Reflections on how The Social Dilemma applies to news sources relying on advertising revenue

The recent Netflix documentary, The Social Dilemma, was a top-10 feature around the world. Many people, including members of my family, came to the grim realization that though Facebook is a product they use, they are not the customer but rather the product itself. That’s because Facebook, like other free social media platforms, earns money by enabling advertisers to show highly targeted advertisements to users. 

But social media isn’t the only platform that relies on advertising for revenue. The news, where we turn to stay informed, is also guilty of leveraging advertising dollars. How can we get information in a world where our attention is being sold?

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In the News World, You Are the Product

The news business has historically relied more on advertising revenue rather than direct subscription revenue. Moreover, much of the news we get is from television, which sold advertising at the largest scale ever, long before Facebook existed. This has led to accusations of sensationalism as news outlets seek to capture the finite attention spans of readers and viewers, which they can in turn sell to advertisers. 

With most users now moving online, news has become even more opinionated as news sources compete to get traffic from Facebook and Google, two significant sources of audiences. Headlines are often crafted by social-media savvy editors, rather than journalists, which has amplified click-bait stories. As Slate journalist Will Oremeus says: “Where network TV appealed to the least common denominator, Facebook and other online platforms capitalize on people’s differences, nudging them along a path to extremism.” 

So not only are you, the reader, the product, but social media platforms are directly influencing the information you receive and affecting your belief systems. Philosopher Noam Chomsky famously summarized the relationship in his book Manufacturing Consent: The Political Economy of the Mass Media (1988): “In essence, the private media are major corporations selling a product (readers and audiences) to other businesses (advertisers).”

So if we’re the product in a news system reliant on advertising, is the solution to switch to sources that are based on subscriptions?

Paying for News Has Its Risks Too

The most successful example of a news outlet moving away from advertising revenue to subscription revenue is the New York Times. But even with the majority of its revenue coming from subscriptions, the New York Times continues to face credible accusations of bias. Why?

While a subscription news business may not be competing for attention with every story, they are still competing for an audience. In a world with thousands of potential news sources, building a subscription base requires having a clear position that helps you stand out in a crowded marketplace. And maintaining this position often requires regular feedback from customers to course-correct if necessary. This explains why the New York Times changed its headlines to please its customers.

Moreover, a world where all news is paid for risks keeping the news out of the reach of populations with lower income. That is certainly not the vision any journalist has when they write an article.

Is there a business model to get credible news to everyone?

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Keeping Credible News Within Reach of Everyone

If you put aside publicly-funded news, which has its own credibility risks, a private news source is more likely to offer credible news if it has multiple revenue streams, making it less likely to optimize solely for any specific source. Moreover, such a structure will likely reduce subscription prices, making it more affordable for the masses.

Even so, the only way for consumers to get credible news is to change their expectations of news sources and accept that every news source has potential for bias and no single news source is going to provide an unbiased account of the story. Readers have to get into the habit of reading multiple credible sources, an effort made easier by aggregators like The Factual. Ultimately, an informed citizenry is part of the news ecosystem and helps to keep news sources accountable so they deliver as close to the unbiased truth as possible.

Published by Arjun Moorthy

Arjun is co-founder and CEO of The Factual. Arjun has always been passionate about news from when he was a paperboy in middle school through becoming Editor-in-chief of The Stanford Reporter. Outside of work, Arjun spends much of his time with his family, dog, and praying for the Arsenal football team to have a winning season.