I’ve written before about how we used to have three TV channels. We also had only a handful of local newspapers (or just one if you lived in a town or smaller city) that everybody read.
For better or worse you started out with at least one version of the story, biased or not, as a jumping-off point for discussion. We’ve come a long way since then.
We’ve had the increasingly left or right orientation of mainstream media - FOX being one example. Recently all of the mainstream media groups have started offering paid members-only “channels” that offer even more radical programming. In the case of the right, they tend you couch it as being for “true believers.”
Increasingly you are forced to make choices about your sources of information because they require a subscription. Since you’re paying for them these are going to be your primary sources of “information” about what’s going on.
Because I do research for a living I have to gather a range of inputs from as many angles as possible. That means I have to allocate time and attention to multiple, very different sources.
What I find is that they are all increasingly polarized and equally guilty of taking things out of context and embellishing facts to suit their biases.
It’s common for me to see opposing but quite believable stories of the same event based on how each side decided which “facts” and images to include to support their story. Whatever you wish to call it all sides appear to be actively doing it.
News Should not be Firewalled
The news was never free but because it was subsidized by entertainment content and classified it got paid for. It was accessible to everyone, whatever their bias or viewpoint. Some outlets had a clear bias which was fine. It was free so you’d still give it a read.
Now you have to decide upfront and pay for access. It’s a little like paying to get inside an echo chamber. Unless you have extra money and attention to spare it’s doubtful you’ll seek out other outlets covering the same story with a different point of view.
As I also noted in the “three channels” note we are back to that in the form of aggregators like Google and Facebook. As we have come to learn these aggregators use algorithms that tend to reinforce the things we have already shown an affinity for. Leading to more isolation and deeper conviction around one side of the story.
But “news” will no longer be out in the open. It will be widely shared and noted but often in snippets and excerpted. The vast majority of people have zero desire to “work hard” for their news - they want to be spoon-fed and entertained in the process. We will all be getting what we pay for.
Plenty of Bad Stories
Unfortunately, there is a lot of unfairness, incompetence, and bad behavior out there. So much that you can weave together just about any story you want and back with a plausible array of data points, many of which are facts or at least close enough.
Rich people in the US are too rich and lots of normal middle-class working people have not done well in the last decade or two. COVID vaccines are a path to freedom or the mandates are the end of freedom as we know it. Governments need to intervene for the common good or anytime a government intervenes it’s a disaster. Immigrants built the country or immigrants are bad and stealing from you. Poor families are helped tremendously but poverty-ending benefits or unscrupulous criminals are gaming the system to live off the government dole. And you know, guys like Jeffery Epstein and the people that enabled him.
All mainstream media competes aggressively for your time and attention. They all know that you are unlikely to respond to the most common results in the world - “an average person sees something and does the normal, expected and the good thing about it.” If that’s 99% of the world their job is to find the 1% and make you really amped up about it so you’ll not only click and read it but reshare it and promote it to your friends, family, neighbors, etc. (See the movie The Social Network for more on this.)
To be fair some of these paid-member-only channels also include positive content that appeals to their readership. It still often has an edge of advancing a particular agenda but still, they find some great positive stories too.
Investment Implications?
I wrote about this because it’s clearly a thing now. It also appears to be pervasive and durable. That implies there could be some material investment implications going forward.
At a micro-level, we’re already starting to group some consumer companies based on affinities and demographics. A customer of Malibu Boats (MBUU) is likely to have Yeti (YETI) in their kit. A Canada Goose (GOOS) wearer is more likely to have a Peloton (PTON). Then we have the coming debut of Black Rifle Coffee which I really like and should be an important data point.
At the macro-level, it’s hard to say. I feel like it’s going to add to volatility and different narratives over when future growth is going to look like. It also begs some questions around the fiscal and social policy.
At the base level, I’m convinced this is a factor that has to be part of our analysis of any consumer company and at least a question around our views of the macro environment.