I’ve Been at NPR for 25 Years. Here’s How We Lost America’s Trust.

By Uri Berliner. 

"You know the stereotype of the NPR listener: an EV-driving, Wordle-playing, tote bag–carrying coastal elite. It doesn’t precisely describe me, but it’s not far off. I’m Sarah Lawrence–educated, was raised by a lesbian peace activist mother, I drive a Subaru, and Spotify says my listening habits are most similar to people in Berkeley.

 

I fit the NPR mold. I’ll cop to that.

 

So when I got a job here 25 years ago, I never looked back. As a senior editor on the business desk where news is always breaking, we’ve covered upheavals in the workplace, supermarket prices, social media, and AI.

 

It’s true NPR has always had a liberal bent, but during most of my tenure here, an open-minded, curious culture prevailed. We were nerdy, but not knee-jerk, activist, or scolding.

 

In recent years, however, that has changed. Today, those who listen to NPR or read its coverage online find something different: the distilled worldview of a very small segment of the U.S. population.

 

If you are conservative, you will read this and say, duh, it’s always been this way.

 

But it hasn’t.

 

For decades, since its founding in 1970, a wide swath of America tuned in to NPR for reliable journalism and gorgeous audio pieces with birds singing in the Amazon. Millions came to us for conversations that exposed us to voices around the country and the world radically different from our own—engaging precisely because they were unguarded and unpredictable. No image generated more pride within NPR than the farmer listening to Morning Edition from his or her tractor at sunrise.

 

Back in 2011, although NPR’s audience tilted a bit to the left, it still bore a resemblance to America at large. Twenty-six percent of listeners described themselves as conservative, 23 percent as middle of the road, and 37 percent as liberal.

 

By 2023, the picture was completely different: only 11 percent described themselves as very or somewhat conservative, 21 percent as middle of the road, and 67 percent of listeners said they were very or somewhat liberal. We weren’t just losing conservatives; we were also losing moderates and traditional liberals.

 

An open-minded spirit no longer exists within NPR, and now, predictably, we don’t have an audience that reflects America.

 

That wouldn’t be a problem for an openly polemical news outlet serving a niche audience. But for NPR, which purports to consider all things, it’s devastating both for its journalism and its business model.

 

 

Like many unfortunate things, the rise of advocacy took off with Donald Trump. As in many newsrooms, his election in 2016 was greeted at NPR with a mixture of disbelief, anger, and despair. (Just to note, I eagerly voted against Trump twice but felt we were obliged to cover him fairly.) But what began as tough, straightforward coverage of a belligerent, truth-impaired president veered toward efforts to damage or topple Trump’s presidency.

 

Persistent rumors that the Trump campaign colluded with Russia over the election became the catnip that drove reporting. At NPR, we hitched our wagon to Trump’s most visible antagonist, Representative Adam Schiff.

 

Schiff, who was the top Democrat on the House Intelligence Committee, became NPR’s guiding hand, its ever-present muse. By my count, NPR hosts interviewed Schiff 25 times about Trump and Russia. During many of those conversations, Schiff alluded to purported evidence of collusion. The Schiff talking points became the drumbeat of NPR news reports.

 

But when the Mueller report found no credible evidence of collusion, NPR’s coverage was notably sparse. Russiagate quietly faded from our programming.

 

It is one thing to swing and miss on a major story. Unfortunately, it happens. You follow the wrong leads, you get misled by sources you trusted, you’re emotionally invested in a narrative, and bits of circumstantial evidence never add up. It’s bad to blow a big story.

 

What’s worse is to pretend it never happened, to move on with no mea culpas, no self-reflection. Especially when you expect high standards of transparency from public figures and institutions, but don’t practice those standards yourself. That’s what shatters trust and engenders cynicism about the media.

 

Russiagate was not NPR’s only miscue.

 

In October 2020, the New York Post published the explosive report about the laptop Hunter Biden abandoned at a Delaware computer shop containing emails about his sordid business dealings. With the election only weeks away, NPR turned a blind eye. Here’s how NPR’s managing editor for news at the time explained the thinking: “We don’t want to waste our time on stories that are not really stories, and we don’t want to waste the listeners’ and readers’ time on stories that are just pure distractions.”

 

But it wasn’t a pure distraction, or a product of Russian disinformation, as dozens of former and current intelligence officials suggested. The laptop did belong to Hunter Biden. Its contents revealed his connection to the corrupt world of multimillion-dollar influence peddling and its possible implications for his father.

 

The laptop was newsworthy. But the timeless journalistic instinct of following a hot story lead was being squelched. During a meeting with colleagues, I listened as one of NPR’s best and most fair-minded journalists said it was good we weren’t following the laptop story because it could help Trump.

 

When the essential facts of the Post’s reporting were confirmed and the emails verified independently about a year and a half later, we could have fessed up to our misjudgment. But, like Russia collusion, we didn’t make the hard choice of transparency.

 

Politics also intruded into NPR’s Covid coverage, most notably in reporting on the origin of the pandemic. One of the most dismal aspects of Covid journalism is how quickly it defaulted to ideological story lines. For example, there was Team Natural Origin—supporting the hypothesis that the virus came from a wild animal market in Wuhan, China. And on the other side, Team Lab Leak, leaning into the idea that the virus escaped from a Wuhan lab.

 

The lab leak theory came in for rough treatment almost immediately, dismissed as racist or a right-wing conspiracy theory. Anthony Fauci and former NIH head Francis Collins, representing the public health establishment, were its most notable critics. And that was enough for NPR. We became fervent members of Team Natural Origin, even declaring that the lab leak had been debunked by scientists.

 

But that wasn’t the case.

 

When word first broke of a mysterious virus in Wuhan, a number of leading virologists immediately suspected it could have leaked from a lab there conducting experiments on bat coronaviruses. This was in January 2020, during calmer moments before a global pandemic had been declared, and before fear spread and politics intruded.

 

Reporting on a possible lab leak soon became radioactive. Fauci and Collins apparently encouraged the March publication of an influential scientific paper known as “The Proximal Origin of SARS-CoV-2.” Its authors wrote they didn’t believe “any type of laboratory-based scenario is plausible.”

 

But the lab leak hypothesis wouldn’t die. And understandably so. In private, even some of the scientists who penned the article dismissing it sounded a different tune. One of the authors, Andrew Rambaut, an evolutionary biologist from Edinburgh University, wrote to his colleagues, “I literally swivel day by day thinking it is a lab escape or natural.”

 

Over the course of the pandemic, a number of investigative journalists made compelling, if not conclusive, cases for the lab leak. But at NPR, we weren’t about to swivel or even tiptoe away from the insistence with which we backed the natural origin story. We didn’t budge when the Energy Department—the federal agency with the most expertise about laboratories and biological research—concluded, albeit with low confidence, that a lab leak was the most likely explanation for the emergence of the virus.

 

Instead, we introduced our coverage of that development on February 28, 2023, by asserting confidently that “the scientific evidence overwhelmingly points to a natural origin for the virus.”

 

When a colleague on our science desk was asked why they were so dismissive of the lab leak theory, the response was odd. The colleague compared it to the Bush administration’s unfounded argument that Iraq possessed weapons of mass destruction, apparently meaning we won’t get fooled again. But these two events were not even remotely related. Again, politics were blotting out the curiosity and independence that ought to have been driving our work.

 

NPR editor Uri Berliner tells how the network lost America's trust in The Free Press

Uri Berliner near his home in Washington, D.C., on April 5, 2024. (Photo by Pete Kiehart for The Free Press)

I’m offering three examples of widely followed stories where I believe we faltered. Our coverage is out there in the public domain. Anyone can read or listen for themselves and make their own judgment. But to truly understand how independent journalism suffered at NPR, you need to step inside the organization.

 

You need to start with former CEO John Lansing. Lansing came to NPR in 2019 from the federally funded agency that oversees Voice of America. Like others who have served in the top job at NPR, he was hired primarily to raise money and to ensure good working relations with hundreds of member stations that acquire NPR’s programming.

 

After working mostly behind the scenes, Lansing became a more visible and forceful figure after the killing of George Floyd in May 2020. It was an anguished time in the newsroom, personally and professionally so for NPR staffers. Floyd’s murder, captured on video, changed both the conversation and the daily operations at NPR.

 

Given the circumstances of Floyd’s death, it would have been an ideal moment to tackle a difficult question: Is America, as progressive activists claim, beset by systemic racism in the 2020s—in law enforcement, education, housing, and elsewhere? We happen to have a very powerful tool for answering such questions: journalism. Journalism that lets evidence lead the way.

 

But the message from the top was very different. America’s infestation with systemic racism was declared loud and clear: it was a given. Our mission was to change it.

 

“When it comes to identifying and ending systemic racism,” Lansing wrote in a companywide article, “we can be agents of change. Listening and deep reflection are necessary but not enough. They must be followed by constructive and meaningful steps forward. I will hold myself accountable for this.”

 

And we were told that NPR itself was part of the problem. In confessional language he said the leaders of public media, “starting with me—must be aware of how we ourselves have benefited from white privilege in our careers. We must understand the unconscious bias we bring to our work and interactions. And we must commit ourselves—body and soul—to profound changes in ourselves and our institutions.”

 

He declared that diversity—on our staff and in our audience—was the overriding mission, the “North Star” of the organization. Phrases like “that’s part of the North Star” became part of meetings and more casual conversation.

 

Race and identity became paramount in nearly every aspect of the workplace. Journalists were required to ask everyone we interviewed their race, gender, and ethnicity (among other questions), and had to enter it in a centralized tracking system. We were given unconscious bias training sessions. A growing DEI staff offered regular meetings imploring us to “start talking about race.” Monthly dialogues were offered for “women of color” and “men of color.” Nonbinary people of color were included, too.

 

These initiatives, bolstered by a $1 million grant from the NPR Foundation, came from management, from the top down. Crucially, they were in sync culturally with what was happening at the grassroots—among producers, reporters, and other staffers. Most visible was a burgeoning number of employee resource (or affinity) groups based on identity.

 

They included MGIPOC (Marginalized Genders and Intersex People of Color mentorship program); Mi Gente (Latinx employees at NPR); NPR Noir (black employees at NPR); Southwest Asians and North Africans at NPR; Ummah (for Muslim-identifying employees); Women, Gender-Expansive, and Transgender People in Technology Throughout Public Media; Khevre (Jewish heritage and culture at NPR); and NPR Pride (LGBTQIA employees at NPR).

 

All this reflected a broader movement in the culture of people clustering together based on ideology or a characteristic of birth. If, as NPR’s internal website suggested, the groups were simply a “great way to meet like-minded colleagues” and “help new employees feel included,” it would have been one thing.

 

But the role and standing of affinity groups, including those outside NPR, were more than that. They became a priority for NPR’s union, SAG-AFTRA—an item in collective bargaining. The current contract, in a section on DEI, requires NPR management to “keep up to date with current language and style guidance from journalism affinity groups” and to inform employees if language differs from the diktats of those groups. In such a case, the dispute could go before the DEI Accountability Committee.

 

In essence, this means the NPR union, of which I am a dues-paying member, has ensured that advocacy groups are given a seat at the table in determining the terms and vocabulary of our news coverage.

 

Conflicts between workers and bosses, between labor and management, are common in workplaces. NPR has had its share. But what’s notable is the extent to which people at every level of NPR have comfortably coalesced around the progressive worldview.

 

And this, I believe, is the most damaging development at NPR: the absence of viewpoint diversity.

 

 

There’s an unspoken consensus about the stories we should pursue and how they should be framed. It’s frictionless—one story after another about instances of supposed racism, transphobia, signs of the climate apocalypse, Israel doing something bad, and the dire threat of Republican policies. It’s almost like an assembly line.

 

The mindset prevails in choices about language. In a document called NPR Transgender Coverage Guidance—disseminated by news management—we’re asked to avoid the term biological sex. (The editorial guidance was prepared with the help of a former staffer of the National Center for Transgender Equality.) The mindset animates bizarre stories—on how The Beatles and bird names are racially problematic, and others that are alarmingly divisive; justifying looting, with claims that fears about crime are racist; and suggesting that Asian Americans who oppose affirmative action have been manipulated by white conservatives.

 

More recently, we have approached the Israel-Hamas war and its spillover onto streets and campuses through the “intersectional” lens that has jumped from the faculty lounge to newsrooms. Oppressor versus oppressed. That’s meant highlighting the suffering of Palestinians at almost every turn while downplaying the atrocities of October 7, overlooking how Hamas intentionally puts Palestinian civilians in peril, and giving little weight to the explosion of antisemitic hate around the world.

 

For nearly all my career, working at NPR has been a source of great pride. It’s a privilege to work in the newsroom at a crown jewel of American journalism. My colleagues are congenial and hardworking.

 

I can’t count the number of times I would meet someone, describe what I do, and they’d say, “I love NPR!”

 

And they wouldn’t stop there. They would mention their favorite host or one of those “driveway moments” where a story was so good you’d stay in your car until it finished.

 

It still happens, but often now the trajectory of the conversation is different. After the initial “I love NPR,” there’s a pause and a person will acknowledge, “I don’t listen as much as I used to.” Or, with some chagrin: “What’s happening there? Why is NPR telling me what to think?”

 

In recent years I’ve struggled to answer that question. Concerned by the lack of viewpoint diversity, I looked at voter registration for our newsroom. In D.C., where NPR is headquartered and many of us live, I found 87 registered Democrats working in editorial positions and zero Republicans. None.

 

So on May 3, 2021, I presented the findings at an all-hands editorial staff meeting. When I suggested we had a diversity problem with a score of 87 Democrats and zero Republicans, the response wasn’t hostile. It was worse. It was met with profound indifference. I got a few messages from surprised, curious colleagues. But the messages were of the “oh wow, that’s weird” variety, as if the lopsided tally was a random anomaly rather than a critical failure of our diversity North Star.

 

In a follow-up email exchange, a top NPR news executive told me that she had been “skewered” for bringing up diversity of thought when she arrived at NPR. So, she said, “I want to be careful how we discuss this publicly.”

 

For years, I have been persistent. When I believe our coverage has gone off the rails, I have written regular emails to top news leaders, sometimes even having one-on-one sessions with them. On March 10, 2022, I wrote to a top news executive about the numerous times we described the controversial education bill in Florida as the “Don’t Say Gay” bill when it didn’t even use the word gay. I pushed to set the record straight, and wrote another time to ask why we keep using that word that many Hispanics hate—Latinx. On March 31, 2022, I was invited to a managers’ meeting to present my observations.

 

Throughout these exchanges, no one has ever trashed me. That’s not the NPR way. People are polite. But nothing changes. So I’ve become a visible wrong-thinker at a place I love. It’s uncomfortable, sometimes heartbreaking.

 

Even so, out of frustration, on November 6, 2022, I wrote to the captain of ship North Star—CEO John Lansing—about the lack of viewpoint diversity and asked if we could have a conversation about it. I got no response, so I followed up four days later. He said he would appreciate hearing my perspective and copied his assistant to set up a meeting. On December 15, the morning of the meeting, Lansing’s assistant wrote back to cancel our conversation because he was under the weather. She said he was looking forward to chatting and a new meeting invitation would be sent. But it never came.

 

I won’t speculate about why our meeting never happened. Being CEO of NPR is a demanding job with lots of constituents and headaches to deal with. But what’s indisputable is that no one in a C-suite or upper management position has chosen to deal with the lack of viewpoint diversity at NPR and how that affects our journalism.

 

Which is a shame. Because for all the emphasis on our North Star, NPR’s news audience in recent years has become less diverse, not more so. Back in 2011, our audience leaned a bit to the left but roughly reflected America politically; now, the audience is cramped into a smaller, progressive silo.

 

Despite all the resources we’d devoted to building up our news audience among blacks and Hispanics, the numbers have barely budged. In 2023, according to our demographic research, 6 percent of our news audience was black, far short of the overall U.S. adult population, which is 14.4 percent black. And Hispanics were only 7 percent, compared to the overall Hispanic adult population, around 19 percent. Our news audience doesn’t come close to reflecting America. It’s overwhelmingly white and progressive, and clustered around coastal cities and college towns.

 

These are perilous times for news organizations. Last year, NPR laid off or bought out 10 percent of its staff and canceled four podcasts following a slump in advertising revenue. Our radio audience is dwindling and our podcast downloads are down from 2020. The digital stories on our website rarely have national impact. They aren’t conversation starters. Our competitive advantage in audio—where for years NPR had no peer—is vanishing. There are plenty of informative and entertaining podcasts to choose from.

 

Even within our diminished audience, there’s evidence of trouble at the most basic level: trust.

 

In February, our audience insights team sent an email proudly announcing that we had a higher trustworthy score than CNN or The New York Times. But the research from Harris Poll is hardly reassuring. It found that “3-in-10 audience members familiar with NPR said they associate NPR with the characteristic ‘trustworthy.’ ” Only in a world where media credibility has completely imploded would a 3-in-10 trustworthy score be something to boast about.

 

With declining ratings, sorry levels of trust, and an audience that has become less diverse over time, the trajectory for NPR is not promising. Two paths seem clear. We can keep doing what we’re doing, hoping it will all work out. Or we could start over, with the basic building blocks of journalism. We could face up to where we’ve gone wrong. News organizations don’t go in for that kind of reckoning. But there’s a good reason for NPR to be the first: we’re the ones with the word public in our name.

 

Despite our missteps at NPR, defunding isn’t the answer. As the country becomes more fractured, there’s still a need for a public institution where stories are told and viewpoints exchanged in good faith. Defunding, as a rebuke from Congress, wouldn’t change the journalism at NPR. That needs to come from within.

 

A few weeks ago, NPR welcomed a new CEO, Katherine Maher, who’s been a leader in tech. She doesn’t have a news background, which could be an asset given where things stand. I’ll be rooting for her. It’s a tough job. Her first rule could be simple enough: don’t tell people how to think. It could even be the new North Star.

 

 

Uri Berliner is a senior business editor and reporter at NPR. His work has been recognized with a Peabody Award, a Loeb Award, an Edward R. Murrow Award, and a Society of Professional Journalists New America Award, among others. Follow him on X (formerly Twitter) @uberliner."

Biden’s Social-Media Censorship Harms Us All

The First Amendment protects the right to hear alternative views, not merely to express them

By Philip Hamburger. He teaches at Columbia and is CEO of the New Civil Liberties Alliance. Excerpts:

"Government officials repeatedly made public statements demanding censorship from the platforms. The announced policy was grossly overbroad. It thereby has directly tended to chill the speech of vast numbers of Americans, quite apart from the suppression that the government obtained through the platforms. Anyone with views opposed to the administration has had reason to temper what he says to avoid being deplatformed, demonetized or deboosted."

"People can’t develop their views with any sophistication unless they can consider opinions that enlarge, refine, moderate or challenge their own. So, when government demands the suppression of some speech and chills even more, it reduces the diversity, value and moderation of opinion—and thereby diminishes the opportunity for every individual to develop and express his own considered views."

"Therefore, when vast numbers of Americans are chilled in their scientific and medical speech, it dangerously injures all of us, who suffer a diminished opportunity to learn and to reconsider and refine our own views."

A False Narrative About ‘Misinformation’ and Covid Vaccines

The evidence suggests resistance is based largely on pre-existing attitudes, not bad information.

By Robert M. Kaplan. Mr. Kaplan is a faculty member at Stanford University’s Clinical Excellence Research Center, a former associate director of the National Institutes of Health, and a former chief science officer for the U.S. Agency for Healthcare Research and Quality.

"The idea that recent, deliberate misinformation campaigns created hesitancy to the Covid-19 vaccine appears itself to be misinformation.

Over the past year the Stanford Clinical Excellence Research Center has asked representative samples of the U.S. population about the likelihood they would accept vaccines. A poll completed in August 2020 showed that about 20% of the population reported they were very unlikely to take a vaccine even if the evidence suggested it was safe and effective. Another 15% said they were unlikely to take it. Those two categories add up to approximately the percentage of adults yet to get a first dose a year later.

Without even knowing there would be a vaccine, more than a third of the population told us they were not planning to accept it.

The study was repeated in late December 2020 after highly impressive results from clinical trials led the Food and Drug Administration to give emergency-use authorization for two vaccines. News cycles prior to our December survey were dominated by stories on the potential for vaccines. Still, about 35% said they were unlikely or very unlikely to take the vaccine. The numbers are almost identical to those seen in August when vaccine potential had not received public scrutiny. 

The Stanford finding that 20% would be very unlikely to take the vaccine is consistent with a variety of other studies. Monthly polls by the Kaiser Family Foundation show the percentage saying they will definitely not take the vaccine or take it only if required has held steady at around 20%.  

Our studies also looked at demographic factors related to self-reported vaccine hesitancy. Older adults, women, Asian-Americans, and college graduates were more likely to say they would take the vaccine, while African-American and Hispanic respondents were more hesitant. And even before it was known if a vaccine would ever be available, Biden supporters were significantly more likely than Trump followers to say they would get the shot.

We also looked at the likelihood people would take the vaccine under a variety of hypothetical circumstances. To our surprise, information on the expected side effects and benefits had only small effects. All told, many people made up their minds long before vaccines were available.

The internet is awash with misinformation about the vaccines. But data distortion seems to have little effect on vaccine uptake. Well over a year ago, 35% told us they wouldn’t take the vaccine, and they have kept their word. The recent increase in vaccine uptake appears to be among people who initially said they would “wait and see.”

In politics, voters choose their loyalties early. After they do, expensive and exhausting campaigns affect few voters. Vaccine acceptance may similarly be determined by the groups we align with rather than evidence—or false information—about the vaccine itself."

The Government Should Stop Telling Facebook To Suppress COVID-19 'Misinformation'

White House Press Secretary Jen Psaki wants the social media site to ban 12 specific anti-vaccine accounts

By Robby Soave of Reason.

"The federal government is stepping up its effort to purge the internet of COVID-19 "misinformation." On Thursday, White House Press Secretary Jen Psaki singled out a dozen specific anti-vaccine Facebook accounts and called on the platform to ban them.

"There's about 12 people who are producing 65 percent of vaccine misinformation on social media platforms," said Psaki. "All of them remain active on Facebook, despite some even being banned on other platforms, including ones that Facebook owns."

She was discussing a Department of Health and Human Services (HHS) report on "confronting health misinformation." It instructs social media platforms to redesign their algorithms so that false information about COVID-19 is deprioritized, to shield journalists and medical professionals from harassment, and even to address misinformation during livestreams, a task that the report admits is "difficult" given the streams' "temporary nature and use of audio and video."

"We all have the power and responsibility to confront health misinformation," tweeted Surgeon General Vivek Murthy. "That's why we included recommendations for individuals, educators, researchers, health professionals, tech companies, and more."

The federal government is not explicitly ordering tech platforms to take down content. These dictates are essentially strongly-worded suggestions. But you're forgiven if you think Psaki's summary of the report sounded like command.

"Facebook needs to move more quickly to remove harmful, violative posts," she said. "Posts that would be within their policy for removal often remain up for days, and that's too long. The information spreads too quickly."

Psaki was alluding to anti-vaccine content, though the report itself impugns "medical misinformation" more broadly. Of course, the government itself has spread plenty of "medical misinformation," from the early bad guidance on masks to White House coronavirus czar Anthony Fauci's deliberate misstatements about the herd immunity threshold. For months, government health officials treated the lab leak theory of COVID-19's origins as a wild conspiracy theory, and Facebook followed suit: It vigorously censored content that promoted the lab leak theory. That policy was not revised until June.

Efforts by the government and tech platforms to suppress misinformation have undeniably resulted sometimes in the suppression of information that is either factual, or could plausibly turn out to be factual. (This has been the case outside the realm of pandemic-related content as well.) New initiatives undertaken by the federal government that would encourage Facebook to be even more heavy-handed with potential misinformation should be met with skepticism: The track record is just not very encouraging.

The White House's targeting of Facebook should make critics a little sympathetic to Mark Zuckerberg's position. Prominent legislators from both political parties—as well as the current and former presidents—want to aggressively regulate his company if not break it apart entirely. Facebook's CEO must feel tremendous pressure to give federal health bureacrats exactly what they're asking for, or else.

Instead of defending the rights of private companies to set their own moderation policies independent of whatever the government would like them to do, Republicans are taking this opportunity to further erode Facebook's autonomy. Sen. Josh Hawley (R–Mo.) even suggested that the site's submission to the feds renders it an agent of the state.

"The social media platforms are increasingly just arms of the federal government and the Biden White House," Hawley tweeted. "Why should the #BigTech companies continue to be treated as private companies when they function as agencies of the federal government."

Hawley is essentially saying that a private company complying with the government becomes a state actor, and thus should be bound to the same restrictions as any other public agency. (Former President Donald Trump's doomed social media lawsuits rest on a version of this argument.) But Hawley and others are also attempting to punish these same private companies for not doing what the White House wants. (In Hawley's case, he wants Facebook to suppress fewer posts.) That's quite a Catch-22: Facebook is in trouble either way."

What Media-Merger Crisis?

By Brent Skorup & Joe Kane of the Mercatus Center at George Mason University.

"Federal regulators recently approved AT&T’s acquisition of DirecTV and Verizon’s purchase of AOL and are currently deciding whether to permit the merger of two cable companies, Time Warner Cable (TWC) and Charter Communications. Inevitably, media mergers breed techno-panic in some quarters with a consistency matched only by the failure of their predicted disaster scenarios to materialize. 

Regarding the TWC-Charter deal, there is a largely unchallenged narrative that cable companies have local monopolies and the ability and desire to harm television competition. That notion fails to recognize the changing realities of media. It is true that decades ago many cities, with the encouragement of the Federal Communications Commission, granted cable companies exclusive contracts to build because of beliefs that subscription TV service is a natural monopoly. Those beliefs were not merely ill-founded—the market, it turns out, can support TV competition—the gifting of cable monopolies resulted in ugly corruption in cities and towns across the country. As a result, those natural monopoly theories were put to rest in the 1990s when policymakers removed regulatory barriers in order to make television provision more competitive. 

Those deregulatory actions of Congress and the FCC are starting to bear fruit for consumers because TV watchers increasingly have several alternatives to traditional cable television. The increased competition from the two national satellite TV companies and new TV services from “telephone” companies, like AT&T U-verse TV and Verizon FiOS TV, is intense. Cable companies have lost nearly 15 million subscribers since their peak number of subscribers in 2002. In 2004, over 70 percent of TV households had cable. Today, cable market share approaches 50 percent.

These numbers don’t even include all available TV options. Omitted from these measurements are households that subscribe only to online video, like Netflix or Amazon Instant, and those that supplement their online viewing with free broadcast television. These are harder to measure but a recent survey from the Leichtman Research Group suggests that 5 to 10 percent of U.S. households fall into this category. 

Market power in TV, clearly, has never been more precarious. The rise of competing providers in the past decade has coincided with falling TV production costs because digital technology makes cameras and editing much cheaper. The result is a seller’s market where content is king. It is impossible to stay caught up on all the quality programming that exists and hundreds of articles have been written about the Golden Age of Television we’re in. 

Economist Joseph Schumpeter wrote in the 1940s of the “creative destruction” of markets. Though Schumpeter’s description derives from Marxist theory, free market proponents have adopted it to describe the (sometimes messy) way that markets drive progress. Any industry touching technology, and includes TV and Internet providers, cannot be complacent. Disruption lurks with every passing year—so cable, telecommunications, and satellite companies spend billions every year upgrading broadband and TV infrastructure and acquiring content. 

The optimism many viewers have about the direction of media, communications, and entertainment is not shared by everyone. Fortunately, the doomsayers’ predictions typically do not age well. Look back, for instance, on the heated commentary surrounding contentious mergers like AOL-Time Warner, Sirius-XM, Sprint-Nextel, NewsCorp.-DirecTV, and Comcast-NBCU. Some of these deals worked out for the merging firms but some of these were disasters, not for consumers, but for their shareholders. Consumer habits are unpredictable and competition, like that from Netflix, iPhones, Pandora, Google Fiber, often comes from unexpected places. 

This news—there is no crisis in media that needs fixing—should come as a comfort to regulators. Instead of meddling with business plans and applying dated rules to new entrants, regulators should focus on removing entry barriers and making regulations consistent across industry."