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Start The Media: an Intrinsically Perverse Market
16 September 2013

The Media: an Intrinsically Perverse Market

Estimated reading time Time 6 to read

If car makers, instead of selling them to the users, gave them away because oil companies and garages paid them for each car given away —or sold way below its cost— so there would be many drivers buying gas and paying for repairs, would cars be as we know them today?  Obviously not. Because the user is not the customer of the car makers, but rather an instrument to sell to those who produce gas and repair vehicles, cars would not be fuel-efficient and would be visiting the garage quite often. They would have to work reasonably well from the practical and economic point of view, since otherwise people would not use them. But car makers would not maximize their profit by producing the most cost-efficient cars, but rather by manufacturing vehicles that —within reason— guzzled as much gas and broke down as often as possible.

In a market like this, it would be to the advantage of car makers, oil companies and garages if competition among the first ones to attract users centered on aspects with little or no relationship to gas consumption and mechanical reliability, such as esthetics, comfort or safety. But above all, it would be very convenient for them if users were convinced that it is normal and unavoidable for cars to consume lots of gas and break down frequently.

It seems impossible that such a crazy, not to say perverse, market could exist in reality, since it distorts the logical responsibilities of exchange and conceals the interests at stake, but the fact is that it does indeed exist: the media market. With a few exceptions, radio and television are free, the Internet is usually also free of charge, while newspapers are free or sold at a price that does not usually exceed 35% of the total cost[1]. So… how does the news media market work? Well, very much like the crazy and perverse automobile market we have seen earlier, if it existed.

If we, the recipients, pay nothing, or amounts that usually do not even cover half the cost, and the media are owned by profit-making companies, the conclusion seems obvious: the recipients of the messages conveyed by the media cannot be the customers of those media. They no doubt play a fundamental role, but not the role of a customer, contrary to what is frequently said or suggested. Three questions arise: who are the customers?, what role do the recipients play? and what do the companies that own the media really sell to their customers (the real ones)?

Essentially, the media have two customers. On the one hand, the advertisers, in which case there is usually a direct economic relationship, publicly known and transparent; on the other hand, the political, economic and social powers interested in being supported —or at least not attacked— by the media, in which case the economic relationship is indirect, hidden from the public and dubious as regards its characteristics, which are seldom ethical and can even be illegal. The advertisers buy space or time in the media to include their advertising messages; the powers that be buy editorial line, which involves changes in the information and opinion given by the medium to its audience. Quite often the sale of editorial line is paid using the first system. In other words, the advertising campaigns bought by powerful institutional or corporate advertisers involve not only the transparent, legitimate and ethical purchase of an advertising space in which the message is inserted so the audience can identify it as such, but also a series of media manipulations in favor of the advertiser. These manipulations can range from a certain sensitivity in how the information is treated to its omission, or even downright lies. All will depend on the ethics of the advertiser and the medium, on the economic and political power of the entity which is interested in influencing, on the economic situation of the medium, on the attitude of its journalists and on the capacity for criticism of its audience. Other usual ways of buying editorial line include subsidies, sponsorships and hard-to-detect side businesses, with no direct relationship to the medium, but directly related to its owners.

The second question was: what role do the recipients play? If those who financially support the media are the advertisers and the entities and people who want to influence public opinion, it is obvious that the attention and time of the recipients, as well as the capacity to influence them, are the real products sold by the media.

We thus come to a conclusion that at first sight seems astonishing: as a recipient, you are far from being a customer of the media (newspaper, the Internet, radio, TV…) through which you keep informed: YOU are their product. YOU are what the media sell to their customers! This reality, which can be confirmed through a structural analysis, is seldom made public. In other words: as a recipient, you are one more sheep in the flock and not the one who benefits from the wool. Being a sheep, however, does not entail a permanent and systematic mistreatment. Many sheep are probably convinced that the shepherd is working for them, as he looks after them, protects them from attacks, makes sure they are fed and do not fall ill… But the shepherd’s ultimate aim is not the well-being of his sheep —they are not his customers—; they are a means to making a profit, and if he looks after them, it is precisely to make such a profit. In fact, when time comes, he shears them or takes them to the slaughterhouse…

Therefore, the sheep —and the recipients of the media— will not receive systematically deplorable services, since the shepherd is interested in having many healthy sheep —and the media are interested in being read, listened to or viewed by as many people as possible. But since neither the sheep nor the audiences are the customers, shepherds and media editors will optimize their profit by getting the most out of them while providing the absolute minimum necessary. This is why the media provide an essential amount (and quality) of information and contents they think we are interested in, and sufficient to get our time and attention, but accompanied by contents and information that the real customers of the medium want us to receive, and pay for it. Of course, the latter are not necessarily those we are interested in and do not receive the proper treatment for us to be well informed. This is the cause of the apparent mystery of why media contents are only marginally related to the interests of their recipients according to surveys.

But the perversion does not lie in trying to provide as little as possible in exchange for as much as possible —something quite common in many transactions—, but in the misleading corruption of the seller-customer relationship. The problem does not exist if the sheep are aware of the shepherd’s interests and freely decide to become members of the flock (something that may be understandable in sheep intended to produce wool, but highly doubtful if they are raised for meat…).

This situation inevitably perverts the relationship between the media and their audience. The recipients —quite naively— believe that they are customers despite paying nothing, or very little, and expect to be served as such. The media keep the recipients unaware, emphasizing their importance —which is true, since they are the product they sell— but never mentioning that catering to their interests as best as possible is not their main and direct aim, but rather one of costs. It is undeniable that the ethics and responsibility of the journalists (of course, not all of them) and of the media owners (again, not all of them) cushion the problem. But this is a structural problem and except in those infrequent cases where the recipients pay the medium directly for the information they receive and are its only —or at least fundamental— source of income, in the medium term the audiences will tend to feel disappointed.

In an information and communication system like this, it is no wonder that mistrust towards the media is growing, the prestige of the journalists plummets and publishing companies are in crisis. By breaking the monopoly of the three conventional channels (press, radio and television) and, with the help of the Internet, new public information and communication alternatives emerge.

But the problem is not limited to the conventional channels and will remain on any medium, including the Internet, as long as the information is provided free of charge. Only if the recipients pay for the information they receive, will they be assured that they are the customers of the medium and, consequently, be treated as such.

Santiago Graiño Knobel 

Co-director of the Master’s Degree in Journalism and Communication of Science, Technology and Environment at Carlos III University in Madrid (Spain)


[1] Calculating a newspaper’s costs is not a simple matter. Knowing the direct variable costs is important for understanding the other costs. The most important direct variable costs are pre-press (layout, proofreading, images…), printing, paper and distribution. This usually accounts for 40% of the retail price. Then there is the fee for the point-of-sale (newspaper seller), which ranges from 12.5% to 15.0%, and the cost of the unsold copies (the so-called return). The impact of this factor depends on the type of newspaper (general, economic or sports information). In today’s crisis, gross income ranges from 15% to 20%, but editorial staff (journalists, photographers, etc.)and management and administrative structure costs also need to be added. These costs vary greatly from one newspaper to another, but it is very unlikely for the money from sales, after deducting all the costs, to exceed 35% of what it costs for the newspaper to reach the readers.

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