The Importance of Online News

Reading Deepak Shenoy’s excellent article on insurance this afternoon the first thing I wondered was about why I had never read anything like it before. It was so intuitive and insightful, and so obvious, yet I didn’t recall reading anything like it elsewhere in the “mainstream media” (quotes because that implicitly implies Yahoo! is not mainstream). And then I started thinking about Ajay Shah’s brilliant blog post about the undersupply of criticism.

Ajay mentions in his article that most articles on China (which need cooperation from sources in the Chinese government for information) tend to be favourable to the country, since no one wants to risk cutting off the supply of information (or worse) by antagonizing the Chinese government. A similar relationship, either implicitly or explicitly, is enjoyed between media and advertisers.

A quick glance through any business newspaper, or even a mainstream broadsheet, would tell you that financial institutions (this includes banks, asset management companies, insurers and brokerages) are heavy advertisers in these media. Given the amount of money papers make from these sources, it doesn’t make much business sense for them to publish opinion pieces that are critical of these heavy advertisers. There are papers (especially some broadsheets) that claim to enforce neutrality and fairness in their reporting, but even there it is hard to come across articles that are highly critical advertisers. The potential loss in revenue is too big a risk to take.

The biggest advantage of new media is that it provides alternate channels which depend on alternate sources of revenue. Think about the number of times you’ve seen banks or insurance companies advertising in the Yahoo! sidebar, and then compare that against the number of times you’ve seen such advertisements in newsprint. Similarly, there will be companies who are heavy advertisers online, but not so in broadsheets so you will find the latter to be more willing to be critical of them.

From the reader’s perspective it is important to get news and opinion not only from several sources, but also from several kinds of sources in order to get a balanced view.

The Problem with Amit Varma

Ok, at the outset I must admit that the title is misleading. There is no problem with Amit Varma. He is an excellent fellow, and great fun to hang out with. What I have been having a problem with is his blog, the ever-so-popular India Uncut. I’ve been reading it regularly for over two years, and now suddenly there seems to be something stale about it.

Amit’s method of writing is what I call¬† as “reinforcement writing”. Other proponents of this style include Ajay Shah and Percy Mistry, and several commies whose writing I don’t care to read. The thing with these people is that they have one basic idea. And 60%¬† (ok i made up that number) of all their essays talk about this one idea. The rest 40% (made up, once again) is used to present the same idea in a different context, or to paint it using a different colour. Maybe their hope is that when people read about the same idea several times, they will get convinced and buy the idea. The concept here is that every time people read about this idea, they would have forgotten that the last time they heard about this was from the same source, and their belief in this idea gets reinforced.

Amit’s chosen idea is one of liberty. Like classic libertarians define themselves – “free markets and free minds”. Go through all of Amit’s serious essays (basically discounting his essays on cows), and you will find this to be the unifying thread. Go back, and look at all the Thursday editions of Mint between Feb07 and Feb08. I haven’t kept count, but my sense is that at least 40 of those 50 odd columns had liberty as its underlying theme.

It may be the case that his mandate in that column was to write about liberty, but this concept has now become big in his normal blogging also, and maybe in all his thoughts. A few weeks ago, I wrote to a mailing list that Amit and I are both part of saying that I was planning to write an Economic Travelogue. And Amit’s quick suggestion was that I should write it from a liberty and freedom point of view.

The reason I’m writing this essay is that as a regualr and loyal reader of Amit’s blog, I feel cheated. I feel cheated that he isn’t adding much value by way of his posts. I’m not cribbing about the volume here, since I know that he is busy trying to get a novel published and doesn’t have much time to blog. I’m not cribbing about the quality of writing here – as always, it is excellent. What I am cribbing about is the content. That – for a regular reader – the marginal value of each of his posts is infinitesimal. And the danger is that the marginal value of looking at his posts might soon turn negative, which will result in my unsubscribing from his blog.

I know that Amit is really good about writing about liberty. He even won a Bastiat for that. However, he needs to realize that most of his audience is “repeat audience”. His essays might make a big impact for a new reader, but they do little to please existing ones. This is like a business that spends so much of its energy in acquiring new customers that it ends up pissing off the existing customers. Such a business model is never going to be sustainable.