I have just read Flat Earth News, by Nick Davies.
It's an excellent account of the forces distorting the news as reported by mainstream newspapers and television. He covers the ideological biases of owners and journalists, and the needs of both owners and journalists to ingratiate themselves with the politically powerful. However, the biggest distortion of all is the fact that finding out the truth takes time and resources, while printing whatever lands in your inbox is quick and cheap. Under commercial pressures, even the most respectable media sources rely heavily on wire services and press releases, while the wire services themselves mostly pass on the news that is given to them.
What is frustrating about the book is that Davies doesn't look at the demand side. His thesis is that prior to the 1980s, newspapers and journalists sought out stories and checked them, out of professional pride, and that that diligence was squeezed out of the system under commercial competitive pressure from the 1980s onwards. He seems to assume that the media could have got away with that "churnalism" at any time, but chose in the good old days to assume higher standards.
What I wonder is whether there used to be pressure from customers to do proper journalism, and only in the last 20-30 years has it become profitable to print junk instead, due to changes in the audience. Basically, I would like to answer the following questions:
Do readers care whether what they read is true?
Do they believe that what they read is true?
My guess, and it's just a guess, is that journalism was originally targeted at a market of people who really wanted the truth, though it may have supplied other people as a by-product. Today the people who need the truth have other ways of getting it, and the key newspaper audience simply doesn't care whether the stories they read are true or not.
Another theory would be that a textbook Market for Lemons has developed - readers want the truth, and know that they're not getting it, but they don't have any way of getting it. A newspaper that spent more money to do proper journalism would cost more, but the consumer wouldn't be able to tell that it was really any better, and so the expensive option would lose in the marketplace. I don't think this is likely, because I think it would be fairly straightforward to establish a reputation for avoiding the kinds of bad journalism that Davies describes.
A third theory is that proper journalism has suffered from Baumol's cost disease, and become too expensive. The early-20th century journalist came from the literate lower-middle class, and provided human judgement at low cost. Human judgement has become the critical component in the modern economy, and a journalist's time is now too expensive for him to be sent around the country sniffing for interesting stories.
Nick Davies is a leftist, but I don't think the book suffers from that. He tries hard to be fair, and his bias comes through mostly in his examples - it is much easier to spot abuses by one's political opponents. However, one of the key results of the process he describes is that when there is controversy, both sides will manipulate the media in the ways that have become so easy, and so the reader of his book can easily spot the examples on the other side that he has missed. His argument includes the fact that the ideological bias of media owners, while still significant, is milder than in earlier eras.