and other media outlets are rationally adapting to a viable market niche, they won't change their course due to criticism which only intensifies the partisan energy which they feed off. Changing their behaviour means would mean changing the environment.
The goal of this chapter will be to propose one possible way to do this, for a large community (sub-national, national, or transnational) that wishes to save media outlets from compromising themselves for profit. The idea is to create a model for funding what is essentially a public good — information— but in a way that accommodates differing material interests and political preferences.
However, before we go further, we must note that the problems with the media did not just begin with the Internet. What are the other issues we should aspire to solve?
7.1 Current Landscape
One alarming common factor across the West is the concentration of media ownership in the hands of the wealthy. Silvio Berlusconi’s Mediaset is the largest commercial media group in Italy, a position he ruthlessly exploited to maintain a strong position in Italian politics for around fifteen years: a time distinguished chiefly by dysfunction and dissipation.
Even setting aside the Berlusconi period in politics, the legacy of Mediaset will persist for a long time. One team of researchers sought to evaluate the effect of Mediaset’s entertainment-focused content on the Italian population. Comparing areas where Mediaset first arrived to those where it came later, they found that those exposed to Mediaset while young possessed significantly worse numeracy and literacy skills.[81] Along with being more inclined to vote for populist parties, they were also 8 to 25 percent more likely to receive very low scores on psychometric tests.
A similar situation exists in United Kingdom, where the animus of Rupert Murdoch towards the European Union was channelled through his newspaper The Sun. But it would be too simple, and probably wrong, to say that the problem with the media is that the political opinions of their owners determine their editorial policy.
Murdoch certainly disliked the EU. He once reportedly remarked that he opposed the EU because “when I go into Downing Street they do what I say; when I go to Brussels they take no notice”.[82] When the Brexit referendum was passed, he compared it to escaping from a prison.[83] But The Times, which he also owns, backed Remain.[84]
Similarly, the billionaire media baron Lord Rothermere owned two newspapers with opposing stances: the Daily Mail which backed Leave, and the Mail on Sunday which rowed in behind Remain.[85]
This may seem contradictory, but the logic is very simple: if you really want to make money, you have to appeal to both sides of the market. Media oligarchs may consider themselves influentual, but they themselves are governed by their own impulse to make money, and this impulse manifests itself in tabloids and television that appeal to the basest desires, the crudest emotions, and the most primitive instincts, as one can easily see in the steady stream of scantily clad women and vapid celebrity gossip they ofter furnish to their readership and viewers.
Such will be the legacy of Murdoch in the UK, which hosts just one part of his mostly sulfurous empire. He also heavily influences American media through his ownership of Fox News: a highly partisan outlet in what is probably the most partisan media landscape in the West. Even something as serious as the Coronavirus could only be viewed through partisan lens, with some Fox News hosts (with the exception of Tucker Carlson) downplaying it for fear that it would hurt Trump who, after early travel bans, himself consistently downplayed the virus by equating it to the flu.[86]
Left-wing outlets were not blameless however: representing bien pensant liberal opinion, they sometimes warned that closing the borders would not be a solution.[87] A virus may have been spreading, but we were urged not panic for fear that we would forget to protect the sacred cows. But eventually, the virus killed those off too when the borders shut. The end result of this partisan rigmarole, aside from an infected population, was that trust in the media fell even further while trust in every other institution rose.[88]
Not every country’s media is dominated by the private sector. In France, for example, the state subsidises the media to the tune of €80 million annually.[89] But this has led Edwy Plenel, former editor-in-chief of Le Monde, to denounce the French media as being in the pocket of the government, to the detriment of independent investigation. Mediapart, an online journal he founded, has adopted the maxim “only our readers can buy us” and survives solely on reader subscriptions.[90]
But even despite public subsidies, and despite the occasional truly independent model, the power of private moneyed interests in France is still palpable. The flailing Le Monde was taken over by two billionaires and a banker (who nevertheless conceded continued editorial independence). The billionaire Dassault family owns the main paper of the centre-right, Le Figaro.
So as we can see, the Western media is in a dire state. But there are problems other than ownership.
7.2 Structural Weaknesses
First, the revenue of traditional media organisations has been falling precipitously for some time now (see the below graph). This has several causes. Classfied ads, such as those for property and car sales in a given area, are now on sector-specific platforms. Furthermore, people have begun to consume more news online. While we mostly benefit from news and analysis being produced, few are willing to pay for it as it can often be obtained free of charge elsewhere.
Source: Carpe Diem Blog
Second, there may be a shortage of competent journalists, reporters, and analysts. The uncertainty surrounding the future of the media disincentivises people from entering the profession. Even in the past, it was probably true that the journalistic career was less predictable than that of say a lawyer or accountant. That it is becoming even less so ought to be a cause for concern.
Third, regarding public service broadcasting, citizens are obliged to pay but they have no choice in the content produced. This means that public service broadcasters can push their political point of view while holding their funders captive. In some countries, public service broadcasters may not even face a level of competition sufficient to ensure they provide value for money to the citizens.
Finally, in a world where corporate advertisers account for a large share of media revenues, the media will have an interest in not antagonising these companies. For example, Peter Oborne, the former chief political commentator at the Daily Telegraph, stated that news stories critical of major international bank HSBC were discouraged so as not to lose a valuable advertising contract.[91] This occurred at a time when that same bank was involved in assisting tax evasion.
However, foreign countries can also acquire influence through the purchase of advertising. For example, following the beginning of the trade war with the US, China purchased a four-page supplement in the Des Moines Register, Iowa’s newspaper of record.[92] This was not an exceptional case. A report from the The Guardian stated that thirty foreign newspapers, including the New York Times, the Wall Street Journal, the Washington Post and the Daily Telegraph, all had a similar arrangement at some stage.[93] The Daily Telegraph received £750,000 per year to carry a once-a-month insert.
In addition, Saudi Arabia and other Arab countries have partly funded certain American think tanks. This raises an important point: when the main organs for disseminating information and analysis are reliant upon companies and foreign countries, is it any wonder we end up living in a society dominated by moneyed interests?
People often assume that we can reduce the influence of money on politics by controlling campaign donations. But as the influence of money goes much further, so must any efforts to root it out. The question is one of institutional engineering: how can we move from a media motivated mostly by profit to one that is mostly motivated by the search for truth?
7.3 Towards a Popular and Informative Media
How do ensure that we have an effective media that engages a wide range of people? The latter is critical as if this new media ended up catering to a very small number of intellectuals, it would not improve the knowledge of the community as a whole, a significant motivation of this reform.
Thus we need two incentives: one to raise the quality of news, and another to ensure popularity. Relatedly, we need to ensure that the community or state cannot exert too much control over the media.
In order to ensure that the media caters to the taste of the broad community, the new system could be modelled on how religions are funded in Germany. In the German system, each citizen who is a registered member of a religion is obliged to pay a certain percentage of their income tax to that church.
Modifying this system to the media, each person would be obliged to pay a certain sum — say 1pc of the income tax that they pay — to a media chapter of their choice. A media chapter would simply be a chapter or club devoted exclusively to providing news and analysis by say a publishing a website, making documentaries, or funding investigations. This is similar to the idea of the media club put forward by Arnold Kling, with a key difference being that Kling does not see a contribution being mandated as part of being a citizen or a member of a community.[94] Rather, he sees it as a way to introduce a viable economic model into the media domain.
Similar to his club, however, our media chapters could provide indexing and annotation services, along with recommendations. Content would be available to non-members: membership of a chapter can thus be likened to a vote for what kind of content you would like to see produced. In addition, journalists, essay-writers, and other content producers would be paid by the chapter.
If citizens are not happy with what is being provided to them, then they can switch chapters. Ideally, there should be a certain minimum of chapters in order to ensure sufficient representation of those across the political spectrum. But the chapter’s mission must include not only the provision of popular content, but also the search for truth and the education of its readers. Thus there needs to be another funding mechanism to incentivise these two latter goods.
One way would be for affiliated members to make predictions based on the articles they are reading. The better the members of a given media chapter are at predicting the future, or even at knowing real-world facts, then the more funding that media chapter should get. Readers could be incentivised to make correct predictions by small cash prizes. Alternatively, a chapter or individual newspaper could require their journalists to make predictions and publicise the results. The chapter’s funding could then be linked to its success. Half of the funding could be allocated on the basis of popularity, and the other half on the basis of predictive accuracy.
Now we return to our question from the previous chapter: how could such predictions be proposed and adjudicated? Let’s assume there would be twelve media chapters. First, each chapter could annually propose ten questions. They would also propose one person each to a committee that would decide the criteria by which predictions would be evaluated. In order to ensure such criteria are fair to all, a majority of ten out of twelve would be needed to approve the criteria selected.
Another overall aim of this reform would be to reduce or eliminate the reliance of news organisations on advertising revenue and corporate funding. Therefore, the chapters themselves should be prohibited from receiving any funding from those sources. Their only incentive will be to promote content which is popular and informative. The ultimate effect of the above system would be to partly replace the master algorithm of profit with that of informativeness.
With such a system, we would go a long way towards reducing the pathological nature of news in the Internet era. However, it neither perfectly nor completely eliminates the flaws of the media. For example, in Manufacturing Consent Herman and Chomsky noted how bias is introduced by the reliance of the media on government, business and "experts" for information to report: a reliance that leads them to tailor their reporting so as not to alienate these interests. Another factor they discuss is that of “flak”, whereby negative reporting of a subject could induce costs such as lawsuits.
For the flaws to be completely rectified, this media system would probably need to be a part of a broader Metasophist community—the design of which is explored in the other chapters of this book.
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Previous chapter: How to Select an Elite
This chapter was first published in August 2020, and edited in February 2021.
Endnotes
[0] A particular flashpoint in this conflict was when the Times first sought to de-anonymise Scott Alexander, a blogger popular in Silicon Valley, and later published a negative article about him. Their approach was criticised by many; for example, an article by Matthew Yglesias noted how the Times piece tried to invoke guilt by association in order to portray Silicon Valley as generally racist and sexist.
[81] Ruben Durante, Paolo Pinotti, and Andrea Tesei. “The Political Legacy of Entertainment TV”. in: American Economic Review 109.7 (July 2019), pp. 2497–2530. URL: http://www.aeaweb.org/articles?id=10.1257/aer.20150958
[82] Anthony Hilton. “Anthony Hilton: Stay or go the lack of solid facts means it’s all a leap of faith”. In: The Evening Standard (Feb. 2016). URL: https://www.standard.co.means-it-s-all-a-leap-of-faith-a3189151.html
[83] Heather Saul. “Rupert Murdoch gives his verdict on ’wonderful’ Brexit”. In: The Independent (June 2016). URL: https://www.independent.co.uk/news/people/brexit-rupert-murdoch-the-sun-eu-referendum-a7108621.html
[84] Roy Greenslade. “The Times goes for remain, days after Sun backed Brexit”. In: The Guardian (June 2016). URL: https://www.theguardian.com/politics/2016/jun/17/eu-referendum-the-times-the-sun-brexit
[85] Peter Preston. “Viscount Rothermere: a media baron who keeps his distance”. In: The Guardian (Dec. 2016). URL: https://www.theguardian.com/media/2016/dec/18/viscount-rothermere-my-media-baron-of-the-year-hands-off-owner
[86] Lee Moran. “Scathing Supercut Hails The Fox News Hosts, Republicans Who Are ‘Heroes Of The Pandumbic’”. In: (Apr. 2020). URL: https://www.huffpost. com/entry/coronavirus-supercut-pandumbic-daily-show_n_5e882bbec5b6e7d76c643190
[87] See for example: Farhad Manjoo. “Beware the Pandemic Panic”. In: The New York Times (Jan. 2020). URL: https://www.nytimes.com/2020/01 /29/opinion/coronavirus-panic.html, Lenny Bernstein. “Get a grippe, America. The flu is a much bigger threat than coronavirus, for now.” In: The Washington Post (Feb. 2020). URL: https://www.washingtonpost.com/health/time-for-a-reality-check-america-the-flu-is-a-much-bigger-threat-than-coronavirus-for-now/2020/01/31/46a15166-4444-11ea-b5fc-eefa848cde99_story.html, Shirin Ghaffary. ““No handshakes, please”: The tech industry is terrified of the coronavirus”. In: Vox (Feb. 2020). URL: https://www.vox.com/recode/2020/2/13/21128209/coronavirus-fears-contagion-how-infection-spreads
[88] Justin McCarthy. “Coronavirus Response: Hospitals Rated Best, News Media Worst”. In: Gallup (Mar. 2020). URL: https://news.gallup.com/poll/300680/coronavirus-response-hospitals-rated-best-news-media-worst.aspx
[89] Pauline Moullot. “Est-il vrai que l’Etat a versé en 2016 près de 80 millions d’euros pour la presse ?” In: Libe´ration (Mar. 2018). URL: https://www.liberation.fr/millions-d-euros-pour-la-presse_1653310
[90] Rédaction France. “Interview with Edwy Plenel on: freedom of the press, journalism and the Yellow Vests”. In: (Mar. 2019). URL: https://www.pressenza.com/2019/the-yellow-vests/
[91] John Plunkett and Ben Quinn. “Telegraph’s Peter Oborne resigns, saying HSBC coverage a ‘fraud on readers’”. In: The Guardian (Feb. 2015). URL: https://www.theguardian.com/media/2015/feb/17/peter-oborne-telegraph-hsbc-coverage-fraud-readers
[92] Jason Margolis. “Iowans get a giant ad from China in their Sunday newspaper”. In: Public Radio International (Sept. 2018). URL: https://www.pri.org/stories/2018-09-24/iowans-get-giant-ad-china-their-sunday-newspaper
[93] Louisa Lim and Julia Bergin. “Beijing is buying up media outlets and training scores of foreign journalists to ‘tell China’s story well’ – as part of a worldwide propaganda campaign of astonishing scope and ambition”. In: The Guardian (Des 2018). URL: https://www.theguardian.com/news/2018/dec/07/china-plan-for-global-media-dominance-propaganda-xi-jinping
[94] Arnold Kling. The Club Vs. the Silo (2001). https:/arnoldkling.com/~arnoldsk/aimst4/aimst406.html. Accessed: 2018-10-12.