📑History and Principles of Journalism Unit 13 – Journalism Business: Ownership and Revenue

Key Concepts

• Journalism business models encompass the strategies and structures that enable news organizations to generate revenue and sustain their operations
• Ownership models in journalism include private ownership, public ownership, non-profit ownership, and cooperative ownership, each with distinct implications for editorial independence and financial stability
• Revenue streams for journalism businesses can include advertising, subscriptions, sponsorships, events, and philanthropic support, with varying degrees of reliance on each source
  • Advertising revenue involves selling space or time for promotional messages alongside journalistic content
  • Subscription revenue is generated through regular payments from readers or viewers in exchange for access to content
• Concentration of media ownership refers to the consolidation of control over multiple news outlets by a small number of individuals or corporations, raising concerns about diversity and pluralism in the media landscape
• Vertical integration in media ownership occurs when a single company controls multiple stages of the production and distribution process, such as a newspaper owning its own printing press and distribution network
• Horizontal integration in media ownership involves a company expanding its control over multiple outlets within the same stage of production, such as a media conglomerate owning multiple newspapers or television stations
• The digital transformation of the media industry has disrupted traditional business models and created new opportunities and challenges for journalism businesses, requiring adaptation and innovation to remain viable in the evolving landscape

Historical Context

• The early history of journalism in the United States was characterized by partisan newspapers aligned with political parties, with revenue primarily generated through political patronage and government printing contracts
• The rise of the penny press in the 1830s marked a shift towards mass-market journalism, with newspapers relying on advertising revenue and street sales to reach a broader audience
• The late 19th and early 20th centuries saw the emergence of powerful newspaper chains and media conglomerates, such as those owned by William Randolph Hearst and Joseph Pulitzer, which consolidated ownership and influenced public opinion
  • Yellow journalism, characterized by sensationalism and exaggeration, became prevalent during this period as a means of boosting circulation and revenue
• The advent of radio and television in the 20th century introduced new forms of journalism and advertising, challenging the dominance of newspapers and magazines
• The Telecommunications Act of 1996 deregulated media ownership in the United States, leading to increased consolidation and the formation of large media conglomerates
• The rise of the internet and digital media in the late 20th and early 21st centuries has transformed the journalism business, disrupting traditional revenue models and creating new opportunities for audience engagement and monetization
• The economic downturn of the late 2000s, coupled with the shift towards digital media consumption, led to a wave of layoffs, closures, and mergers in the journalism industry, highlighting the financial challenges faced by many news organizations

Ownership Models

• Private ownership is the most common model in the journalism business, with news organizations owned by individuals, families, or corporations
  • Privately-owned media companies can be more agile and responsive to market conditions but may be subject to the influence of their owners' personal or business interests
• Public ownership involves news organizations that are owned and operated by government entities or public institutions, such as the British Broadcasting Corporation (BBC) or National Public Radio (NPR) in the United States
  • Publicly-owned media outlets often have a mandate to serve the public interest and may be less reliant on advertising revenue, but they can be vulnerable to political interference or funding cuts
• Non-profit ownership has gained traction in recent years as a means of supporting journalism focused on public service and investigative reporting, with organizations relying on grants, donations, and memberships for funding
  • Examples of non-profit news organizations include ProPublica and the Texas Tribune
• Cooperative ownership models involve journalists or community members collectively owning and managing a news organization, prioritizing editorial independence and local engagement
  • The Banyan Project is an example of a cooperative ownership model in journalism
• Employee stock ownership plans (ESOPs) allow journalists and other staff members to hold shares in their news organization, aligning their interests with the long-term success of the company
• Foundation ownership has emerged as a means of providing stable funding for journalism, with news organizations operated as part of larger philanthropic foundations
  • The Philadelphia Inquirer is owned by the non-profit Lenfest Institute for Journalism, which was established to support local journalism in the Philadelphia area
• Hybrid ownership models combine elements of different ownership structures, such as a non-profit newsroom collaborating with a for-profit media company or a cooperative partnering with a foundation

Revenue Streams

• Advertising has traditionally been the primary source of revenue for many journalism businesses, with news organizations selling space or time for promotional messages alongside their content
  • Display advertising includes banner ads, sponsored content, and native advertising, which are designed to blend in with the surrounding editorial content
  • Classified advertising, once a significant revenue source for newspapers, has largely migrated to online platforms like Craigslist and job boards
• Subscriptions and paywalls have become increasingly important revenue streams for journalism businesses in the digital age, with readers paying for access to online content or print editions
  • Metered paywalls allow readers to access a limited number of articles for free before requiring a subscription, while hard paywalls restrict all content to paying subscribers
  • Membership models offer additional benefits and engagement opportunities to subscribers, such as exclusive content, events, or access to journalists
• Sponsorships and underwriting involve companies or organizations providing financial support for specific content or initiatives in exchange for brand exposure and association with the news organization
• Events, such as conferences, workshops, and live performances, can generate revenue through ticket sales, sponsorships, and merchandise sales while also engaging audiences and building brand loyalty
• Philanthropic support, including grants and donations from foundations, individuals, and crowdfunding campaigns, has become an important revenue source for non-profit and public service journalism
  • The Knight Foundation and the MacArthur Foundation are examples of philanthropic organizations that support journalism initiatives
• E-commerce and affiliate marketing allow news organizations to generate revenue by selling products or earning commissions on referrals to third-party retailers
• Syndication and licensing involve selling content to other news outlets or platforms, generating revenue from the wider distribution of journalism produced by the organization
• Data and analytics services can be offered to advertisers, researchers, or other clients, leveraging the news organization's expertise in collecting and analyzing information

Challenges and Trends

• The decline of traditional advertising revenue, particularly in print media, has put pressure on journalism businesses to find new sources of funding and adapt their business models
  • The rise of programmatic advertising and the dominance of tech platforms like Google and Facebook in the digital ad market have made it harder for news organizations to capture advertising revenue
• The shift towards digital media consumption has required journalism businesses to invest in new technologies, platforms, and skills to remain relevant and engaging to audiences
  • Mobile-first strategies prioritize the development of content and user experiences optimized for smartphones and tablets, as mobile devices become the primary means of accessing news for many people
• The proliferation of free content online has made it challenging for journalism businesses to convince readers to pay for subscriptions or memberships, requiring a focus on unique value propositions and exclusive content
• The spread of misinformation and disinformation online has undermined public trust in journalism, requiring news organizations to prioritize transparency, accountability, and fact-checking to maintain credibility
• The concentration of media ownership and the influence of corporate interests have raised concerns about the independence and diversity of journalism, leading to calls for greater regulation and support for local and independent media
• The COVID-19 pandemic has accelerated the financial challenges faced by many journalism businesses, with declines in advertising revenue and event-based income forcing layoffs, furloughs, and closures
  • However, the pandemic has also highlighted the essential role of reliable journalism in informing the public and holding power to account, leading to a surge in subscriptions and donations for some news organizations
• Collaboration and partnerships between journalism businesses, such as joint investigations, resource sharing, and content distribution agreements, have become more common as a means of pooling expertise and expanding reach
• The rise of non-profit and philanthropic funding for journalism has created new opportunities for public service and investigative reporting but has also raised questions about the long-term sustainability and independence of these models

Case Studies

• The New York Times has successfully transitioned to a digital subscription model, with over 7 million subscribers as of 2021, by investing in high-quality journalism, interactive features, and a user-friendly paywall
  • The Times has also expanded its revenue streams through podcasts, events, and a cooking and games subscription service
• The Guardian, a British newspaper, has adopted a unique membership model that encourages readers to make voluntary contributions to support its journalism while keeping its online content free to access
  • The Guardian's membership program includes benefits such as exclusive content, events, and access to journalists, fostering a sense of community and engagement among its supporters
• The Texas Tribune, a non-profit digital news organization focused on Texas politics and policy, has built a sustainable business model through a combination of foundation grants, individual donations, corporate sponsorships, and events
  • The Tribune has also partnered with other news organizations, such as ProPublica and The Washington Post, to expand its reporting capabilities and reach
• The Salt Lake Tribune, a legacy newspaper in Utah, transitioned to a non-profit ownership model in 2019, becoming the first legacy newspaper in the United States to do so
  • The transition has allowed the Tribune to focus on local journalism and investigative reporting, with support from foundations, donors, and a paywall for premium content
• Axios, a digital media company founded in 2016, has built a successful business model around short, punchy news stories designed for mobile consumption and a focus on high-value sponsorships and native advertising
  • Axios has also expanded into local news, launching city-specific newsletters and hiring local journalists in several markets
• The Athletic, a subscription-based sports journalism website, was acquired by The New York Times in 2022 for $550 million, highlighting the value of niche, high-quality content in attracting and retaining subscribers
  • The Athletic's business model relies on in-depth, ad-free coverage of local and national sports teams, with a focus on long-form storytelling and analysis
• The Information, a subscription-based technology news website, has built a loyal audience by providing exclusive, deeply reported stories on the tech industry, with a high annual subscription price of $399
  • The Information's business model prioritizes quality over quantity, with a focus on serving a narrow but influential audience of tech executives, investors, and decision-makers

Ethical Considerations

• Journalism businesses must navigate the tension between their commercial interests and their public service mission, ensuring that editorial decisions are not unduly influenced by advertisers, sponsors, or owners
  • The separation of church and state, a principle that refers to the separation of the editorial and business sides of a news organization, is essential for maintaining journalistic integrity and independence
• The concentration of media ownership raises concerns about the diversity of perspectives and the potential for corporate interests to shape news coverage and public opinion
  • Media consolidation can lead to a homogenization of content, a reduction in local news coverage, and a lack of accountability for powerful interests
• The reliance on advertising revenue can create conflicts of interest, with news organizations potentially hesitant to report critically on major advertisers or industries
  • Sponsored content and native advertising, which blur the lines between editorial content and advertising, can mislead readers and undermine trust in journalism if not clearly labeled and distinguished
• The use of data and analytics to target audiences and personalize content raises privacy concerns and questions about the editorial independence of news organizations
  • The collection and use of personal data by journalism businesses must be transparent and comply with relevant privacy regulations, such as the General Data Protection Regulation (GDPR) in the European Union
• The spread of misinformation and disinformation online has heightened the importance of fact-checking, verification, and transparency in journalism
  • News organizations have a responsibility to prioritize accuracy and correct errors promptly, as well as to provide context and analysis to help audiences navigate complex issues
• The reliance on philanthropic funding and non-profit models can raise questions about the long-term sustainability and independence of journalism, particularly if funders have specific agendas or expectations
  • Non-profit news organizations must maintain transparency about their funding sources and editorial independence, and develop diverse revenue streams to ensure long-term viability
• The use of unpaid or underpaid labor, such as internships or freelance contracts, can exploit journalists and undermine the quality and diversity of journalism
  • Journalism businesses have a responsibility to provide fair compensation and benefits to their workers, and to support the development of a diverse and inclusive workforce

Future Outlook

• The continued growth of digital media consumption and the decline of traditional print and broadcast models will require journalism businesses to innovate and adapt their strategies for engaging audiences and generating revenue
  • The development of new technologies, such as virtual and augmented reality, artificial intelligence, and blockchain, may create new opportunities for immersive storytelling and revenue generation
• The increasing importance of subscription and membership models will require journalism businesses to focus on building loyal, engaged audiences and providing unique value propositions that justify the cost of access
  • The bundling of multiple subscription services, such as news, entertainment, and education, may become more common as consumers seek convenience and value in their media purchases
• The rise of non-profit and philanthropic funding for journalism is likely to continue, with a focus on supporting local news, investigative reporting, and public service journalism
  • However, the long-term sustainability and scalability of these models will depend on the ability to diversify revenue streams and demonstrate impact and value to funders and audiences
• The need for greater collaboration and partnerships among journalism businesses is likely to grow, as organizations seek to pool resources, expand their reach, and tackle complex stories and issues
  • The development of shared infrastructure, such as content management systems, data platforms, and distribution networks, could help reduce costs and increase efficiency for journalism businesses
• The increasing importance of data and analytics in journalism will require news organizations to invest in new skills and capabilities, such as data visualization, machine learning, and user experience design
  • The ethical and responsible use of data will be critical for maintaining public trust and upholding journalistic values in the face of technological change
• The continued erosion of public trust in journalism and the spread of misinformation will require news organizations to prioritize transparency, accountability, and engagement with their audiences
  • The development of new forms of storytelling, such as explainer videos, interactive features, and community-driven reporting, may help rebuild trust and foster greater understanding and dialogue around complex issues
• The economic and social impacts of the COVID-19 pandemic are likely to have lasting effects on the journalism business, accelerating the shift towards digital media and the need for innovative revenue models and cost-saving measures
  • However, the pandemic has also underscored the essential role of reliable, accurate journalism in informing the public and holding power to account, which may lead to greater public support and investment in quality journalism in the years ahead