The Value of News: Aligning Economic and Social Value From an Institutional Perspective

Abstract

Journalism is considered essential to a functioning democracy. However, the continued viability of commercial news production is uncertain. News producers continue to lose advertising revenue to platform businesses dominating digital advertising markets, and alternate consumer direct revenue streams are not yet meeting the financial shortfall. This has led to questions of who should pay for news, the role of governments in maintaining news production viability, and whether digital platforms have social or economic responsibilities to pay news publishers. In this article, we seek to make explicit what is often implicit in such debates, which is the value of news. This is hard to know in advance as news is an experience good whose value and quality are only known after consuming it, and a credence good, whose perceived qualities may not be observable even after it is consumed. As such, preparedness to pay for news can be hard to ascertain, accentuated by the large amount of free news available online. This article seeks to use a value perspective to consider the relationship between individual consumer choices and questions of news's value to society. Applying a new institutional economic perspective, it is observed that the value of news as a consumer product needs to be examined in relation to its value as a social good in democratic societies as both a media product and part of the institutional environment in which other social actors operate. We consider news's social and economic value within a context of platformed news distribution and declining advertising revenues that appear to be structural and not cyclical.