The Economy of Words

June 1, 2004

The following is excerpted from an interview on WUNC radio's news/talk program The State of Things, which aired February 11. Frank Stasio was the host.

Do the big networks, the cable television channels, and the newspapers have a moral obligation to present the news that is impartial and comprehensive? And if so, how do economic factors affect that mission?

In his new book All The News That's Fit to Sell, economist and Duke professor James Hamilton explores the role of economics in news coverage. We're also joined by John Dancy, former White House and foreign correspondent for NBC News and now a [visiting lecturer teaching] journalism at Duke University.

Dancy

 Two views on the state of news: 
Dancy, top, and Hamilton, below. Photos: Les Todd

 
 
Hamilton

Stasio: There are really two central objections to how news is managed these days. One is that it's not serious enough. And you point out that, in a sense, this is driven by the profit motive.

Hamilton: Competition and the drive for profits can change the type of news offered. As you get more competitors in a market, each outlet may be able to attract fewer eyeballs, and that means less advertising sold. Lower advertising per outlet means less money for you to create quality journalism. At the same time, as you get more competitors, you get niche targeting. People have to differentiate their programs from what others are saying. And so the pressure to say something distinctive to generate attention can lead to more opinion and bias mixed in with the news.

For instance, the Fox News Channel: Maybe their question was, We could be really profitable--in fact, we could have the highest rating for a news show on cable if we attract just 2 million viewers. How do we do that? Well, their answer is called The O'Reilly Factor.

Stasio: The other objection is that the news is biased. As you surveyed demographic groups, you found that their sense of biased coverage changes.

Hamilton: That's right. Look at the network evening news. If they're chasing those marginal viewers, a lot of their stories are aimed at people in their thirties, particularly females in their thirties, because they're the most valued by advertisers--in part because they make purchasing decisions. And so if you look across demographic groups and say, do you think the media are biased? females in their thirties are the least likely to say yes. And if you ask them, are you frustrated by the types of things shown on the news? they're the least likely to say yes to that, too.

Stasio: You talk about in your book that, with the Internet, the newspapers can figure out who is reading the paper and what stories they're interested in.

Hamilton: That's right. And it also allows you to sell advertising keyed to particular topics. Or even search terms. If you look on the Internet, hard news is actually more discussed than soft news. And that's because you have nonprofits and government sites willing to put out information. But when you go back to the search engines and ask, What are people searching for?, hard-news searches dominate soft-news searches by a ratio of about two to one. And if you look at advertiser support for search terms being associated with a hard-news topic, they'd much rather and would be more willing to pay more for a soft-news topic such as Britney Spears or Metallica.

Dancy: And people are still branding on the Internet. They still go to the Wall Street Journal, The New York Times, The Washington Post. They don't go to alternative publications in large part.

Hamilton: If you look at the top 100 newspapers in the U.S., the top five--the Wall Street Journal, The Washington Post, The New York Times--they get about 20 percent of all the circulation. But if you look on the Web, the top five newspapers in terms of Web traffic get 40 percent. So it's possible for you to live in a rural area and read The New York Times or The Washington Post. The thing that I worry about is, where do you get high-quality local news? Is there a New York Times of your local county? And that's a real market failure.

Stasio: So do you think media organizations have a responsibility to lose money if that's what it takes--to give people the news they need?

Dancy: I do. But I was in a minority at the network.

Stasio: Maybe the news we need is out there. And now that we have the technological means to go and get it--which we didn't when there were only three networks--we should stop complaining and just go find it.

Dancy: I think that's true. I have long criticized the networks for not doing more documentaries. But a friend of mine at the network, a vice president, said, "Why should we? They're not profitable for us. PBS can do Frontline, and they can make a profit off it, and it's good television, it's niche television. But it's not something with widespread appeal that we want to put on the air." I disagree with that argument, but I can see his point.

Hamilton: I think it's a difficult argument to tell a profit-making entity you need to cut back on your profits. And it's even harder to do it through regulation. If you tried to regulate it again, I think people would be smart enough to figure out a way around it. But in my book, what I try to think about is, Are there things that would be compatible with people's incentives to change what gets produced? If foundations are concerned about what people know about particular topics, they could subsidize the provision of information--and you see Pew [Research Center for the People and the Press] doing that with their subsidizing of polling information--or they could subsidize training a journalist....

Stasio: But look at the BBC, which is funded by the government.... The BBC is being criticized for having apologized too quickly for a very good news story about a country that went to war without the proper information, and yet it's under pressure by its funder, the very government it's trying to cover.

Hamilton: It's funny, one of the Internet theorists is a Grateful Dead lyricist, and his famous saying is, "Information wants to be free." Unfortunately, nobody gets up in the morning and says, "I'm going to live on freedom today." They actually need some money. So if you think about information production, there always has to be some incentive behind it. It could be, I want to change the way you vote. That's the parties. Or it could be, I want to sell you to an advertiser. That's the market. Or it could be, I have a vision of the world that I'd like to further. And that's foundations. So there's always going to be some incentive behind someone who says, "I've got some information for you."

Stasio: Whose responsibility is it to demand the right kind of news, the media's or the public's?

Hamilton: When you use the word "responsibility," it goes down to the individual citizen level. But if you ask why [individuals] see the type of news that they do, it's in part a cost factor.... On the demand side, it is true that there are some things that people don't want to know about. During the war, for instance, the major consultants to local television news stations said, "Stay away from protest stories, because in our surveys people say that's not a story they'd be interested in watching."

Dancy: Walter Lippmann, the great political pundit, wrote as far back as the 1920s that the American public is like the audience for a play that arrives after the intermission, stays just long enough to find out who the villain is, and then leaves. So there's a responsibility on the part of the public as well.

Used with permission from WUNC.