Information Is Free Only Because Advertisers Pay
For much of the 19th century, newspapers were financed by political parties. It was a transparent, transactional relationship: The newspaper would officially partner with a political party, and in return they received direct infusions of cash, customers and even news.
The cash would come from the party’s budget, the customers from the party’s base and the news from the party’s politicians. In return, the party had total control over what the newspaper did and didn’t publish.
Yet by the end of the 20th century, there were hardly any party-affiliated newspapers left. Many people assume that this was a triumph of journalistic ethics over partisan politics. But in a paper published in the November 2011 edition of the American Political Science Review, Maria Petrova suggests that the real story is less inspiring.
“Newspapers’ independence was positively related to the local profitability of advertising,” she writes. “In the areas with faster-growing advertising markets, newspapers were more likely to be independent. The effect of advertising worked both through the entry of new newspapers and through changes in the affiliation of existing newspapers.”
In other words, the news found a more lucrative patron than political parties: advertisers. This business model, though, required a different news model. “If the profitability of advertising is high, then it is costly for media outlets to distort their news coverage in the direction desired by a subsidizing group,” Petrova writes. “Any deviation from the coverage that maximizes audience means the loss of audience and the loss of corresponding advertising revenues.”