Three ways to liven up the news in the US

Like any market, news media is subject to supply and demand. News comes in many formats: radio, television, print, newsletter, online, etc. News is available from local, national and international publications. There have also been significant business model innovations in news, whether ad-supported, subscription-based, community-supported, not-for-profit, and so on. Here are some recent ideas from media scholars to liven up news in the US.

Demand: Be a better consumer of news

Leading Internet policy expert and author Bill Dutton notes that the press and media, known as the Fourth Estate, have been an important development in world history to control the power of state and leaders. His forthcoming book describes how the Internet, the fifth power, offers unprecedented opportunities for individuals to be independent of the media and to be self-sufficient in information. “My suggestion is to read or view the news critically, but not solely rely on news sources; always consider obtaining your own information as best you can; and be skeptical of any source, including yourself, as we are all occasionally fooled by our desire to confirm what we already believe to be true,” he writes.

Dutton suggests developing a genuine interest in politics and looking for at least four sources of information, both online and offline, such as speeches, government actions, court cases, press releases, word of mouth, witness testimony, radio, email, books, newsletters, etc “The Internet gives access to more sources of information than is possible, so we have to be more critical of ourselves,” he says.

Offer: Promote policies that encourage financial investment in news

Ironically, regulatory policies designed to control market power in news outlets can have the opposite effect of preventing market entry in the connected age. There are basically no barriers to starting a news outlet online, but newspapers have died by the thousands, in part because they have been unable to monetize internet business models. The Federal Communications Commission (FCC) wields significant power by enforcing the transfer of broadcasting licenses and the enforcement of legacy pre-Internet ownership policies. These guidelines should be updated to reflect the reality that capital will find its best and most productive use by innovators, not regulators. In particular, the FCC specifically regulates the transmission of broadcast frequencies against “message distortion” (that is, intentional distortion, not inaccuracy or expression of opinion), but this is constrained by the First Amendment’s protections of press freedom. As such, the FCC has important ex post power to regulate post-merger companies.

News companies looking to merge to improve their investment scenarios must also seek approval from the Department of Justice. A common tactic used by competition authorities to deter or discourage mergers is to simply state that mergers will raise prices by providing a simplified view of the projected post-merger sticker price. Academic work by Howell and Potgieter performs quantitative analysis to demonstrate how and why end users consume content in bundles, the many possible outcomes of merger pricing, and that sticker pricing is meaningless when the user is getting greater overall value. In addition, higher prices may be justified given investments and higher quality news networks.

Investors in particular are signaling that they value diversity in news work. Led by Soo Kim, a longtime Korean-American investor with a proven track record in the broadcast and local news industries, Standard General’s upcoming acquisition of Tegna could create the country’s largest minority-owned, women-owned broadcaster. Perhaps the desired social outcomes can be achieved by the market rather than regulators. Dutton notes, “Ownership regulation is less critical when there is news competition in the media.”

How information and technology can improve truthful news markets

Users are increasingly getting their news from Internet platforms such as Google, YouTube, Twitter and Facebook. These platforms use a variety of human and artificial intelligence content moderation techniques to identify, flag, and delete inauthentic, illegal, obscene, and otherwise harmful information. Internet operators employ filters to block spam and block malicious data that could harm users or systems. Platforms like Twitter and LinkedIn authenticate users to ensure they are real people or organizations. Review websites use controls to minimize review and ranking abuse. These practices are hardly perfect, and some find them controversial, but without some controls, the Internet would be unusable for news.

A lecture for the 50thth Marshall W. Van Alstyne’s annual Telecom Policy Research Conference “Free Speech, Platforms, and the Fake News Problem” proposes a guarantee of authenticity. Citing economics Nobel laureate Ronald Coase, who researched externality markets and information, Van Alstyne proposes creating an advertising market for truth. For example, a politician makes a claim about an opponent. The opponent contests the claim by issuing a time-limited arrest warrant, which is independently fact-checked by users. The opponent pays a small fee to decide on the fact-checking, which is performed by a random sample of colleagues. If the opponent is right, the fee is refunded and thus bears the claimant. Therefore, the cost of telling the truth is free while only the liars pay.

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