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July 30, 2018, 12:35 p.m.
Business Models

“Known but not discussed”: Low-income people aren’t getting quality news and information. What can the industry do about it?

“There is no Wirecutter for low-income individuals.” Fiona Morgan and Jay Hamilton talk about their research into information ecosystems and the media market.

The search engine results that a woman who has served time in jail and is from a low-income community will see, while hunting for jobs, will be vastly different than those found by a graduating college senior who is on LinkedIn.

While the senior might get reputable, actual jobs, the woman encounters predatory job “application” sites that sell her data to for-profit schools and other organizations trying to take advantage of her. That sad example is a byproduct of our market and information setup. “It all goes back to: The information created depends on the value I get from changing your mind,” said Jay Hamilton, the head of Stanford’s journalism program, an economist, and author of All the News That’s Fit to Sell, among other titles.

The woman in this situation is real — Fiona Morgan met her at a community computer lab in Chicago. Morgan, a consultant on information ecosystems and the former director of Free Press’s community organizing News Voices program, and Hamilton studied the information systems and media models surrounding low-income communities and recently published their findings in the International Journal of Communication.

“It’s important to think about the information environment that would help her succeed — and what is the information environment that she’s actually in, and who’s profiting from that,” Morgan said.

I spoke with Morgan and Hamilton about their research and how it applies to our changing media industry. We got into the weeds of the journalism market, but they also shared examples of media organizations that are excelling at involving and providing low-income individuals with useful information, what role nonprofit newsrooms play in today’s environment, and how journalists could work with partners outside of the industry (barbershops?) to report and share information.

Here’s their article, and here are the chats Josh Benton did with Hamilton in the early days of Nieman Lab about All the News That’s Fit to Sell (if you really want a trip down memory lane). Finally, here is our conversation, which has been edited and condensed for clarity:

Christine Schmidt: You’re each coming from a different perspective. What interested you about addressing this topic, and why now? It’s not something particularly new to the journalism industry, right?

Fiona Morgan: Jay and I have been working on this topic for several years, researching the information needs of low-income communities and the information lives of people who are lower income. It’s a known but not discussed issue for journalists, that you know there are always stories that aren’t getting told. Also known but not discussed is that certain audiences get more news about their community than other communities do. That is only getting worse as the capacity of news organizations constricts and we see more layoffs; we see more attention to luxury products and stuff that’s easier and cheaper to produce, like crime coverage. It’s harder to put the resources into doing really good storytelling that really gets at the people that are most in need and most affected by problems.

What I love about Jay’s approach as an economist is that he is looking really systematically at why this happens and the economic forces underlying it. What really got started for me was reading his book All the News That’s Fit to Sell. He put out this framework for thinking about the different kinds of demands for information. Jay, you can correct me if I get this wrong, but there are four different kinds of information:

  • There’s entertainment demand, stuff that’s fun and entertaining;
  • Then there’s producer-demand, so stuff you need to know for your job; so Nieman Lab, for instance, I need to keep up with to be aware of what’s going on in journalism. If I were a welder, I would need to know about welding things and training and jobs.
  • And third, there’s consumer demand: I might want to buy another phone, what should I get? There’s a lot of consumer info out there.
  • Then there’s voter demand and info, which is how I make demands as a voter and a citizen. In my mind, that’s also sort of broadly about civic information. How do I know what I need to know to be a civically minded person and have a positive impact on my democracy?

And so in All the News That’s Fit to Sell, Jay talks about how this market turns information into news, what news gets produced and why, and why some audiences are more valuable than others. In this research we’ve done together on poor information, we’re looking at the market failure of civic and voter demand in general. If I want producer information, I’m willing to pay for it because, by paying for it, I’m able to earn more money. If you’re producing more information that is having an impact broadly on society, it’s having all these spillover benefits by helping keep people safe and keeping an eye on local officials so they’re not robbing the public coffers. The benefits of that are dispersed over people who may not even know about the story, but they still benefit. It makes it hard for those producing the news to ever get the investment they put into financing what it took to report that story. I’m going to let Jay explain the rest — I’m explaining the economics while there’s an economist here sitting in.

Jay Hamilton: Fiona is right on point. For me, I got interested in this when I was in the convenience store in a low-income area and buying a soda. At the checkout counter there was a newspaper called The Slammer that printed the mugshots of people who had been arrested in Durham County, North Carolina. I started to look through it and there was advertising for bail bondsmen, advertising for a book on how to play the lottery that took advantage of people’s misperceptions of what the lottery does. I began to think about what the information lives would be like for people in that community.

Fiona did a great job describing the four information demands people have. We have those demands in our lives as entertainers, workers, consumers, or voters, but if you think about why your needs get served — why somebody would supply you with information — there are really five incentives:

  • One is subscription, paying them to provide you with that information.
  • One is advertising, selling your attention to somebody else.
  • One is I want your vote and that’s partisan.
  • One is nonprofit, I want to change how you think about the world, and
  • One is I just like to talk and that’s expression.

If you think about each of those, they’re biased against the information needs of low-income individuals. Low-income people have less to spend on subscriptions, so they spend less, according to government data on news and information. They’re less likely, for many products, to be the marginal consumer — the person whose mind you’re trying to sway. They’re less likely to vote and there’s evidence we cite in the paper — that means people rationally don’t target them with political information, if they’re not going to turn out to vote or are a lower priority. They have lower subscriptions to broadband. When you’re looking at all the free content on the web created by social media and expression, their voices are less likely to be heard. There’s a bias in terms of the incentive to create content for them. That was one of the key points of our work.

People talk about a digital divide in terms of technology, but it’s also there in terms of the content. We discovered [low-income people] are the target consumers for some products like payday lending, mortgages, for-profit online education. Sometimes that means people will create deceptive information targeted at them, like the woman at the community center in Chicago.

Schmidt: I really liked what you said, Fiona, about how it’s a conversation everyone knows about but nobody is really talking about, the fact that the news organizations don’t often serve low-income information needs. Considering your work with News Voices and Jay’s work as an economist in this area, how do you both see the changes and structures of the business models and missions of news organizations affecting this?

Morgan: We’re seeing more consolidation [of newspapers], which is making a lot of these problems worse. Simultaneously there is a rise in nonprofit news, experimenting with all kinds of models. There are people doing exciting projects that are grant-funded, but thinking about it structurally. What’s going to have to happen, in order for this to work, is that people start to see journalism as a fundamental core necessity for society. Or they’ll have to pay directly for information, but then the question becomes, how does this work for people who don’t have much money?

The Slammer newspaper, which just is mugshots, is not a free paper. It’s $1. The poorest people are willing to pay cash money for something that, for whatever reason, has value to them. Jay and I have both talked to people at the convenience store about why they look at it, and some folks say, “I haven’t seen my friend in a while and I wanted to know what happened to him. I wanted to know if he got picked up.” Which is so sad!

But there are also a lot of people experimenting with cooperative models — employee-owned, but also consumer cooperative. I think that, in the same way we give money to community initiatives of all kind, we can start to see journalism that actually serves directly to people, instead of journalism that serves advertisers who may or may not be interested in low-income people. That’s a hopeful direction.

Hamilton: One way I think about this is that newspapers used to offer a bundle of information, things that helped you in your life as a consumer or a worker. Today there’s a lot of focus, understandably, on people with high incomes and high education. But there is no Wirecutter of low-income individuals. Wirecutter is great because it contributes money to The New York Times and so The New York Times tells stories that hold national and international institutions accountable, but Wirecutter earns money through people clicking through and buying the products. If you look at consumer lives of low-income individuals, some of the most hopeful things I see are that government agencies and nonprofits focused on serving the poor are starting to think about how to use information in a targeted way.

Fiona and I are hopeful about three things: bundling, behavioral economics, and big data — although there should be an asterisk by big data in which we say maybe “moderate data,” but that’s not alliterative. With behavioral econ, there’s a design firm, Civilla, that just helped the state of Michigan redesign its forms using design thinking and behavioral econ ideas that basically simplify the red tape that gets you through to the benefits. In terms of bundling, people have been experimenting with bringing together two or three information demands in one physical location. So if you want to reach low-income communities with health screenings, do that through barbershops or salons or churches. Since the 1990s, we’ve seen that if you want people to register to vote, do it when they’re getting a license. There’s a great group called Benefit Bank that helps you get multiple services, SNAP [food stamps] etc., all in one sitting. The newspaper used to incorporate that idea of bundling, but now you have to replicate it in physical locations or, with Benefit Bank, online.

Behavioral econ is figuring out how people make decisions. And with big data, Sarah Alvarez’s Outlier Media is a really interesting experiment of trying to figure out how to get the info to low-income people when they’re deciding to rent a place, finding out what taxes or utility bills might be associated with that. We also talk about in our article about the expanding college opportunity program, which basically gets high-scoring students in low-income families, sends them information and vouchers that allow them to apply to more schools, and actually gives them info about what the net cost of attending college would be.

All of those things — bundling, behavioral econ, and big data — basically take people’s circumstances as a given and try to get them the information that will help them make better decisions, from the perspective of their own lives.

Morgan: We know that low-income people are less likely to use the internet and they’re less likely to have a computer at home. But just about everyone has a cell phone now and text messaging is one of the most accessible ways to reach people, like Sarah does with Outlier Media using GroundSource. A lot of the engagement work that I’ve been involved in with the engagement community is work to meet people where they are, having forums and using posters and flyers to reach people. They’re being really creative about where people are, how do they already get information, and figuring out what they need by talking to them. They’re taking this advertising-funded mediator out of the middle and really thinking about how to serve people directly.

Schmidt: You mention nonprofits a bit in your paper:

The nonprofit incentive to change how an individual thinks about the world, however, does lead to direct targeting of information toward people with low incomes….Changing the choices of low-income individuals becomes part of the public goods nonprofits seek to provide.

I’m assuming you weren’t referring to nonprofit newsrooms there, but does the growth of nonprofit newsrooms tie in with your research?

Morgan: In the paper, we were thinking of nonprofits really broadly. Of course, there’s a very specific slice of the Venn diagram overlap between nonprofit organizations and newsrooms. What I see as being really hopeful is that there are a lot of nonprofit newsrooms trying to do things differently. They don’t think about a news product that is familiar. They’re thinking about how to reach out of the community, like City Bureau. They’re trying to reach specific neighborhoods in Chicago that they think aren’t getting covered enough. They’re reaching out to people who already live in the community and have the social network of people they know, already navigating the systems of what the issues are and what it takes to live there. They’re bringing that knowledge to the journalism.

At the same time, there’s an education piece of helping nonprofits understand what journalists do. As Jay said, the nonprofits that know they want to reach this targeted population, know these are the problems they want to solve and the knots they want to untie, realize that journalism is not just useful but essential to doing that. The trick, for the journalism piece, is how to set up the level of independence and transparency you need to be effective.

With News Voices, I’ve been reaching out to organizations and individuals who aren’t journalists and aren’t going to be, but they can be really thoughtful about contributing to the ecosystem of information in their community. If you’re a nonprofit putting out research, you’re actually kind of a news source for people. We’re thinking about the role that information plays in all nonprofit work, and realizing that journalism is an essential part of what that communication needs to look like. The market’s not going to pay for it.

Schmidt: I also wanted to ask about how the shrinkage of the local news sector plays into this. You mention news deserts in the paper, but do you think local news outlets are more likely to provide the kind of information that low-income individuals need?

Hamilton: It’s that combination of geography — low-income people tend to live in areas with lower overall median income — and fixed cost. It takes money to tell an original story. Think about the radius of a story being the number of people it affects and the value of eyeballs, either as subscribers or as targets of advertisers. Poor communities have fewer people willing to pay for the info or be targeted by advertisers. That means stories about their institutions are more likely to go untold. That means there are not people holding the institutions accountable there.

Morgan: The LA Times broke the story about the Bell city officials paying themselves exorbitant salaries and refusing to turn over public records about what those salaries were. The reporting the LA Times did was terrific, but it wouldn’t have been necessary if there had been a reporter covering Bell on a regular basis and showing up to city council meetings. But the LA Times, like a lot of metro papers, pulled back its coverage of the metro and had to make some hard decisions about which communities it was going to cover. Bell is one of the poorest communities in LA County and majority Latino. I went out and talked to some citizens who had been trying to get the attention of the papers. I think it was partly due to their agitation that it did get the attention of the newspaper, and also their agitation once the stories came out that made those stories have an impact. As every reporter who has done accountability reporting knows, you can write whatever, but if people don’t respond then nothing happens. The impact has to be a matter of public response.

The asset in Bell was curious, engaged people who really cared about their community. Once the information was out there, they spread it and kept the pressure up. In places where [citizens] are used to not having news coverage or don’t have the kind of civic engagement that Bell had, it’s worse, because they don’t know they can ask for the records, or once the information comes out, there’s no infrastructure to fight for it.

Hamilton: There’s some really interesting research that shows that once there are enough Latinos in a market that a Spanish-language local TV station starts broadcasting, voting among Latinos goes up by five to 10 percentage points. Once the community stories are told on TV in Spanish, more people turn out to vote in elections.

Morgan: It’s really important for journalists to think about the impact of their work. How does the work they do interact with the people they’re serving? I’m loving the work people are doing with the Trusting News project and all the folks trying to help journalists articulate the work they do. Kyle Pope wrote for Columbia Journalism Review about how we have to stop making it a story about journalists — about poor us, losing our jobs — and we have to start making it about what we are going to lose when we lose the reporting. What is the effect going to be on the local communities?

Schmidt Where do you think news and information for lower-income individuals could go in the future?

MORGAN There are a lot of really exciting projects out there, like Outlier Media and City Bureau. There’s a project called Media Seeds in Ohio where Michelle Ferrier is doing a lot of engagement and design thinking work to try to prototype the kind of information that would best serve rural communities in southeastern Ohio.

I think funders are beginning to think more about funding journalism and news and information; hopefully, they will start to see the value in this. And it’s always exciting to see people experimenting with engagement. That’s the world I’ve been in for the past three years. That’s a good way to communicate with the public about what they need, what really serves them, and how they’re willing to participate to make it happen — whether that means financial contributions, time, or some other kind of participation.

Hamilton: If you go back to the five incentives — subscription, advertising, nonprofit, partisan, and expression — what we’re really seeing, with the collapse of local news markets, is a collapse of advertising revenue in local news. In some larger national markets you see more dependence on subscription, like with The New York Times. I’m optimistic that we’re seeing re-weighting of the incentives away from advertising. If you think about the examples we talked about with bundling, behavioral econ, and big data, what government and nonprofits are trying to do is figure out how to reach people with low incomes with information when they’re making decisions. That’s not journalism, but it is supporting the function of journalism, if you think about journalism as providing you with information to help you with your job or about your life as a consumer or to divert you, to help you make a voting decision.

This re-weighting of incentive means we’re seeing a lot of experimentation by nonprofits, some by government agencies, and one that we haven’t talked about yet: If you look at the 2018 elections, there are people who have focused a lot on turnout. That’s driving them to think about how to go through the distribution of income in the U.S. and reach out to people who haven’t been participating. It’s driven by politics, but it’s a hopeful way to get more people participating. It’s not subscribing to a newspaper, but ultimately, if you care about newspapers as an instrumental good and as an input into a functioning democracy, then seeing political groups trying to get people engaged in discussion is also a hopeful sign.

Image of a payday loan storefront in Virginia by Taber Andrew Bain used under a Creative Commons license.

POSTED     July 30, 2018, 12:35 p.m.
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