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.
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.
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.