Media Outcomes Fund: Making media serve our democracies in the digital age
We need new financial incentives to encourage media platforms to write stories that help people make informed decisions.
Media isn’t just entertainment, it’s a pillar of democracy. It serves a role as essential to democracy as the legislature and judiciary, by educating the public and enabling it to form an opinion on matters that affect it.
But as media revenues have become increasingly decoupled from the quality and accuracy of the content they produce, we need to establish a mechanism to measure how people get informed and reward the channels that cultivate better-informed and critical thinking citizens. Media Outcomes Fund is a proposal for public intervention to align media’s interests with those of society.
Media is increasingly concerned with “what gets attention” over “what’s important” thanks to its dominant ad-driven business model. Its main concern is to get more reads and shares, not to educate. In a world where “fake news” are getting more shares than “real news”, this is problematic. We rely on media to educate ourselves, and back in the day, media used to be run by public organizations. Now, under the pressure of busy schedules and an ever increasing amount of content that demands our attention, we have little time for following up what is happening in the public sphere.
To quote Medium’s CEO Ev Williams: “it’s clear that the broken system is ad-driven media on the internet. It simply doesn’t serve people. In fact, it’s not designed to. The vast majority of articles, videos, and other “content” we all consume on a daily basis is paid for — directly or indirectly — by corporations who are funding it in order to advance their goals. And it is measured, amplified, and rewarded based on its ability to do that. Period. As a result, we get…well, what we get. And it’s getting worse.”
An informed citizen is a public good. She will provide not only better feedback to decision-makers in terms of votes, but also will inform others around her to do the same. Just like primary education, lifelong learning of political and economic considerations that govern our everyday life in a republic is essential. Imagine if we funded our school system through ads: student books would be provided by advertisers; relevant content shortened in each version to make more space for advertisement. It doesn’t seem right. Yet this is primarily how we fund our media, an institution used to educate the public and serve as the fourth estate. We must find new ways to fund our lifelong public education that don’t compromise its integrity and quality.
In order to make a meaningful intervention, let us take a look at how the media economy works: There are publishers and distributors, who earn money via advertising or by subscriptions. Publishers could distribute directly, as is the case when one visits website a news outlet such as The Guardian. In contrast, Facebook acts as a distributor when one clicks on a link to an article of The Guardian that Facebook decides to show you on your newsfeed. While the content of an article is important for its audience to keep reading, the distributors’ role is equally critical to ensure that the article is visible where people tend to gather. Publishers have some revenue from subscribers, however, their primary source of income is ad revenue.
Therefore, what seems like free is not free, we all pay by providing advertisers with opportunity to target us. However, more importantly, we pay by not being shown most interesting or important stories seen from public perspective, and only the most interesting stories from an individual perspective. Education and public decisions, however, require us to take the interest of public alongside the individual.
The results are catastrophic. The United States, home to largest concentration of top tier research universities on everything from childcare, education, and healthcare is unable to turn this research into policies and legislation that would help its citizens. The public has not been fed relevant information and arguments for so long, that they unknowingly vote against their best interests. Often an important policy subject is dismissed by citizens as “it’s politician’s job”. Other times, extreme ideas can flourish where citizens seem to have little to no clue on implications of policies they advocate. Respect for the sciences has been undermined, while opinion, speculation and “alternative truths” are defended in the name of free speech. The system to educate citizens on public affairs is simply not working.
The “Media Outcomes Fund”
If we accept that society has a lot to gain from educating its citizens properly on current public issues, then we can agree that informing citizens is a public good that the public should incentivise.
We can do so by rewarding the media organizations that do a good job of keeping citizens informed, and levying additional taxes on those that do not. This could easily be determined, by asking citizens to take short surveys about the media they are consuming, and comparing it against how informed they are in a range of areas.
We already measure which media people consume. This information used to establish the pricing of various media channels, as well as allow marketers to better target their audiences. We also have the technology to track who consumes which media, down to the level of which articles have been read, or videos watched. Spotify, as an example, distributes its subscriber and ad revenues across thousands of artists and stakeholders and thereby has set a precedent on such a practice.
Imagine a public fund — let’s call it the “Media Outcomes Fund” — that is financed by taxes on all advertising. That fund in return would be spent to support publishers and distributors that do a good job of informing the public. The quality of public information would be measured at an individual level via surveys that measure the citizen’s knowledge on contemporary issues.
A democratically appointed media board — with an appointment process comparable to the supreme court to secure its independency — would decide what the relevant contemporary issues are. By using surveys and big data analytics tools, government could assess which media channels have attributed to the public awareness. The fund would allocate the funds to publishers in a fashion similar to Spotify funding artists.
The fund doesn’t need to be overwhelming in its size to have great effect. The American media ad revenue is around $25bn in total, and Facebook’s 2016 revenue is around $6bn. A total budget of $10bn, which could be partially or fully financed by levying taxes on ads, could be a good start to improve the content we see. Even if we funded this amount from public budgets, we seem to have room for it: the amount needed is only about one-fifth of the annual increase in defense budget ($47bn) that Trump just proposed for the next 10 years.
Circulating potentially billions of dollars, the Media Outcomes Fund would reduce amount of advertisement due to taxes levied. If we don’t commit any new public funding to the industry, total funding of the industry would be reduced. Even then, the social benefit of focusing on better educating citizens would dwarf reduced total spend. The result may be that we would consume perhaps less but more society-relevant media. Positive externalities include better public policy and governance in all areas of public life.
The idea of public regulation and funding in the space of media is neither new nor controversial. It’s called public broadcasting. BBC and NPR are examples of such media. Almost all governments around the world have long funded major news and media channels. The concept of government control on most popular media in a given country has been the norm up until the 1990s. So, the phenomenon where extensions of government do not affect the content of popular media is rather recent.
While public television such as BBC providing media for the interest of public, the public media ends up being consumed by a select few who are interested in the rather intellectual conversations. In the meanwhile, much of the public conversation today remain outside of influence of public broadcasting institutions. And their content and influence work against public interest driven by consumerism. Media Outcomes Fund brings back the government influence on quality of programs, while doing this in a competitive market setting and affecting all media.
Imagine distributors under such a system: they would need to optimise not only for clicks and advertising revenue, but also need to optimise to promote high quality media. Facebook would change its algorithm so that quality of content, which lies out of your social bubble is promoted to you. Publishers will train editors to ensure relevant content is prioritized — not only catching attention.
Important to note, Media OutcomesFund is not a construction to control and regulate the free speech. The idea combines market thinking with freedom of speech, and with public education to protect our democracy.
We cannot let media run its course with no (financial) consequences to its impact to the society. The opportunities in the digital age are here — that is technology to process big and complex data to allocate public funding across a large group of stakeholders. We are and we need policymakers to think innovatively to capture them.
