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.

One thought on “The Importance of Online News”

  1. I think both your premises are wrong. There is quite a lot of FI advertising online for brokerages, NRI bank accounts, and insurance companies. Also, Mint at least has had personal finance columns that thulped ULIPs regularly and firmly.

    The issue is not so much advertisers but a content model where columns don’t exceed 600-750 words. That makes it difficult to do a comprehensive guide to insurance in a single piece.

    The advantages the online model give are: a) no word limits, b) interactivity (Deepak linked to his retirement calculator).

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