Newspapers, advertising and the Internet: How journalism has always been subsidised

May 7, 2013 · by David Campbell · media economy, multimedia

iStock 000000503743Medium e1367926685199 Newspapers, advertising and the Internet: How journalism has always been subsidised

The disruptive power of the Internet changed everything in media. But it did not cause everything.

The decline of newspapers, so long the editorial paymaster for photojournalism, is a trend dating back six decades.

Globally there are mixed signals concerning newspaper circulation, with some reporting growth in Asia offsetting falls in Europe and the US, while other sources reveal “printed newspaper readership is now declining in almost all major economies,” including China and India.

In the US, UK and Canada, the data is clear and dramatic. The Communications Management Inc. study on Sixty Years of Daily Newspaper Circulation Trends shows newspaper circulation has been falling since 1950:

CM2011 newspaper circulation comparison e1367915469480 Newspapers, advertising and the Internet: How journalism has always been subsidised

Because the defining characteristic of the new media economy is “the separation of information from its means of distribution” we cannot conclude that the decline in newspapers means the demise of journalism, visual or otherwise. The reverse is in fact true – journalism has many homes and benefits from the freedom of circulation and distribution that the Internet makes possible – the Pulitzer Prize winning InsideClimate News is a great example.

The problem is that the traditional homes of journalism have seen their already parlous financial health further undercut. However, we have to remember that most media organisations are in business, but not primarily the business of journalism. Legacy organisations (including great ones like The New York Times) spend no more than 20% of their budget on news content (in fact, in the US the industry average is 12.7%). The rest goes on the management and operation of the distribution model.

Media organisations are in the business of advertising, advertising has accounted for 80% of their revenue, and that revenue has subsidised the journalism that provides the content that draws the readers/views in to see the advertisements. Above all else it is the collapse in advertising revenue for print media that has been the single largest cause of journalism’s financial crisis, as this graph from Mark Perry shows dramatically:

Newspaper ad revenue 1950 2012 e1367916973654 Newspapers, advertising and the Internet: How journalism has always been subsidised

The disruption of the Internet has put added pressure on print advertising and online advertising has not replaced print losses.

There are some vital lessons flowing from this for the future of visual storytelling. We have to understand that:

  • journalism (reporting, stories, pictorial coverage) has never been a viable, stand-alone product. It has never paid for itself directly and its users have never directly paid for all of it. Journalism has always been subsidised by indirect sources, principally advertising;
  • the culture of “free” is originally a product, not of the Internet, but of the mass media model – it comes from “free to air” radio, “free to view” television (both financed indirectly by advertising) and newspapers with small subscription fees making up no more than one-fifth of their revenue, all of which enabled many generations of users to get their information for no charge at the point of consumption;
  • there will not be a one-size-fits-all, single business model for good journalism in the future, but it will continue to depend on sources of indirect subsidy;
  • successful journalism operations (of which there many good examples) are becoming sustainable not by discovering some untapped, secret pot of gold, but by diversifying income, making new connections between advertising, paying for content, selling data and technology, events, freelancing, consulting etc.;
  • photojournalists and visual storytellers should not pin their hopes on “paywalls” for established news sites as the single best solution, because even if they work on some measures these are not going to bring back a lost golden age of editorial assignments, as user subscriptions can never replace lost advertising revenue for legacy organisations.

This historical perspective challenges some important myths about what happened to media. None of this makes the present struggle for critical visual journalism easy. But it should re-set the terms of the debate about what is happening now, and re-frame some of the strategic options for the future.

This is the fourth in a series of posts highlighting the content of “Visual Storytelling in the Age of Post-Industrial Journalism“, the World Press Photo/Fotografen Federatie study of the global emergence and development of multimedia in visual storytelling, especially photojournalism. The posts are searchable with the ‘Multimedia Research Project’ tag.

2 Responses to “Newspapers, advertising and the Internet: How journalism has always been subsidised”

  1. Some good points backed up by solid data. “journalism (reporting, stories, pictorial coverage) has never been a viable, stand-alone product” is something deep to think about. Most interesting blog you have, David!

  1. […] Good journalism has always been indirectly subsidised and never paid for directly, and this is complicated by the way the artificial scarcity prices of print advertising have collapsed since 2000; […]

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