Kilroy Was Here
July 20, 2003
The Media Does Not Give Us What We Want
In reading the comments from Howard Dean's guest posts on Lawrence Lessig's Cyberlaw weblog, the proponents of complete de-regulation of the media often gave arguments that ran along the following lines:
Corporations are interested in making money, not thought control. The best way to make money is to give the people what they want. Why should government stand in the way of that?
This "blame the victim" style of argument hides a significant fallacy and shows a significant misunderstanding of market theory.
Profit-driven corporations are not out to give people what they want; corporations are out to give people what they will take for the least amount of cost. For example, in the software world, people want fast, user-friendly, bug-free software for free; no software company will last long giving them what they want.
Big corporate media is driven by a similar motive. Here's a quick example.
SomeCableNetwork (SCN) broadcasts Investigative Reporting and gets a 3 share. From this, their ad revenues are $25 million per show.
OtherCableNetwork (OCN) broadcasts Man Eats Worms and gets a 1.1 share. From this, their ad revenues are $10 million dollars.
So, from first observation, you think shows like Investigative Reporting would begin to dominate the media.
However, that analysis ignores the other important feature of profit — cost.
If Man Eats Worms only costs $1 million to produce each show, then the profit on Man Eats Worms is $9 million a week.
If Investigative Reporting costs $20 million to produce each show, then Investigative Reporting only nets $5 million a week.
So, before you know it, SCN has cancelled Investigative Reporting and put in Man Eats Cockroaches.
And this line of argument fails to take into account other motivations for big corporate media. (For example, supporting the political party that will most likely allow greater concentration of the media.)
So, the next time someone dismisses your criticism of our conservative new media using the "media is just giving us what we want", tell them that for a market-loving conservative they sure have a limited understanding of markets.