Populations in several countries have become decidedly more polarized in recent decades. Many believe that social media, which facilitates interactions within echo chambers, is partly to blame. These interactions can trigger two distinct effects on the demand for biased news. First, individuals can be influenced by their peers' news consumption, for example, because they value keeping a news diet that is ideologically congruent with that of their peers. Second, individuals might purposefully skew their news consumption in anticipation that their peers will observe these choices. We design a field experiment on Twitter (renamed X in 2023) to separately identify the importance of both mechanisms. Our main result documents that, through these two mechanisms, online interactions with like-minded peers are not a major contributor to the demand for polarized news content. Our experiment induces variation in an individual's perceptions of the political leanings of their peers' news consumption and the visibility of their own news consumption to their social media followers. We track participants' sharing behavior and news consumption, proxied by the news outlets they follow. We find no evidence to support the first channel: our experimental variation influences respondents' beliefs about the news diets of their peers, but they do not respond by changing their own news diets. In contrast, we find that participants alter their news diet considerably when they believe their peers will observe these choices, as in the second channel. Interestingly, individuals primarily wish to present themselves as following a balanced set of news. Therefore, our paper uncovers one mechanism through which social media can attenuate the demand for polarizing content: as these platforms amplify the visibility of user interactions, which increases the importance of social image concerns, users adjust their news consumption to be more balanced.