The costs of media bias
A majority of Americans view news organizations as politically biased, creating a strong incentive for firms to try to present themselves as impartial. This paper argues that the desire to appear unbiased leads to information loss. In the formal model, firms withhold information in an effort to appear neutral. It is shown that information loss is exacerbated by competition, policies that regulate content are welfare reducing, and that regulating the size of the market can increase the amount of information revealed. Finally, the introduction of imperfectly informed sources of news, such as blogs, can decrease the incentives for traditional news outlets to provide information, yet they may also enhance welfare when information is being suppressed.
That’s from Jeremy Burke of Duke, who is on the job market this year. Paul Krugman often makes this complaint, namely that newspapers often prefer a "He said, he said" story over simply telling the truth. One message of this paper is that the problem isn’t so easy to stop. Newspapers aren’t just being lax, rather they are maximizing their profits and reputation. The discussion of blogs starts on p.22 of the paper; it is basically pro-blog but the ability of the blogosphere to speak truth can substitute for the requirement that newspapers do so, rather than forcing newspapers into truth.