Media Capture

by

Anya Schiffrin

• LAST REVIEWED: 22 September 2021
• LAST MODIFIED: 22 September 2021
• DOI: 10.1093/obo/9780199756841-0265

Introduction

Interest in the problem of “media capture,” as well as academic research on this subject, has grown tremendously since 2015. Worries about media bias and the influence of owners and advertisers have been around since at least the 1800s. What has changed is the rise of autocratic governments that seek to shape public opinion and the financial troubles facing many media outlets. This has made it easier, and cheaper, for oligarchs to buy struggling outlets, giving rise to media capture. Financial woes have also shaped the incentives for such takeovers. Previously, media owners may have had financial motives but, as profit margins are squeezed, the main reason to own an outlet is to further one’s political agenda. Hence the fear that capture is worsening. The term “media capture” was first defined by a small group of economists at the beginning of the 21st century. These economists built on previous theories of regulatory capture often associated with George Stigler. Stigler used the term to explain why, instead of regulators doing their jobs, they become allied with the entities they were meant to be regulating. For the first few years, the term was not known widely in the journalism and communication fields but that has now changed. Indeed, it was political scientist Alina Mungiu-Pippidi (for more information, see: Mungiu-Pippidi, Alina. 2008. “How Media and Politics Shape Each Other in the New Europe.” In: Karol Jakubowicz and Miklós Sükösd, eds. Finding the Right Place on the Map: Central and Eastern European Media Change in a Global Perspective, Chicago: Intellect, pp. 87–100), who came up with a widely used working definition of media capture, describing it as a situation in which the news media are controlled “either directly by governments or by vested interests networked with politics” (p. 91). In this definition, it is important to focus not just on “government” but on “vested interests.” Thinking about how the state of media capture has evolved, Mungiu-Pippidi has refined her definition to distinguish between outcomes and mechanisms, noting that capture is the outcome and problems like self-censorship or soft-pressures are mechanisms by which capture is achieved. Other definitions include political scientists Daniel Hallin and Paolo Mancini’s descriptions of “instrumentalization of the media,” while economist Maria Petrova defines media capture as “one possible form of institutional subversion used by the rich to grasp benefits in the struggle for resources in an economy” (Petrova, Maria. 2008. Inequality and Media Capture. Journal of Public Economics 92:187). The author thanks Chloe Oldham and Sofia Bennett for their research.

Economics Literature on Media Capture

Economists were the first to coin the expression “media capture” and their early papers explained its definition, causes, and effects. Economists examined whether the incentives of those in the media, especially owners, distort media coverage. Outlets depending on sales had incentives for yellow journalism, but this was counteracted with incentives for maintaining a long-term reputation. In the economics literature, capture has had a wide ambit: it could be owners using the media to generate contracts with government and to induce government to pass legislation in their favor, or curbing criticism of some industry, lest they lose advertising from that sector, or curbing discussions of some topic, lest they lose some part of their subscriber base. Economists try to quantity the extent of capture. Presumably, for instance, a newspaper more dependent on government advertising would be more reluctant to criticize a government which allocates advertising. That is a precise hypothesis that can and has been tested. Once one has a measure of the extent to which an outlet has been captured, other questions can then be asked: to what extent does capture affect its credibility and its effectiveness? George Stigler is credited with being the first economist to write about capture, although he never actually uses the word. He argues in Stigler 1971 that government agencies were increasingly becoming what we now call “captured” by the industries they were responsible for regulating, leading to regulators acting in the corporation’s interest rather than in that of the broader public. Besley and Prat 2006 looks at how even in nominally democratic societies, the media is not fully free. The authors use the term “capture” to describe the way government and business can collaborate to control the media. From there, economists delineated the role of government advertising in capturing media and debated whether competition in media markets would help limit capture—a question that has not been fully answered. Di Tella and Franceschelli 2011 examines government advertising placed in Argentine newspapers, finding that newspapers with more government advertising published diminished coverage of government corruption. Gehlbach and Sonin 2014 provides a theoretical framework to analyze government control of the media, arguing that increased bias will lower consumption of the news and that drives down advertising revenue. Blasco and Sobbrio 2012 further examines the influence of advertising. Prat 2016 highlights the role of transaction costs and commercial revenue in media capture. Corneo 2006 links media capture to economic inequality. Owen and Wei 2020 argues that in areas with greater economic inequality people seek out individual success stories. Dyck and Zingales 2002 argues that non-captured media can promote corporate governance. Cagé 2020 documents how increased competition would hurt the quality of information. Trombetta and Rossignoli 2020 examines the digitization of European television, finding that increased competition does not necessarily lead to higher-quality coverage.

• Besley, Timothy, and Andrea Prat. 2006. Handcuffs for the grabbing hand? Media capture and government accountability. American Economic Review 96.3: 720–736.

  DOI: 10.1257/aer.96.3.720

  One of the most important papers on media capture. Besley and Prat tried to explain the situation in nominally democratic countries where the media is still not at liberty to do proper investigative and accountability reporting and function as a fully free and independent entity. They referred to the phenomenon as “non-coercive media capture” to explain why it happened and the consequences. The paper gave rise to a new school of thought in economics about the media and influenced work in other fields as well.

• Blasco, Andrea, and Francesco Sobbrio. 2012. Competition and commercial media bias. Telecommunications Policy 36.5: 434–447.

  DOI: 10.1016/j.telpol.2011.11.021

  This paper analyzes literature on the influence of advertising on news coverage of tobacco, big pharma, and climate change. The authors highlight regulatory implications, including the idea that competition between advertisers may result in lower accuracy of news reports. The paper concludes by stating two principal views on the impact of advertising: the “regulatory” view, which sees advertising as distorting reporting, and the “liberal” view, which suggests that advertising supports media independence. Overall, the literature provides mixed evidence.

• Cagé, Julia. 2020. Media competition, information provision and political participation: Evidence from French local newspapers and elections, 1944–2014. Journal of Public Economics 185:1–24.

  DOI: 10.1016/j.jpubeco.2019.104077

  This paper, while not dealing directly with capture, has important implications for understanding media capture in the digital age. Cagé has long argued that increased competition in media markets does not lead to higher quality. This paper uses data from local French newspapers between 1944 and 2014 and finds that not only did increased competition lead to lower quality, as newspapers struggled to compete financially, but voter turnout also decreased, possibly because voters were less informed following the competition-led decline in information provision.

• Corneo, Giacomo. 2006. Media capture in a democracy: The role of wealth concentration. Journal of Public Economics 90.1: 37–58.

  DOI: 10.1016/j.jpubeco.2005.08.002

  Corneo argues that there may be a vicious circle: media capture may lead to policies—such as greater toleration of market power—which in turn facilitate further media capture. This would occur if captured media collude with interest groups. Thus, increased economic concentration in societies makes the occurrence of media bias more likely and that generally leads to a worsening in the quality of public welfare.

• Di Tella, Rafael, and Ignacio Franceschelli. 2011. Government advertising and media coverage of corruption scandals. American Economic Journal: Applied Economics 3.4: 119–151.

  DOI: 10.1257/app.3.4.119

  This widely cited economics paper is an important one for the field. Finds a significant negative correlation between government advertising and coverage of government corruption scandals in Argentina’s top four newspapers, between 1998 and 2007.

• Dyck, Alexander, and Luigi Zingales. 2002. The corporate governance role of the media. NBER Working Papers 9309: 5.

  DOI: 10.3386/w9309

  Argues that the media has a strong role to play in corporate governance and, using examples from Russia, finds that a non-captured media is able to affect corporate behavior partly because companies respond to coverage that affects their reputation. “Countries with a larger newspaper circulation have better environmental responsiveness, on average,” the authors write.

• Gehlbach, Scott, and Kostantin Sonin. 2014. Government control of the media. Journal of Public Economics 118:163–171.

  DOI: 10.1016/j.jpubeco.2014.06.004

  This is part of a school of economics literature that looks at the circumstances under which media capture can take place and the importance of government ownership, advertising, and competition in media markets. The authors find that growth in the advertising market reduces bias but may also prompt government to control the media, which then increases bias. Media bias is greater in autocracies but as governments become more democratic, media biases in state and private media diverge.

• Owen, Ann, and Andrew Wei. 2020. Inequality and bias in the demand for and supply of new0073. Social Science Quarterly 1:91–106.

  DOI: 10.1111/ssqu.12734

  This paper finds that when inequality increases in areas that are more politically conservative, demand for more news stories of individual success rises. More of these stories are supplied when inequality is higher in politically liberal areas, so that elites who own the media can justify their control of economic wealth. This is consistent with Petrova 2008 (cited under Political, Economic, and Social Effects of Capture), which finds that media capture affects the content of the news that is supplied.

• Prat, Andrea. 2016. Media capture and media power. In Handbook of media economics. Edited by Simon Anderson, David Strömberg, and Joel Waldfogel, 688–700. Oxford: Elsevier.

  DOI: 10.1016/B978-0-444-63685-0.00016-4

  This comprehensive paper sums up much of the economics literature on media capture but adds to it by further developing Prat’s findings on media power. Outlets that have large audiences and publish biased or selective information can lead to “worse outcomes” for the electorate. Prat proposes a range of regulatory solutions, highlights the point that plurality of media can help limit media power, and argues that public service broadcasters are an effective counterweight when transaction costs between government and media are high.

• Stigler, George J. 1971. The theory of economic regulation. Bell Journal of Economics and Management Science 2.1: 3–21.

  DOI: 10.2307/3003160

  Stigler theorizes about how regulations come into existence and the different theories about how competing interests benefit or don’t from regulation. Stigler writes: “A central thesis of this paper is that, as a rule, regulation is acquired by the industry and is designed and operated for its benefit” (p. 4). This is because regulators pass regulations to benefit large companies that are producers instead of protecting consumers, because producers exert more powerful special interest pressure than consumers exert electoral pressure.

• Trombetta, Frederico, and Domenico Rossignoli. 2020. The price of silence: Media competition, capture, and electoral accountability. European Journal of Political Economy 1–43.

  DOI: 10.1016/%20j.ejpoleco.2020.101939

  The authors added to traditional theories of capture by highlighting the question of competition. In the first decade of the 21st century, the European Union mandated the digitization of terrestrial television. This transition to digital was intended to reduce transmission costs and give consumers more choice. However, the authors’ findings support the views that media capture can be worsened by an increase in market competition because competition can undermine profitability and weakened outlets are more susceptible to capture.