Taibbi is discussing the downfall of journalism in a simple practical way. When CNN decided to run 24-hour news, quality switched to quantity. Definitely true.
But Taibbi started in the industry after the Fairness Doctrine was already gone. Revoking the Doctrine opened the way to transform news into soap opera, and the increased quantity of a fake product followed directly.
Start with one basic fact: Reality can’t be monetized because everyone can acquire reality by opening their eyes and ears and noses. Broadcasters figured this out early in the game, and initially refused to bother with news. They wanted to run only entertainment and sports because the audience wanted to hear only entertainment and sports.
FCC enforced constraints in TWO DIRECTIONS. Stations had to devote a certain percentage of their day to news and public service, AND the news had to be objective and non-partisan. Non-partisan reduced the value even farther, so they minimized and condensed news as tightly as they could within the law. Fifteen minutes in the evening, plus brief bulletins on the hour.
After BOTH constraints were removed, broadcasters could go in both directions. Many radio stations simply skipped news entirely. CNN/FOX substituted soap opera in the jars labeled “News”, creating a profitable but fraudulent product that fooled many viewers.