Big Tech is Like the Penny Press

The business model in which content is provided free to audiences while advertisers pay to reach them did not begin with social media. It predates the web and television alike, beginning with newspapers in the 1830s and refined through a century of radio and broadcast television. The technology changed but the logic did not: the audience is not the customer but the product, and the content is the mechanism for assembling and sorting that audience.

The penny press emerged in New York in the 1830s when publishers like Benjamin Day realized that a newspaper priced at one cent could not sustain itself through subscription revenue but could attract large enough readership to sell advertising at rates that more than covered costs. The New York Sun and its imitators were not selling information to readers; they were selling readers to advertisers. Sensational crime reporting, gossip, and human-interest stories were not editorial lapses: they built the audience that made the advertising worth buying. Every subsequent development in advertiser-funded media follows from this original structure.

The competition between William Randolph Hearst’s New York Journal and Joseph Pulitzer’s New York World in the 1890s shows what this model produces when two well-funded publishers compete intensely for circulation. Neither set out to destabilize democratic discourse; they just wanted to sell newspapers. However, the market provided a clear signal: crime, scandal, nationalist outrage, and stories written to produce emotional responses drove circulation, and each escalation by one paper forced a matching response from the other. Journalism that was inaccurate and inflammatory was not the result of a conspiracy. It was the predictable output of two rational businesses responding to the same incentive structure.

The technology of the 1880s and 1890s made competitive sensationalism viable at unprecedented scale. Cheap wood-pulp paper cut newsprint costs, high-speed rotary presses printed hundreds of thousands of copies in hours, the telegraph delivered distant events fast enough to report them the same day, and halftone reproduction allowed photographs to appear (including composites of scenes that had not occurred). Technology amplified the financial return on emotional content; today’s algorithmic amplification serves the same end.

American radio in the 1920s rejected the British model of public funding through license fees and chose instead to give programming away for free while charging sponsors for access to the listeners it assembled. Television extended this with the Nielsen ratings, which for the first time created a large-scale apparatus for measuring and commodifying attention in near-real time. A show with high ratings commanded higher advertising rates regardless of its artistic merit or civic value, and sensationalism drove ratings.

The propaganda model describes how how this system shapes content without requiring deliberate censorship. Advertisers do not need to call editors and demand favorable coverage; they simply withdraw revenue from outlets that publish content they dislike, and editors learn what is acceptable without being told.

Interactive media doesn’t change any of this logic, but it does make it more precise. Behavioral data collected through social media, search engines, and app ecosystems allows advertisers to target individuals rather than demographic categories. Real-time optimization means the system continuously adjusts what content it promotes based on which content produces the engagement signals that keep users present and generating data. The newspaper editor who decided to run a crime story on the front page was making an educated guess about what would sell copies. The recommendation algorithm knows far more precisely what content will hold each specific user’s attention for the next few minutes.

Engagement maximization and social harm are not separable because the content that maximizes engagement is not randomly distributed. Research consistently shows that outrage, fear, and social comparison generate stronger and more persistent engagement signals than accurate information, considered analysis, or content that simply satisfies a question and lets the user close the tab. Big tech companies that depend on advertising revenue will therefore always amplify inflammatory distortion over mere facts.

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David Nasaw: The Chief: The Life of William Randolph Hearst. Houghton Mifflin, 2000, 978-0618154463.

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