Power Over Profits: Here’s The Dirty Little Secret Behind The Media’s True Business Model
October 18, 2020 (1mo ago)

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Tucker Carlson’s prime-time Fox News show, Tucker Carlson Tonight, has shattered record after record to become the highest rated cable news program in television history. On any given night, Carlson’s must-watch program draws nearly 5 million Americans to the television set — a truly astonishing number we may never see again.

According to an analysis by iSpot.tv, Tucker Carlson accounts for 16 percent all ad revenue at Fox News. And during the six-month period of February through July of this year alone, Tucker generated $37.2 million for Fox News and smashed the competition.

Looking at the entire six-month period, SMI says “Tucker Carlson Tonight” pulled in $37.2 million as the best Fox News prime-time performer. Right behind was “The Ingraham Angle” ($36.6 million) and “Hannity” ($36.2 million)

MSNBC’s top show was “The Rachel Maddow Show” — $20.8 million, while CNN’s “Cuomo Prime Time” and “Anderson Cooper 360” tied with $19.1 million. [MediaPost]

The historic popularity and profitability of Tucker’s show raises a simple, yet important question: why have none of the major networks, including Fox, attempted to copy his success?

Wouldn’t the fabled “marketplace of ideas” dictate a certain convergence toward the topics and styles that draw the biggest audiences?

Perhaps the ad boycotts aimed at Tucker have scared off would-be copycats. But this simply raises the question of why companies would leave money on the table by refusing to advertise on television’s most popular cable news show. Something is off here, and it suggests that the media industry does not work according to a simple profit motive.

What if the true goal of a media conglomerate is not to produce a reliable and entertaining news service tailored to its audience, but rather to influence that audience on behalf of third parties? What if the purpose of a media company is not to be profitable for its own sake, but influential for the sake of others?

Business models aren’t always what they present themselves to be. Movie theaters make money not from ticket sales, but from concession stands. Airlines likewise need to sell tickets, but they make more profit from frequent flier rewards programs. Supermarkets are increasingly big data collectors for insurance companies.

Users of Google, YouTube, and other internet/social media services might think of themselves as “customers,” but they are actually the product, as those services collect detailed data on users and sell it to third parties for advertising purposes.

The Washington Post provides a clear example of a media company’s true business model.

Readers might recall that Amazon CEO Jeff Bezos purchased the Post for $250 million. The paper is of course notoriously biased against Trump, even by the standards of today’s mainstream media. This may be good for business and it may not be — but ultimately this is not what matters. What matters is that the Post is directly or indirectly profitable to its owner, Jeff Bezos. If it lost money, but influenced the public or other important constituencies in a manner that resulted in greater success for Amazon (a company 10,000 times its size), it would still be a worthwhile investment for Bezos.

We can generalize this principle by noting that the parent-subsidiary model is very common in business. Any given subsidiary does not have to be profitable in its own right so long as it benefits the parent company. In the case of The Washington Post, there is a clear “parent company” in the person of Jeff Bezos. But even absent the existence of a formal parent company, one can think of the American power structure itself as the true “parent company” of any sufficiently large and powerful media conglomerate.

Although in some cases this is a metaphor, it captures a very important feature of how the media and our country function. For a media empire operating at the highest levels, the influence it wields on the public’s mind is far more valuable to the ruling power structure than any self-contained profit that could be generated by optimizing their news product to suit the taste of the audience.

This does not mean that profit is irrelevant to a media company. In Tucker’s case, his stratospheric ratings are a great tool of leverage, and without profit, a company must continually court new investors. But the point remains that for a serious media enterprise, profit is always secondary to influence.

Just as a social media company’s true product is its user data, the true product of a major media company is the flow of narratives that shape the perception of reality. Wielding influence over the public mind will always be more valuable than any profit that could be generated by optimizing the news to suit public tastes.

Every serious media person playing the game at the highest level understands that media is about influence, not profit. Take this report on Jeff Bezos himself:

There most certainly could be, if everyone else were owned by a billionaire who sees today’s media game as analogous to the internet circa 1999, essentially a land grab open to whomever can spend the most money and move the fastest to grab the biggest market share. That is the story of the rise of Amazon.com, and Bezos is applying many of those same lessons to the Post. (Along with an obsession with Web traffic and engagement metrics, which are much more important internally than whether the paper makes any money.) [Columbia Journalism Review]

Rupert Murdoch is arguably the most brilliant media man alive. He owns most of News Corp, the parent company of the Fox News Channel. In a documentary on Murdoch’s career in media, an analyst with insight into Rupert’s mindset comments on his purchase of the New York Post, which for a very long time was not profitable.

NARRATOR: The Post became a New York favorite. Financially, it was a disaster, losing millions of dollars every year.

RON GROVER: “I don’t really think Rupert is in it to win, in terms of the bottom line. He likes the idea that it gives him a place at the table. He likes the idea that he can get his position out there. He likes the idea that it gets an entrée to politicians.”

(Skip to the 13:52 mark of the video to watch the short clip.)

Bezos’ and Murdoch’s attitudes toward media explain why Twitter is so valuable despite losing over $2 billion since its launch.

When Twitter went public back in 2013, it was an unprofitable company. More than two years later, that hasn’t changed. In fact, the company revealed in its annual 10-K filed Feb. 29 that it has lost more than $2 billion in total since launching a decade ago.

Twitter had already accrued more than $400 million in losses before going public, but that figure exploded upward after its IPO, largely due to stock-based compensation awarded to employees. The company lost $520 million in 2015 alone. [Time]

Twitter was allowed to operate at such a massive loss because it has a profound influence on shaping narratives that in turn influence the population.

Major media companies are not about profits, but influence — there is no “marketplace of ideas” that functions in the way people might imagine. And this applies to any industry that has a profound effect on the narratives and beliefs that shape the public’s perception of reality, including movies and video games.

In our increasingly corrupt society, every institution is a scam, and there is often a vast disconnect between the generally understood purpose of an institution and its actual purpose. Entire belief systems are generated to obscure this disconnect — and this where ideology comes into play.

The nice-sounding “ideology” of free-market fundamentalism serves to obfuscate the rapacious nature of oligarchs who operate beyond the bounds of any of the rules described in this naïve economic worldview. Communism and socialism, similarly, are ideologies that serve only to obscure the ulterior interests of the very same oligarchs and the very same corrupt ruling class.

Our observation about the media thus points to an interesting conclusion. The media’s job is to use its profound influence to ensure that the masses interpret political and cultural events though the distortive lens of ideology. Ideology is a “mediator” that separates the true nature of an institutional scam from the public’s perception of it, and the role of mainstream media is to maintain the dominance of ideology as the lens through which the public interprets reality.

Media and ideology are similarly deceptive, and they both serve to perpetuate the illusions that enable our corrupt ruling class to lie, cheat, and steal with impunity. By piercing the illusion of what the media really is, we get closer to a clear view of the corrupt special interests that that have enriched themselves at the expense of the American people. With this perspective at hand, the just, the true, and the brave are better positioned to strike back.

Revolver News is dedicated to news aggregation and analysis. We are dedicated to providing Americans of all backgrounds and political persuasions with timely, common-sense, accurate and compelling information. Be sure to check out our news feed.

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