Who Pays for the News?

How journalism has been funded by advertising, subscriptions, public money and donors, and why news is an unusual economic product.

Reporting news costs money: journalists, editors, travel, legal checks and technology. Yet news has always been an unusual product to sell. Understanding how it is paid for helps explain the challenges facing journalism today.

Why news is unusual

Public good features: once news is published, it spreads widely, and one person reading it does not stop others from benefiting. People can learn the news without paying for it.
Positive externalities: good journalism benefits society by informing voters and exposing corruption, benefits that readers do not fully pay for.
Time-sensitive: news loses value quickly.

These features mean markets may produce less journalism, especially investigative and local reporting, than would be best for society.

Traditional funding

For much of the twentieth century, newspapers and broadcasters were funded by:

Advertising: businesses paid to reach readers and viewers. Classified adverts for jobs, homes and cars were a major source of newspaper revenue.
Sales and subscriptions: readers paid for copies.
Licence fees and public funding for public broadcasters in many countries.

Advertising effectively bundled news with other content: readers bought a paper for sports, classifieds or entertainment, and the revenue also paid for news.

New models

As advertising moved online, news organisations turned to:

Digital subscriptions and paywalls.
Memberships and donations, such as The Guardian’s reader contributions.
Philanthropy and non-profit newsrooms.
Events, newsletters and other services.
Public support, debated in many countries.

The bundle unravels

A newspaper once earned money from job adverts, property listings, car sales and shopping deals. Readers bought it partly for these listings. When online platforms took over job and property listings, newspapers lost this revenue, even though demand for news itself had not disappeared. The bundle that funded journalism came apart.

Thinking people stopped wanting news

Many people still read and share news. The problem is that the ways of paying for it, especially advertising bundles, were disrupted, making it harder to fund the work of reporting.

Key takeaways

News has public good features and benefits society beyond its readers.
Journalism was traditionally funded by advertising, sales and public money.
Advertising bundled news with listings and entertainment.
New models include subscriptions, memberships, philanthropy and events.