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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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13 Digital deliverance? Electronic paper and e-readers

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Distribution and printing represent the most expensive part of producing the print version of a newspaper, accounting for at least 60 percent of costs, and often up to 70 percent. News consumers are turning increasingly to mobile devices to stay on top of events. Could new electronic reading devices such as Amazon’s Kindle help reinvigorate the news industry by reducing production costs and satisfying readers’ demands for convenient distribution models. This chapter focuses on issues related to e-readers and the effects this form of electronic distribution may have on journalism.

The world’s largest newspaper printing plant, owned by News Corporation’s UK arm, News International, started production in March 2008 in Broxbourne, north of London. It is larger than 20 football fields and can produce 3.2 million newspapers a night. Most of the national titles in the UK have purchased new presses in the past three to five years or use the Broxbourne site.

The plant, plus two other new presses built by Rupert Murdoch’s UK unit, cost around $1billion. The cost of a printing press tends to be amortized over 30 years, so the money News Corporation spent works out at more than $30 million a year, not counting interest charges. By comparison, the cost of hosting a major web site that transfers a few hundred gigabytes of data a day is negligible. Distribution costs for online editions of newspapers are almost zero. But as earlier chapters have explained, revenue from online advertising...

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