Producing journalism is expensive, and the old ways of paying for it have been upended. Here’s how news organisations make money today, and why so many newsrooms have shrunk.
Reporting the news costs money. Journalists need to be paid, stories researched and checked, cameras and studios funded, and content distributed.
The old model
For most of the 20th century, newspapers were very profitable. They made money from sales and, above all, from advertising, including classified ads for jobs, cars and real estate, which were so lucrative they were called “rivers of gold”.
Commercial TV and radio news was funded by advertising around programs, while public broadcasters such as the ABC and SBS were funded mainly by government.
What changed
The internet moved much of that advertising elsewhere. Classified ads moved to specialist websites such as Seek, carsales and realestate.com.au. Display advertising increasingly went to Google and Meta, which can target ads using vast amounts of data.
At the same time, audiences began reading news for free online and on social media.
The result was a dramatic fall in revenue. News organisations around the world cut thousands of jobs, and many regional and local newspapers in Australia closed or stopped printing.
How news makes money now
Advertising remains important, both in print and broadcast and online, but digital ads earn far less per reader than print ads once did.
Digital subscriptions have become a major source of income for larger publishers. Readers pay for access to articles behind a paywall, as with The Australian, The Australian Financial Review and The Age.
Deals with tech platforms have also become significant. Under the News Media Bargaining Code, Google and Meta signed payment deals with many Australian publishers, and the new News Bargaining Incentive is designed to push platforms to keep paying.
Other sources include events, sponsored content clearly labelled as such, philanthropy, and licensing content to other media. Some outlets, such as The Guardian, ask readers for voluntary contributions.
Public broadcasters, the ABC and SBS, are funded mainly by the Federal Government, with SBS also running advertising.
Video and streaming
News organisations are increasingly building audiences through video, streaming and social media. Independent and digital-first outlets, including streaming news channels, are competing with traditional players for audiences and advertisers.
Why it matters
Journalism plays a key role in a democracy, informing the public and holding governments and businesses to account. When local newsrooms close, research suggests communities can become less informed about local councils, courts and businesses.
That’s why governments have looked for ways to support public interest journalism, while trying to protect media independence.
