The internet is where industries are made, broken and remade again. Thanks to the world wide web, nearly everything – shopping, learning, advertising, travel, communication – has been reimagined by businesses to offer unfettered consumer choice. Nowhere is this truer, and perhaps more consequential, than in news media.

Over the last decade, the battle for readers among publishers has taken a surprising turn, according to a new working research paper co-led by assistant professor of strategic management at the Rotman School of Management, Dror Shvadron. The paper, co-authored by Duke University professors Aaron Chatterji, Sharique Hasan and William Miles, shows that, in an effort to compete amid online disruption, legacy news organizations (i.e. The Washington Post and Wall Street Journal) have increasingly adopted the opinion-based content approach pioneered by their digital-native rivals (i.e. Vox and Breitbart).

The researchers analyzed five million politically centred news articles published by approximately 2,000 U.S.-based companies between 2014 and 2021. They found that legacy media are producing more opinion-based articles now than ever before.

But why are new entrants prioritizing opinion over fact in the first place? According to Shvadron, the answer lies in economics. The cost to develop and distribute factual content is incredibly high, up to $300,000 for a single six-month investigative piece. And before the internet, “traditional news organizations had to sell printed newspapers to as large an audience as possible to be profitable. They also had to accommodate everyone's taste, which limited their ability to cover news that's maybe more contentious or more niche,” says Shvadron. “But as distribution costs went down, new entrant firms innovated by producing opinionated news that doesn’t have to address audiences at scale and can still be profitable.” The result is that traditional legacy media – much like their younger competitors – have embraced the trend towards opinion, potentially at the expense of investigative and fact-based news reporting.

This isn’t a challenge unique to news media. In this age of digital flux, the need for legacy firms to adapt is pervasive, and it hits all corners of the business world. For example, Google is currently facing its own existential challenge thanks to new tech, which has also led it to mimic newer entrant strategies. Just as the internet lowered barriers to entry for news media startups, generative AI platforms are lowering barriers to information access, potentially reducing Google’s search engine dominance.

“Economic models of incumbent response can go both ways,” says Shvadron. “Some incumbents might actually double down on what they're doing well and differentiate their product from newer entrants – like the New York Times, where they keep doing big investigative stories and charge people for access.”

However, legacy firms that opt to follow the trend may inadvertently impact society, and in turn, their business. "Entrepreneurship and innovation usually bring new product varieties and reduce costs. But it also brings potentially negative impacts,” says Shvadron, pointing to the potential erosion of fact-based journalism. This decline could lead to a situation where there are fewer resources for in-depth reporting – which is essential for an informed public – and can lead to further polarization.

In fact, the researchers’ analysis of Tweets that were posted in response to opinion-based articles revealed a troubling pattern: Opinionated news articles are strongly associated with more negative emotions, and even less joy. “I wouldn't put causal interpretation on this, but we do see a correlation that indicates that articles that are more opinionated are associated with Tweets that tend to express more anger and hate speech,” says Shvadron, pointing to the news industry’s sustained ability to shape public discourse, for better or worse.

So, is chasing the opinion trend worth it? While more opinionated content may generate social media buzz, Shvadron’s research reveals one crucial disconnect: It doesn’t necessarily translate into increased website traffic, the lifeblood of news’ advertising revenue. In addition to questioning the long-term viability of opinion-driven content, the research also poses a cautionary tale for any business – social media engagement doesn’t always translate to business wins.

“We need to think about whether it's still possible to profit from producing facts,” he says. “If investigative journalism is no longer profitable, then who's going to produce the facts that are then fed into opinion pieces? We are, I think, in a situation where we need to ask, how can deep journalism be produced moving forward?”

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