When news anchors are pageant queens
Take a news network. The network is owned by a media conglomerate that is run by a board for shareholder profit. News released on the network can affect the shareholder value in that particular media conglomerate and also in other companies. Shareholders and members of the Board of Directors of said media conglomerate also own shares in other firms (and, perhaps, even controlling stakes in other firms) and have an interest in also maintaining high shareholder value in those firms.
Executives at the news network and of the larger umbrella media conglomerate are compensated, in part, in shares of the publicly-traded company that they work for, which incentivizes them to maintain the positive public standing of that company. This is a logical conclusion and in no way limited to media companies. Across a wide range of industries, employees are compensated in stock and stock options with the goal of incentivizing employees to align with the firm’s mission.
Now, we introduce additional parties known as advertisers. Advertisers and the companies they represent want to pitch to consumers. Advertisers pay the news network to play their commercials or run their ads online. Advertisers must think strategically because the news network could run a story unfavorable to the product or service that is being advertised. Likewise, the news network must think strategically because advertiser revenue depends on the network’s ability to provide the ideal target audience. What is the ideal target audience to an advertiser? The specifics may vary in terms of demographics, but any consumer must be open and ready to receive the information presented. In other words, the consumer of the news becomes the consumer of the advertiser. There is no distinction between watching the news and watching the advertisements as the two blend together, quite literally, back-to-back.
The blending of news and advertisement is even more dramatic when one considers the relationship between advertisers and the network. Some of the advertisers represent companies that are also publicly-traded. Shareholders of the media conglomerate may also hold stock or investments in the companies that are advertised on the network. Therefore, it is out of the monetary interest of the news network to speak favorably not just of itself but of the advertisers.
The monetary incentives are clear-cut: maximize profit by favorably reporting on the parent company and companies with a shared financial interest. It would be illogical and financially irresponsible to investigate or expose corruption in any of these organizations as the incentives are aligned to preserve shareholder value.
With this in mind, it is difficult to categorize the content that is published by the news network. News has a connotation of relevant information of the general public. What is in the interest of the general public? That is a tough question to tackle. In broad terms, the general public benefits from transparent governance and the protection of human rights. For the sake of argument, we could extend this statement to mean that corruption, greed, and unethical conduct are, at the very least, not in the best interest of the general public. Clearly, there will always be someone who could personally benefit from corruption and greed; however, in consideration of benefiting the majority, corruption and greed have no standing.
This presents us with a core problem: the incentives of the news network cannot align with interests of the general public. The public has an interest in unearthing corruption. By reporting on corruption, the news network either (1) acts financially against its own financial interest if the corruption contaminates or is perceived to contaminate it or any peripheral parties; or, (2) maintains the status quo as reporting on corruption does not increase profit in any significant way. (Note: consumers generally pay for the services of “news,” not for particular news stories.)
So, what is news? In this scenario, news is information that aligns with the financial incentives of the news network and presented to the audience of consumers susceptible to advertising. The consumer of news is useless of that same consumer is not open to advertising content. The most valuable consumers accept both the stories and the ads.