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Funding Journalism in the Digital Age

Business Models, Strategies, Issues and Trends

Jeff Kaye and Stephen Quinn

The news media play a vital role in keeping the public informed and maintaining democratic processes. But that essential function has come under threat as emerging technologies and changing social trends, sped up by global economic turmoil, have disrupted traditional business models and practices, creating a financial crisis. Quality journalism is expensive to produce – so how will it survive as current sources of revenue shrink? Funding Journalism in the Digital Age not only explores the current challenges, but also provides a comprehensive look at business models and strategies that could sustain the news industry as it makes the transition from print and broadcast distribution to primarily digital platforms. The authors bring widespread international journalism experience to provide a global perspective on how news organizations are evolving, investigating innovative commercial projects in the United States, United Kingdom, Australia, Norway, South Korea, Singapore and elsewhere.
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2 How the news business entered the digital age – a history



This chapter considers the history of revenue models for newspapers and other media companies. How did we get where we are today? It looks at early digital developments and the dot-com boom and bust, before the watershed year of 2004 which witnessed the arrival of broadband, the spread of the Internet and Web 2.0, and a boom year for newspaper advertising. It ends with Rupert Murdoch’s Damascene conversion on the potential power of the Internet.

Way back in 1993, well-known newspaper industry analyst John Morton, looking at the future of newspapers and technology, said organizations behind new forms of electronic information delivery systems would never find it economical “to provide the mass amounts of local information that newspapers gather every day.” Telephone companies and cable TV operators did not appear to be much of a competitive threat to newspapers, he reasoned, in an American Journalism Review (AJR) article entitled “Papers will survive newest technology.” But while Morton did not foresee challenges to the core mission of newspapers to publish the news, he did warn against a serious threat against another essential aspect of newspaper operations – to make money. “What the electronic operators will do,” Morton wrote, “is go after the backbone of newspaper advertising revenue – local retail and classified advertising. The electronic Yellow Pages, when they arrive, will offer far more than telephone numbers, and cable operators are likely to develop classified and retail advertising channels as counterparts to the national home-shopping channels they already...

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