Business Models, Strategies, Issues and Trends
1 The challenges of paying for journalism
The value of news media companies around the world has crashed since the global financial crisis started to bite in 2008. In America alone, newspapers lost $64.5 billion in market value that year. Traditional news organizations are struggling to survive. But the economic downturn has only speeded up a process that has been underway for decades. Emerging technologies and changing social trends began to disrupt established media business models and practices long before the latest crisis on Wall Street. The news industry is making a transition away from print and broadcast distribution to primarily digital platforms. But the advertising and subscription business models that supported traditional media companies in the past appear unable to do so in the digital age. Massive competition to attract online advertisers, and an expectation among audiences that web content should be free, are two of the biggest factors behind the current crisis. Quality journalism is expensive to produce – so how will it survive as traditional sources of revenue shrink? This chapter outlines the issues and challenges that media companies face in trying to fund journalism. It should be read in conjunction with the next two chapters, which consider the business models that have sustained journalism in the past.
The economics of journalism are not straightforward. Most other businesses operate with a simple formula: they offer products and services for sale and people choose to buy them or not. But journalism has mainly been paid for through indirect means. Newspapers and...
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