THE NEWS MEDIA distribute much of the information we receive about the world around us. Thousands of politicians, policy researchers and opinion makers wish to transmit information to the public at large. The news media serve as intermediaries in this information market, selecting to transmit a fraction of the millions of potential messages to an audience (Wagner 1997). The accumulation of transmitted messages in the long run shapes the contours of our politics, religion and culture. (1)
The transmission of messages is costly, and the modern mass media rely mostly on advertising to cover these costs. Critics argue that advertising adversely affects the content of messages transmitted to the public since corporate advertisers have an interest in preserving the free enterprise system. Messages critical of business could lead to support for increased government regulation, stricter anti-trust enforcement, higher corporate taxes and perhaps even public ownership o large corporations. Therefore, they argue, advertising produces a political bias in the media.
As we shall see, the working press, including newspaper editors and television news producers and even the top media executives are beholden to media owners and corporate advertisers.... [E]xcept for momentary departures, a capitalist ideological perspective regarding events at home and abroad rather consistently predominates. The system of control works, although not with absolute perfection and is not devoid of items that might at times be discomforting to the rich and powerful (Parenti 1986:19-20).
Proponents press the corporate advertising bias argument in several ways. First, they rely on the obvious self-interest of corporations. Second, they offer numerous examples of the pro-business content of the media (Parenti 1986; Kellner 1990). Third, they offer examples of stories or programs purportedly killed due to pressure from or fear of offending advertisers (Bagdikian 1997; Parenti 1986).
Quantification of partisan media bias is quite difficult. In fact, other scholars claim to document an anti-business, pro-regulation bias in the media (Lichter, Rothman, and Lichter 1986; Pines with Lamer 1994). Given the inability to convincingly demonstrate bias through content analysis, I instead examine the conditions necessary for corporate advertising to control the content of the media. (2) The corporate bias argument has several weaknesses. I distinguish two motives for businesses to try to prevent transmission of messages--a narrow motive to avoid bad publicity for a firm or product, and a broad motive of maintaining a favorable political and cultural climate for business. A favorable climate for free enterprise is a public good; competitive pressures lead companies to seek audiences for their ads. Although a criticized company might withdraw its advertising, other potential advertisers would step forward to fill the void. Furthermore, alternatives to advertising exist for funding the transmission of messages, namely payments from the audience and contributions from patrons or the supplier of the message. Finally, buying and silencing radical news outlets faces collective action problems and is unlikely to be a cost-effective strategy. I contend that proponents of the corporate advertising bias argument have not satisfactorily specified a mechanism by which business's common interest translates into control of content.
Before evaluating the corporate bias argument, I begin with a discussion of efficiency in the news market. Messages are worth transmitting only if their value exceeds the next best use of the required resources. An alternative explanation exists for a paucity of fundamental critiques of the free enterprise system: lack of demand for such criticism. Low demand does not imply inefficiency in the news market; indeed, transmission of criticism in this case would involve waste of resources. Section II also reviews the established biases of advertising. The corporate bias argument claims business has a more than marginal effect on news coverage. This argument is closer to an impossibility claim, so the relevant question is whether corporate advertising and ownership has effects beyond the established economic consequences of advertising.
Corporate Advertising and Information Market Failure
TELEVISION AIR TIME and newspaper space are scarce goods. The efficient amount of news coverage equates the value of the marginal story with the value of alternative uses of these resources. Full efficiency requires balancing benefits on all the relevant margins: the size of the newspaper, the number of television stations, the balance between news and entertainment, and between different categories of news stories. For simplicity I consider the more limited question of efficiently allocating available news coverage. Efficiency here requires transmission of the most valuable news messages, as valued by all members of society. If size constraints allow transmission of 20 messages a day, efficiency requires transmission of the 20 most valued messages. Transmission of the 30th or 50th most valued message is inefficient. The messages with the largest audiences are not necessarily most valuable, since the intensity of audience members' preferences might vary.
The media today are funded primarily through advertising; in the case of television, effectively all revenue comes from advertising. The media produce an audience and sell advertisers access to this audience (Owen and Wildman 1992). The media in the United States are privately owned companies that should be seeking to maximize profit. I focus here on the news divisions. The news media serve as agents for their audience, selecting the most important events to cover and guaranteeing the truth of their reports. I take the existence of an audience for news as given. Application of profit maximization to the news implies that organizations seek the messages that generate the largest audience, since advertising rates depend on audience size. Cost is also a factor; news that costs more to produce, such as international news, must make a larger contribution to revenue.
Proponents of the corporate bias argument claim that the media serve the interests of advertisers over those of the audience (Parenti 1986; Herman and Chomsky 1988; Lee and Solomon 1990; Cohen and Solomon 1993). But businesses in the first instance want an audience for their ads, so the conflict between advertisers and audience is greatly overstated. Businesses can and sometimes do transmit their ads to the public unbundled from media messages, through advertising circulars, direct mail, billboards, infomercials and telemarketing. However, advertisers often choose to bundle their ads with the media's messages, thus paying for the production of news programs, because the associated news generates a larger audience than unbundled transmission. (3) Advertisers' first preference then is that the content of the media's product generate as large an audience as possible. Just as businesses must cater to consumer preferences in producing goods and services, advertisers need to cater to audience preferences to gain ex posure for their ads.
Advertisers want exposure to potential consumers …