Monday, August 25, 2014

How Can We Measure Media Power?

We guess our cunning plan to get people to stop watching TV isn’t working

Power index, 15 major US media companies, based on the 2012 Pew Institute Media Consumption Survey
By Andrea Prat, Richard Paul Richman Professor of Business and Professor of Economics, Columbia University; and CEPR Research Fellow. Originally published at VoxEU.

 The media industry is different The media industry is undergoing a consolidation process. After the proposed merger between Comcast and Time Warner Cable, Rupert Murdoch’s Century Fox reportedly offered to buy Time Warner. The offer was rejected, but the prospect of a merger between two media groups of such size has reignited a public debate on the dangers of excessive media concentration.1 Unlike milk production, news production is central to the democratic process. Citizens receive political information from mass media and they use it to decide how to vote. By choosing what to report and how to report it, a media company can affect the views of its users and hence their voting decisions. This is not just a theoretical possibility. DellaVigna and Kaplan (2007) found that the entry of Fox News increased the national vote share of Republicans by 0.4 to 0.7 percentage points. The potential for political influence is what most people think of when they talk about the power of the media. Leveson Report (a comprehensive inquiry into the practices of the British Press following the News of the World scandal) concluded: “It is only through this plurality, specifically in relation to news and current affairs, that we can ensure that the public is able to be well informed on matters of local, national and international news and policy and able to play their full part in a democratic society”.2 Is CNN more or less influential than Yahoo News?