A Centrally Planned Media Economy

Fewer publishing houses dominate an increasing share of the media landscape. The results: Centralized news production and an unfortunate loss of journalistic diversity.

Dark times are upon us. Last week, the Guardian Media Group, owner of prominent newspapers like “The Guardian” and “The Observer,” announced the cutting of up to 100 editorial jobs (out of 650, or around 15%) through a voluntary retirement and severance scheme. In Germany, a recent study found that the number of staff journalists has also declined by 15% since 2000, from 15,300 to 13,000. International correspondents have been subject to cuts for a number of years, and many domestic publications that used to send their own reporters to global hubs now rely on the dispatches of the major wire services (whose reporters also complain that they must cover ever-increasing areas for an increasing range of media channels: print, online, radio, and video).

At the same time, big publishing houses have pushed aggressively to re-monopolize the media landscape. In Germany, 58.8% of all newspapers sold in the first quarter of 2012 came from just ten different publishing houses – a historical record! In the US, large investors buy up whole swaths of local publications. The most recent example is Warren Buffett, who announced in May that he was assuming ownership over 63 local papers. Small independent papers often face the choice between declining circulation (with the constant threat of bankruptcy) and a loss of their independence.

The consequences: Fewer journalists and publishing companies are responsible for a large percentage of the news and analyses that Joe and Jane Schmoe consume on a daily basis.

At this point, the narrative is usually upset by the introduction of “the internet,” the supposed savior of value pluralism and the great force for the decentralization, diversification, and democratization of knowledge. But the number of easily available journalistic sources and channels can easily obscure the fact that most people still receive their news through a rather limited number of websites and publications, who in turn are fighting against staff reductions and the simple regurgitation of wire service news. A study by the German media journalist Stefan Niggemeier found that the website of “Der Stern” – one of Germany’s big weeklies – published close to 400 pieces of content per day, of which merely 8 were original reporting. The vast majority of content is aggregated and recycled through different websites and portals.

In addition, despite the explosion of independent publishing on the web, much of our daily news consumption is clustered around a rather small number of websites. The four biggest German news websites are currently attracting 38.7 unique visitors per month. That is more than the next twelve websites combined, and does not even include popular portals like Yahoo or T-Online, which usually generate their news content from wire service tickers. In the US, the gap between successful journalistic websites and those who are losing influence as primary news sources is widening. Some papers, most notably the “New York Times,” have emerged as global news brands while their local and regional competitors stand to lose out or have to rethink their content and focus on hyper-local or thematically focused coverage. While news consumption through social media networks might break some of the dominance of browser-based media brands, the effects are far from certain and unlikely to dismantle existing media monopolies (it is telling that Facebook collaborated closely with a small number of big brand publications when it developed and announced its media apps last year).

At its core, our seemingly diverse media landscape resembled central planning rather than a marketplace of news and knowledge: Centralized content production, financial deficits, monopolistic promotion and distribution. One exception might be the tabloid herd behavior, which, as we all know, isn’t exactly one of capitalism’s most glorious attributes. In any case, a centrally planned media economy is doomed to fail. Its guiding principles are (figurative) five-year plans and economic calculations rather than quality and relevance.

And there’s another problem. Usually, when we speak of the so-called “filter bubble,” we are talking about algorithms: In Facebook newsfeeds or Amazon recommendations, we are presented with precisely the kind of information that appears most interesting to us, based on our reading patterns, social media networks, purchase history, and so on. The more close-meshed the filter, the lower the probability that we’ll be confronted with information that is genuinely new or surprising. One effect is that we tend to overestimate the pervasiveness of our own opinions, and underestimate the breadth of viewpoints and perspectives. Psychologists speak of “cognitive bias.” But the filter bubble isn’t a phenomenon that arose alongside the internet. For decades, journalism was dominated by old white men, who dutifully spread the world views of old white men on evening television. Millions of viewers could rest reassured that politics and science were men’s topics, or that the poor inhabitants of Africa would probably still roam the Savannah had it not been for the civilizational kickstarter package from the West. And few people were more surprised by the sudden fall of the Iron Curtain than the bureaucrats who devised the Soviet planned economy’s five-year plans, and who could feel quite secure and confident within their centralized bubble. The signs of looming collapse were either ignored or relegated to the unconscious. Yet in neither case did we speak of the obvious: a filter bubble.

Thus, it isn’t just a technological phenomenon that could be addressed through more intelligent algorithms or human curation. The filter bubble is a cultural and structural issue.

A cultural issue, because traditional journalistic gatekeepers continue to exert their influence over our media consumption habits. A digital elite might have moved on to hashtags and apps like news.me and toasted to the destruction of entrenched knowledge monopolies. But for most people, most of the time, this is not (yet) the case. When staff writers are let go and content is merely aggregated, we can see very real and tangible effects for the breadth and quality of the news and analysis that most of us are served on a daily basis. Unfortunately, as the influential German blog Carta remarked recently, “the loss in diversity is barely noticed by the public.”

And it’s a structural issue because aggregation is increasingly replacing original reporting. One example: Not long ago, the German paper “Hamburger Abendblatt” was a veritable journalistic entity. Recently, it has mainly created headlines when its publishing house Axel-Springer announced that it would try to exploit “synergy potentials” with other papers. The plan is to produce most content in a central newsroom and spread it across the whole product portfolio. The expected benefits: reduced costs, increased efficiency, and the chance to increase profits without increasing operational expenditures. Editorial changes are driven by the logic of economics.

The “Abendblatt” isn’t a special case. For years, many regional papers have simply copied their national and international news from wire service dispatches. The hourly radio news for most local stations are centrally produced – for example, in a small radio newsroom at DPA in Berlin – and beamed into the far corners of the country. Local newspapers have begun to share articles with their competitors to reduce the amount of original reporting that each paper must do locally. One story might now appear under three different headlines in three different local papers. This matters: It’s not surprising that many publications cannot afford an international network of correspondents (and never have been). But even many forms of reporting that traditionally happened in individual newsrooms are now becoming outsourced to central content production chains or aggregated from a network of collaborating publications.

Last week, Alexander Görlach wrote about the death of the cultural industry and argued that journalism has failed to develop the ability “to grow from within” and to convince readers of the value of its products. Words (a term which must suffice as a substitute for journalistic content in this case), he wrote, are increasingly powerless in a world that has become colonized by the logic of numbers.

Indeed, when we talk about journalistic innovation today (and I am writing this as someone who passionately believes in the future of online journalism and the benefits of technological innovation), we seldom mean content. Instead, innovation is driven by new modes of SEO optimization, the personalization of the news economy, better algorithms, and so on. “Relevance has become negligible as long as the clicks keep on coming,” Niggemeier writes.

But what’s the worth of even the best frontend presentation, when its goal is primarily to conceal the conspicuous absence of genuine content. And how must we qualify our praise for the digital promise of diversity and the democratization of knowledge, when it also acts as a driving force behind the re-monopolization of the media landscape and the centralized production and distribution of content? The filter bubble isn’t a new phenomenon, and it won’t miraculously go away if we build better technologies.

Update: Mathew Ingram has also written another excellent piece on citizen journalism.

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