Entertainment vs. Information

In the last entry, I pro­posed a def­i­n­i­tion of media that would take us away from the mode of deliv­ery and towards a 3-axis analy­sis of media mod­els: entertainment/information, purchased/subsidized, and consumer/professional gen­er­ated. In this entry, I am delv­ing on the first of those dimensions.

How it started

When I first started clas­si­fy­ing media as enter­tain­ment vs. infor­ma­tion, I was look­ing for a basic answer as to how to resolve the con­tra­dic­tion of hav­ing orga­ni­za­tions like CNN, MSNBC, and FoxNews, clas­si­fied in the same cat­e­gory as Bloomberg News, the Wall Street Jour­nal, or the Finan­cial Times. Each seemed to appeal to a cer­tain audi­ence and each of the audi­ences seem to be very dis­tinct and thus inter­ested in very dif­fer­ent things.

For exam­ple, the sex­ual behav­ior of many politi­cians may serve as great meat for the 24-hour-newscycle of cable TV chan­nels but finan­cial news­pa­pers would pay scant atten­tion to them. On the other hand, in-depth analy­sis of the deci­sion mak­ing process around changes of 5 basis point in an inter­est rate might gar­ner an audi­ence in the finan­cial world but may only merit a 15 sec­ond men­tion on some cable news chan­nels. That dis­con­nect seemed to only get sharper over the last year, as the world econ­omy teetered on the brink of total finan­cial col­lapse but most of the TV chan­nels seemed more inter­ested in attack­ing or prais­ing a par­tic­u­lar polit­i­cal point of view.

Why this axis?

Answer­ing a ques­tion about where on the enter­tain­ment vs. infor­ma­tion axis a par­tic­u­lar media orga­ni­za­tion can fall gives us insights into some of their poten­tial busi­ness strategy.

The pro­duc­tion or dis­cov­ery of facts or infor­ma­tion is gen­er­ally a more time-consuming and/or costly pro­duc­tion than the pro­duc­tion of opin­ion or enter­tain­ment. For a sim­ple mea­sure, think of the cost of a reporter doing an inves­ti­gate piece either in a war the­ater or about a finan­cial insti­tu­tion; Hav­ing thought of that reporter, now think of a dif­fer­ent reporter inter­view­ing a TV or movie star who is pro­mot­ing the lat­est vehi­cle he/she is in. Because the moti­va­tions are dif­fer­ent and the amount of work to feed those moti­va­tions is dif­fer­ent, the busi­ness model needs to be different.

Enter­tain­ment

As I men­tioned ear­lier, I con­sider orga­ni­za­tions like Fox News, MSNBC, and CNN to be more deeply ingrained in the enter­tain­ment side of the house.

This, by the way, is no acci­dent: Rupert Mur­doch is a savvy media man first and a politi­cian sec­ond. He was the first in his indus­try to real­ize that it would be cheaper to put opin­ion on the air and focused on deliv­er­ing such opin­ions to what was then an under-served cus­tomer  niche: peo­ple who are of more con­ser­v­a­tive lean­ings. This is why Fox News can exist under the same roof as the def­i­nitely racier and more left of cen­ter fares deliv­ered on the Fox TV net­work. The net­work appeals to a dif­fer­ent audi­ence but, by serv­ing both, a near-full cov­er­age is achieved in terms of adver­tis­ing reach.

The recent suc­cess of MSNBC in repro­duc­ing the FoxNews model but for the more lib­eral audi­ence seems to val­i­date the model: Keith Olber­mann is the Bill O’Reilly of the left.

But one must real­ize that the value of enter­tain­ment as a busi­ness model is dri­ven by the idea of max­i­mum return on invest­ment: the pro­duc­tion costs are cheap, the con­sumers are aplenty and while they may not be will­ing to pay, some­one is gen­er­ally ready to sub­si­dize the lower costs in exchange for access to that audi­ence. For exam­ple, book pub­lisher love giv­ing their authors away for free inter­views if they can get them because it helps pro­mote their books; movie and TV pro­duc­ers push their stars to give inter­views for free too so the movies and TV shows they are in get an audi­ence (a form of vir­tu­ous cir­cle of enter­tain­ment); and polit­i­cal par­ties or orga­ni­za­tions push­ing a par­tic­u­lar polit­i­cal agenda are happy to deliver “research” and “experts” that can be used to pro­duce news-like segment.

Because most media orga­ni­za­tions in the United States are profit-driven cor­po­ra­tions, the appeal of those lower pro­duc­tion cost is hard to resist.

The chal­lenge to that seg­ment of the axis is that enter­tain­ment is based on the avail­able mind share one can cap­ture. Every time an audi­ence mem­ber is moved from one TV chan­nel to another, or from an inter­net site to another, the place where he/she was loses some value. And, in recent year, the mind share and atten­tion share tra­di­tional media used to get has been dimin­ish­ing because new form of enter­tain­ment have arisen. The sheer vol­ume of videos posted on YouTube alone means that, even if 99% of them are awful, 1% will find an audi­ence and drive it away for what­ever period of time the end con­sumer is engaged with that one percent.

So the mar­gins on enter­tain­ment media are bound to become a lit­tle tighter in the future which will push that end of the media spec­trum to move fur­ther and fur­ther into the sen­sa­tional and traffic-generating space. This, in turn, could mean more of a focus on for­mu­laic type of con­tent that is known to appeal to a broad seg­ment and hoped to appeal to a wider one.

Infor­ma­tion

But infor­ma­tion dri­ven media is dif­fer­ent. Infor­ma­tion tends to be some­thing that is action­able and there­fore some­thing that is more valu­able. When peo­ple speak of infor­ma­tion media, they gen­er­ally focus on the business-focused con­tent cat­e­gory. But why do so?

A lot of infor­ma­tion is usable to some­one. For exam­ple, I am sure that politi­cians enjoy sentiment-related infor­ma­tion (poll num­bers, data on how the pop­u­la­tion feels about an issue); gam­blers find use for sports-related infor­ma­tion; med­ical pro­fes­sion­als and other sci­en­tists keep up with research in their field to come up with more break­throughs; com­pa­nies, of course, need industry-specific infor­ma­tion to bet­ter posi­tion themselves.

But pro­fes­sion­ally cre­ated and vet­ted infor­ma­tion is expen­sive to pro­duce. In the past, such infor­ma­tion was pro­duced and vet­ted by a cadre of pro­fes­sion­als with deep knowl­edge and some level of recog­ni­tion within the arena they would cover. On the more extreme end, the pro­duc­ers were the sub­ject of the news them­selves (for exam­ple, most of the sci­en­tific jour­nals are writ­ten by the sci­en­tists who have done the research in the first place).

And the other inter­est­ing thing about infor­ma­tion is that it can have some stickiness.

But the tricky part is that most infor­ma­tion is of no inter­est to most peo­ple. And some infor­ma­tion may be of value in terms of pub­lic good but not nec­es­sar­ily of action­able value for most peo­ple. That, unfor­tu­nately, is the case for most of what is pre­sented as “news” in news­pa­pers. Town coun­cils, offi­cials cor­rup­tion, issues sur­round­ing pol­icy mak­ing are things that need to be cov­ered in order to cre­ate a proper func­tion­ing democ­racy but have lit­tle value out­side of hav­ing a prop­erly func­tion­ing democ­racy. And few peo­ple are will­ing to pay to keep democ­racy working.

Enter two new phe­nom­e­nons: the wis­dom of crowds, and the self-correction of per­sonal inter­est. Let’s assume for a moment that crowds can actu­ally be led one way or another. But, as we all know, for every action, there is an equiv­a­lent reac­tion. So we could extend on the idea that any sys­tem is bound to even­tu­ally become self-adjusting when all inter­ests start fight­ing for its own share of what­ever is at stake. On most pol­icy issue, there will be two sides, with each side argu­ing pas­sion­ately that its posi­tion is the cor­rect one.

So one could assume that the self-interest of indi­vid­ual sides could lead to the rise of advo­cacy media or at least politically-aligned media. In such a model, “infor­ma­tion” may be gath­ered and pre­sented by self-interested par­ties. The con­sumer is then left to eval­u­ate the pieces of infor­ma­tion aimed at him/her and see if it con­firms his/her own biases or is or isn’t more fac­tual. This, by the way, is a model that exists in a lot of democ­ra­cies around the world (France, where I orig­i­nally lived, still has news­pa­pers that are clearly aligned with polit­i­cal par­ties) and I would argue that the penny press was prob­a­bly more akin to this model than what we know today as newspapers.

This brings another qual­i­fier on the infor­ma­tion slide, which would allow us to ana­lyze the level of bias in a piece of infor­ma­tion. Some may argue that doing so would be aban­don­ing the con­cept of objec­tive report­ing but I would argue that such con­cept has been largely a chimera: when­ever a reporter chooses one quote over another, or frames a ques­tions in a par­tic­u­lar way, he/she imbues the report­ing with some form of bias.

What’s the take-away?

Enter­tain­ment and Infor­ma­tion are impor­tant dividers in assess­ing media prop­erty. Under­stand­ing that divide can help us bet­ter under the poten­tial risks or reward asso­ci­ated with such. Enter­tain­ment media is cheap to pro­duce but does not nec­es­sar­ily cre­ate real value; Infor­ma­tion media (which may have dif­fer­en­tial level of biases) is not only valu­able in both short and poten­tially longer run but could be depen­dent on a self-interest effect.

In the next entry, I will exam­ine how the media is paid for and what that may mean for some seg­ments of the industry.

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