Revenue Models

Print is not dead, even though it’s seriously wounded. There is a growing trend to cut down on frequency, with more newspapers abandoning daily publication.

The financial bedrock of the American news industry has shifted radically, with advertising revenue no longer able to support the journalism that the public has long depended upon. Tech behemoths like Facebook and Google are reaping much of the ad money that once went to local news outlets.

According to[ the Pew Research Center,](https://www.journalism.org/fact-sheet/newspapers/) the newspaper industry’s ad revenue fell 13 percent in a single year, from 2017 to 2018. That figure was alarming but not surprising, reflecting the dire economic picture that newsroom managers see every day.

I think eventually, at some point in the future, people are going to wake up and go, ‘Whoops, there’s nobody covering the news,’ when all the local news outlets have disappeared.

Jennifer Parker Editor and Publisher, CrossRoadsNews

Pew reported that 37,900 journalists were working in the newspaper industry last year, a drop of 14 percent from 2015 and 47 percent from 2004. [Newspaper circulation](https://www.pewresearch.org/fact-tank/2019/07/23/key-takeaways-state-of-the-news-media-2018/?utm_source=API+Need+to+Know+newsletter&utm_campaign=7652163f8a-EMAIL_CAMPAIGN_2019_07_25_12_07&utm_medium=email&utm_term=0_e3bf78af04-7652163f8a-45908039), both print and digital, fell in 2018 to its lowest level since 1940, Pew reported. [Local television news ](https://www.journalism.org/fact-sheet/local-tv-news/)took a hit as well, with the average audience down 10 percent in the morning and 14 percent for evening and late-night broadcasts from 2017 to 2018.

The new reality: weakened news organizations and growing sections of the United States virtually abandoned by journalism. According to [2018 research on “news deserts”](https://www.usnewsdeserts.com/reports/expanding-news-desert/download-a-pdf-of-the-report/) by Penny Abernathy of the University of North Carolina, more than one in five newspapers closed in the previous 15 years. Half of the 3,143 counties in the U.S. had only one newspaper, and 200 more had no newspaper at all.

Running out of things to jettison.

We’re on the edge of crisis. You know, quite realistically, any newspaper person that tells you they think they have a sustainable business is lying or whistling past the graveyard. There are no revenue trends that are positive if you’re not The New York Times. … We’re getting very, very close to the point where we don’t know what else we can jettison that won’t cause a big value loss and still produce something that’s relevant. Doug Phares Former CEO and President, Sandusky Newspaper Group
The business model has collapsed. That has led to decimation of the reporting squads, and as that happens, the reporting gets more superficial and less effective and meaningful to the community. Steven Waldman Co-Founder and President, Report for America

While advertising remains indispensable in the cash flow for most local news outlets, they are looking toward a host of smaller tributaries such as events, foundation-sponsored staff resources and business services such as marketing consultation.


Embracing a Customer Revenue Focus

The interviews in the News Leaders Project make clear that the No. 1 path for financial sustainability is a simple one: asking consumers to pay for their news.

They’ll pay if it’s worth it.

I always say the pay model strategy is deceptively simple. It is making something worth paying for. You can call it marketing strategy, you can call it a digital subscription strategy. But at the end of the day, it’s making something worth paying for. A.G. Sulzberger Publisher, The New York Times

The immediate challenge for many news outlets is to maintain or improve quality in difficult times while the public grows increasingly comfortable with paying journalists to inform them. And it appears that this attitudinal shift is happening.

Can Netflix help news outlets?

You can argue there’s the Netflix effect, where people do see that paying a certain amount of money every month for this all-access is something they’re willing to do. (People engaged in their communities) understand that having quality content costs money to create, and they want to support that. I think there’s more of that realization, that it can’t just be free. It can’t just be aggregated. That … journalism is important, and that there is a modest amount that our people are being asked to pay for, at least at our place, that they’re willing to pay for it. Timothy Knight President and CEO, Tribune Publishing

Gannett going halfsies on revenue.

Increasingly what we’re trying to do — and the goal for us is to get to about a 50-50 divide — is between our revenue being driven by advertising versus our revenue being driven by consumers and getting more and more to where consumers are paying for the content they’re consuming. Randy Lovely Former Vice President of Community News, Gannett

(Lovely was interviewed a few months before he retired as a Gannett executive. In August 2019, New Media Investment Group, the holding company that controls GateHouse Media, agreed to buy Gannett for $1.4 billion.)

But does reader revenue make a news outlet too elitist?

If you rely solely on subscriber revenue, you become very elitist, and it does not get to the people who need it most. Penny Abernathy Knight Chair in Journalism and Digital Media Economics, University of North Carolina at Chapel Hill

Everyone needs to row in the same direction.

The silos are gone in a lot of companies. And the business side is working with the journalism side. And everybody’s working together on audience development. And it’s a beautiful thing to watch unfold. And I feel like the newsroom, for the first time, is actively involved in the business model of news. And they never were before. They never wanted to be. In fact, they despised it. But their future, and the future of journalism, really relies on them taking an active interest and help to figure it out. Nancy Lane President, Local Media Association