• by Gord Hotchkiss , Featured Contributor, November 3, 2020

Last week, I talked about the free news problem. In thinking about how to follow that up, I ran across an interesting study that was published earlier this year in the Science Advances journal. One of the authors was Duncan Watts, whom I’ve mentioned repeatedly in previous columns.

In the study, the research team tackled the problem of “fake news,” which is — of course — another symptom of the creeping malaise that is striking the industry of journalism. It certainly has become a buzzword in the last few years. 

But the team found that the problem of fake news may not be a problem at all. It makes up just 0.15% of our entire daily media diet. In fact, across all ages in the study, any type of news is — at the most - just 14.2% of our total media consumption. 

The problem may be our overuse of the term “news” — applying it to things we think are news but are actually just content meant to drive advertising revenues. In most cases, this is opinion (sometimes informed but often not) masquerading as news in order to generate a lot of monetizable content. Once again, to get to the root of the problem, we have to follow the money. 

If we look again at the Ad Fontes Media Bias chart, it’s not “news” that’s the problem. Most acknowledged leaders in true journalism are tightly clustered in the upper middle of the chart, which is where we want our news sources to be. They’re reliable and unbiased. 

If we follow the two legs of the chart down to the right or left into the unreliable territory where we might encounter “fake” news, we find from the study mentioned above that this makes up an infinitesimal percentage of the media most of us actually pay attention to.

The problem here can be found in the middle regions of the chart. This is where we find something called analysis. And that might just be our problem.

Again, we have to look at the creeping poison of incentive here. Some past students from Stanford University have an interesting essay about the economics of journalism that shows how cable TV and the internet have disrupted the tenuous value chain of news reporting.

The profitability of hard reporting was defined in the golden age of print journalism — specifically, newspapers. The problem with reporting as a product is twofold. One is that news in non-excludable. Once news is reported, anyone can use it. And two is that while reporting is expensive, the cost of distribution is independent of the cost of reporting. The cost of getting the news out is the same, regardless of how much news is produced. 

When newspapers were the primary source of news, these two factors could be worked around. Newspapers came with a built-in 24-hour time lag. If you could get a one-day jump on the competition, you could be very profitable indeed.

Secondly, the fixed distribution costs made newspapers a very cost-effective ad delivery vehicle. It cost the newspapers next to nothing to add advertising to the paper, thereby boosting revenues. 

But these two factors were turned around by he internet and cable news. If a newspaper bore the bulk of the costs by breaking a story, cable TV and the internet could immediately jump on board and rake in the benefits of using content they didn’t have to pay for.

And that brings us to the question of news “analysis.”  Business models that rely on advertising need eyeballs. And those eyeballs need content. Original content -- in the form of real reporting -- is expensive and eats into profit. But analysis of news that comes from other sources costs almost nothing. You load up on talking heads and have them talk endlessly about the latest story. You can spin off never-ending reams of content without having to invest anything in actually breaking the story. 

This type of content has another benefit: Customers love analysis. Real news can be tough to swallow. If done correctly, it should be objective and based on fact.  Sometimes it will force us to reconsider our beliefs. As is often the case with news, we may not like what we hear.

Analysis -- or opinion -- is much more palatable. It can be either partially or completely set free from facts and swayed and colored to match the audience’s beliefs and biases. It scores high on the confirmation bias scale. It hits all the right (or left) emotional buttons. And by doing this, it stands a better chance of being shared on social media feeds.

Eyeballs beget eyeballs. The gods of corporate finance smile benignly on analysis content because of its effectiveness at boosting profitability.

By understanding how the value chain of good reporting has broken down due to this parasitic piling on by online and cable platforms in the pursuit of profit, we begin to understand how we can perhaps save journalism. There is simply too much analytical superstructure built on top of the few real journalists doing real reporting. And the business model that once supported that reporting is gone. 

The further that analysis gets away from the facts that fuel it, the more dangerous it becomes. At some point it crosses the lines from analysis to opinion to propaganda. The one thing it’s not is “news.”

We need to financially support, through subscription, the few outlets still reporting on the things that are actually happening.