Media Bias

"A free press, like a free life, sir, is always in danger."
--Ed Hutcheson (Deadline USA)

In thinking about the intellectual's role in social systems (more on that to come), I ran across an interesting article by Sutter (2001) on media bias. The author focuses on the alleged liberal bias in major television networks, major weekly magazines, and leading newspapers. His focus is on these 'mainstream media' outlets because, unlike portions of the media industry such as talk radio and some local newspapers sometimes alleged to possess a conservative bias, mainstream outlets are likely to exert more influence on political agendas, presumably due to their big audience.

He claims that various studies utilizing journalist surveys, content analysis, and case studies of content selection have not provided a conclusive picture of political bias in the mainstream media. He therefore employs a different approach. Essentially he performs a conceptual examation using industry analysis concepts. His basic research question involves how a liberal news cartel (which is what would need to be in place for persistent bias to persist) could possibly control output quality in a market environment with different buyer taste preferences and capitalistic owners.

An interesting question with some thoughtful findings. Keep in mind that Sutter's (2001) analysis was done before Fox (NWSA) and web-based sources really took off--which actually provides a nice post script to this paper.

He divides his analysis into 1) demand side-viewers, 2) supply side-owners, 3) supply side-journalists. On the demand side, the author observes that there is empirical research suggesting that consumers of news may have liberal bias themselves (e.g., Goff & Tollison, 1990), in which case producers can be seen as merely catering to their customers' needs. He suggests, however, that in order for this bias to be consistent across media outlets, consumer bias would have to be significant and narrowly distributed--otherwise opportunistic operators would break ranks from the cartel in search of profits by catering to 'less liberal' news consumers. He therefore dismisses the demand side as a primary driver of a persistent liberal media cartel.

On the ownership side of supply, the author observes that although many owners of media firms have famously held political views, many of those owners have possessed conservative biases. Therefore, although owners might conceivably sacrifice profits to further personal agendas, there is no conclusive evidence that such agendas would be pointed in the liberal direction. He also suggests that temptation to increase profits is likely to trump personal agendas over time, which would lead owners to produce more conservative content in order to financially survive/thrive, which should dilute bias over time.

On the journalist side of supply, the author cites numerous studies (e.g., Lachter et al., 1986) that have consistently shown liberal bias among journalist personnel. In the studies shared, the breakdown runs roughly 40-60% liberal to 20% conservative. The author expresses little doubt that such bias exists although the source of that bias is uncertain. Possible sources offered include: self-selection bias, where conservative dissenters face psychic costs for remaining quiet and social sanctions for speaking their minds (Kuran, 1995); the screening function of journalism schools in a generally liberal academia; and journalism's membership in the 'intellectual' class of occupations that tends to attract those who fancy socioeconomic change and are often hostile to free enterprise.

What concerns Sutter is not that journalistic bias exists, but whether such bias could play a meaningful role in supporting a persistent cartel of liberal media on the market. He is doubtful that liberal journalists could fill that role. If journalists let their biases color reporting too much, then viewers might defect. Moreover, profit seeking owners would penalize those employees producing output ill-fitted to the market; product would be repositioned to better fit consumer taste preferences. He does acknowledge potential for agency problems (Alchian & Demsetz, 1972) that make it difficult for owners to effectively monitor the behavior of journalistic agents, which thus increases potential for shirking among the agents. Journalists may therefore be able to indulge in their liberal views to some degree at the expense of the organization's profit.  He dismisses this control problem, however, as minor.

Finally, Sutter turns to the problem of maintaining a cartel under conditions of industry entry. Cartels tend to be less effective when the number of competitors increases. To the extent that outsiders can enter, then any opportunities for profit left on the table by a cartel would be captured as entrepreneurs fill the need. Although one could make the argument that entry has been historically difficult (FCC regs, limited number of outlets, etc), technological advances have lowered those barriers.

Taken together, all of these factors suggest to Sutter that persistent media bias is unlikely. If we fast forward to today, his conclusions seem pretty well supported. The massive rise of Fox appears to demonstrate pent up demand for content with a conservative bias. The big shift in market share does suggest to me that there has indeed been some persistent liberal bias in play--perhaps due to past entry barriers and and shirking by journalistic agents. But that's all changing due to entrepreneurial entry. Any bias that has been present is on the decline.

What currently amazes me is that few other providers have followed Fox into this space. Fox is flourishing while the market for left leaning content is so crowded that operators are competing themselves out of business. This is bound to change over time (i.e., more competition in Fox's segment) but right now this situation reflects an interesting dynamic.

The internet, of course, has become the other great equalizer, chasing folks from traditional venues toward fragmented media segments online. This movement is also sucking life out of traditional operators that have been slow to adapt. This general phenomenon, where incumbents face extinction by innovative entrants, is observable in any industry facing disruptive competitive change.

The general lesson seems a familar one: the more competitive the market, the less likely biases will persist that do no align with customer preferences.

Bias can only persist if enabled by intervention that prohibits supply to pursue demand.

no positions

References

Alchian, A.A. & Demsetz, H. 1972. Production, information costs, and economic organization. American Economic Review, 62: 777-795.

Goff, B. & Tollison, R.D. 1990. Why is the media so liberal? Journal of Public Finance and Public Choice, 1: 13-21.

Kuran, T. 1995. Private truths, public lies. Cambrige, MA: Harvard University Press.

Lachter, S.R., Rothman, S., & Lachter, L.S. 1986. The media elite. Bethesda, MD: Adler and Adler.

Sutter, D. 2001. Can the media be so liberal? The economics of media bias. Cato Journal, 20(3): 431-451.