Today's New York Times examines how Fox News and MSNBC seem to be covering two separate universes. How did we come to this? The answer turns out to be fairly simple: Do the math.

Economists have a common model that explains it all. Like all models, it's an oversimplification, but it's easy to follow. Instead of politics, let's think about ice cream stands and a beach.

The beach is a mile wide and about 50 feet deep. Sunbathers are scattered all along the beach. You're an entrepreneur. You want to open an ice cream stand. Where do you put it?

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That's easy. You put it right in the middle. Why? Because walking across hot sand hurts your bare feet. This represents a cost, and a deterrent. You want your ice cream stand to be the most convenient for the greatest number of customers.

Congratulations. You're now a mass retailer.

But suppose somebody is already there. Where do you put your stand? Do the math. If you put it halfway to the left, you'll get (theoretically) 100% of 25% of the sunbathers and 50% of another 25%. You'll get 0% of the 50% on the right. So you'll wind up with 25% + 12.5% = 37.5% of the total customers.

On the other hand, if you put your ice cream stand *right next to the first stand*, the math changes. All other things being equal, you'll get 50% of everybody on the left, and 50% of everybody on the right. You'll split the entire market. Since 50% > 37.5%, the smart play is to be right in the middle.

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So here we have two retailers and you'd be hard-pressed to tell them apart. Coke/Pepsi, Macy's/Gimbels, Ford/Chevy, et cetera.

When you introduce a third player, everything changes. Where's the smart location? If you line up with the existing shops, each gets 33.3% of the customers. But if you veer off to the left or the right, and plop down your stand at the halfway mark, what do you get? Everybody to the far side (25% of the total) and half of those toward the center. We already did that math. It's 37.5%, which is greater than 33 percent.

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(The "sweet spot" actually might be a little bit closer to the middle. Think about it, and think about your assumptions. Why would someone walk past your stand?)

The point is that when you have three or more options, suddenly it makes rational economic sense to go after a niche. In this example it's a geographic niche, but the "distance" might represent anything.

In political news coverage, there's a "cost" involved with listening to coverage that rubs you the wrong way. So it turns out that Rupert Murdoch's establishment of Fox News wasn't *merely* a case of a right-winger trying to bend the public discourse to his will. It also was a smart economic move.

And over the last few years, after many false starts and crazy detours (anybody remember Michael Savage?), MSNBC has simply found better numbers at the other end of the beach.

The real world is a lot more complicated than this simple model, of course. We have a lot more information sources than just Fox, CNN and the "legacy" networks, and MSNBC. Our beach is cluttered with all sorts of wandering hot dog stands and beer vendors.

Human behavior is often not rational. And journalistic decisionmaking is often actively at odds with economic advantage. Most journalists actually want to be "fair and balanced," and not just use that phrase as an ironic marketing slogan.

But the spatial model is a useful tool to understand the economic forces that are at work in our news coverage.

All of this is explained in Jay Hamilton's All the News That's Fit to Sell, which I've recommended on several occasions.

## Comments

## Math

## You're missing the cost of distance

all other things being equal,C will get 50% and the other half will be split between A and B.## The beach