The media: an intrinsically perverse market


If car makers, instead of selling them to the users, gave them away because oil companies and garages paid them for each car given away —or sold way below its cost— so there would be many drivers buying gas and paying for repairs, would cars be as we know them today? Obviously not. Because the user is not the customer of the car makers, but rather an instrument to sell to those who produce gas and repair vehicles, cars would not be fuel-efficient and would be visiting the garage quite often. They would have to work reasonably well from the practical and economic point of view, since otherwise people would not use them. But car makers would not maximize their profit by producing the most cost-efficient cars, but rather by manufacturing vehicles that —within reason— guzzled as much gas and broke down as often as possible.

In a market like this, it would be to the advantage of car makers, oil companies and garages if competition among the first ones to attract users centered on aspects with little or no relationship to gas consumption and mechanical reliability, such as esthetics, comfort or safety. But above all, it would be very convenient for them if users were convinced that it is normal and unavoidable for cars to consume lots of gas and break down frequently.

It seems impossible that such a crazy, not to say perverse, market could exist in reality, since it distorts the logical responsibilities of exchange and conceals the interests at stake, but the fact is that it does indeed exist: the media market. With a few exceptions, radio and television are free, the Internet is usually also free of charge, while newspapers are free or sold at a price that does not usually exceed 35% of the total cost[1]. So… how does the news media market work? Well, very much like the crazy and perverse automobile market we have seen earlier, if it existed.

If we, the recipients, pay nothing, or amounts that usually do not even cover half the cost, and the media are owned by profit-making companies, the conclusion seems obvious: the recipients of the messages conveyed by the media cannot be the customers of those media. They no doubt play a fundamental role, but not the role of a customer, contrary to what is frequently said or suggested. Three questions arise: who are the customers?, what role do the recipients play? and what do the companies that own the media really sell to their customers (the real ones)?

*Read the entire version here.

About the Author

The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.

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