Value of information depends on the principles of business and technology models
Jun 3, 2014
The future of journalism and the value of information in an evolving media landscape driven by economic factors and fragmented audiences.
Who cares about information? The question seems rather harmless, but it is at the basis of how the news market will structure itself in the future. Ultimately, all arguments that treat journalism as a social good, a valuable resource for the functioning of society, are fragile. The definition of the future of the media will be determined - like everything else - by economic premises. What society needs to do is find a way to fit its information demands into these premises. Otherwise, it will end up with inflated and empty discourses like those made by academics who live in a world that does not exist.
Journalism as we know it today was subsidized throughout the 20th century. Once their commercial departments were able to generate fortunes by selling advertising spaces, information groups could afford to, when they wanted, bankroll capable, expensive, and well-known journalists for coverages that were deficit in themselves. For example, in a distant war like that of Vietnam, the late Realidade magazine could send a special correspondent like the journalist José Hamilton Ribeiro because the revenues generated with the rest of the magazine would be more than enough. There were not enough Brazilian readers interested in Vietnam to pay for Ribeiro's trip to Asia, but the whole publication could subsidize ventures of this type.
The fall in advertising sales was subsequent to the downsizing that newsrooms made in the 80s and 90s. However, it was with the arrival of digital media that traditional media were tripped up because advertising began to change hands. When revenues began to dwindle, newspapers and magazines did the only thing they know to cut costs - layoffs in newsrooms and from then on, the pace at which readers abandoned their printed habits only increased their pace.
With very rare exceptions, newspapers have lost the possibility of being independent because on one side they have advertisers and their interests and on the other, readers and their preferences. Readers choose newspapers because of these preferences and if it decides to 'pasteurize' to seek readers of other creeds, it tends to lose attractiveness. Serving very large slices of markets requires truths to be delivered in a more palatable way, as Professor Tyler Cowen, of George Mason University, says, but these "docile" truths do not captivate audiences. In a world saturated with content offerings, only the most aggressive survive. BBC, New York Times and The Economist magazine are among the very few that can afford to escape this observation because they are brands that transcend the reader/user's preference.
Looking from an economic point of view, there are some decisive questions to determine the viability of the news market. How many people are willing to pay for certain information - say, about the impasse between Russia and Ukraine in Crimea? If not, how many advertisers are willing to pay for the attention of these interested parties? Should we leave the decision on what are the important subjects to economic criteria?
Rationally speaking, no, of course, we cannot subject the agenda to the preferences of a public that dedicates hours of its life to Big Brother Brazil or learns to dance the Lepo-Lepo. Economic criteria do not lead to the most appropriate conclusions for society, however valuable the theories of Adam Smith and other liberal thinkers may be.
It is at this point that society's creative capacity needs to make a difference. If news can no longer be produced within a business model, insisting on this model should not lead to any different outcome. Thus, alternatives that have lower costs or generate higher revenues (or a combination of both, which is most likely).
One path already explored is the de-homogenization of the audience. Homogeneous audiences tend to create greater competitiveness and facilitate the life of large corporations (as was the case for decades in the supremacy of mass media). This process flattens prices for the end consumer (which virtually ends up tending to zero, as happens in cases where dumping occurs), but also compromises the accuracy and quality of information, because it makes fewer resources available for investigation and commercially, it is usually more susceptible to good neighborliness policies with large advertisers. In response to this, some media seek the extremes (think of Veja magazine, the British Daily Mail or Carta Capital magazine). Better to serve a partial audience than to try to fight for the whole. In short: publications deliver what their stakeholders (advertisers and audience) want to receive to avoid the risk of losing revenues and/or readers. To avoid the risk of being sold out, publications stem their audience losses by speaking to more "radical" audiences who become addicted to the truths they have constructed.
The audience has already started to become more heterogeneous from the moment that the media that reached massive audiences began to fragment. Today, technology companies like Twitter, Facebook, and Google have absorbed a large part of this fragmentation, and blogs and other publications have also become very visited. The knot to be untied there is in the way revenue reflects this multifaceted audience. The bulk of the advertising market still lies in the hands of agencies and they remain relentless gatekeepers, along with technology corporations that hold mass inventory delivery systems like AdSense. We live today in a moment in which the market cannot adequately remunerate the production of content according to its importance, because this importance is not perceived by the audience. This failure of the matrix opens space for scam journalism, to "infotainment", to "artists and models" with a lot of silicone and little clothing, and to shallow coverage of fundamental subjects such as international politics, education, and policy, for example.
The spectacularly fast pace of technological changes needs to come to the rescue of this societal need. If it is not possible to maintain journalistic organizations as they are now, cooperation alternatives can be part of the solution. Mechanisms that help attribute credibility to the news that is read are also being developed (like the Truth Goggles). Systems that help the reader identify reliable information providers also have to be created so that many small vehicles can occupy the space of the big ones in decline.
All this, however, must be endorsed by society's will to be well informed. This disposition on the part of society can even be autonomous, active, determined by a matter of principle, but given the obsession with frivolities and dog-eat-dog world on the part of the public, it is lawful to suppose that only after a great trauma will we demand more information and less entertainment. Until then, we will continue to honor populist scammers and superficialities with little clothing.
The value of information depends on the principles of business and technology models.