COMMODIFICATION OF NEWS

The phrase “commodification of news” refers to the process through which news is translated into a commodity, or a good or service designed to earn its producer a profit when it is sold in a market.

News has been treated as a commodity in much of the world in recent decades. However, it is different from most other commodities. Since the invention of the telegraph, news has been a weightless product that can be transported over vast distances nearly instantaneously. It also has limited exclusivity and a short individual lifespan, as news quickly loses value as it ages and can be quickly repackaged by competitors. Additionally, one person’s consumption of news does not diminish its supply to the next person (unlike a pint of ice cream from Trader Joe’s). As such, the economics of news is unique in many ways, especially in a digital environment.

Commodities are responsible only to the marketplace. They are indifferent to the quality of democracy or the values of a society so long as buying, selling, and private profit-making are permitted. Put another way, the more news is treated as a market commodity, the less certain it is to supply the kind of information a democratic society requires.

Audiences and Advertising

Within the context of commodities, commercial journalistic organizations typically operate in a dual-product market. They produce and market one product (news) so they can produce another product (audience attention) that can then be sold to advertisers, who covet audiences for their products.

This relationship is particularly important because the majority of revenue for most commercial journalistic organizations today comes from advertising, and not directly from audiences via things like subscriptions. Indeed, since the invention of mass advertising, news has generally been subsidized (e.g., newspapers) or outright paid for (e.g., broadcast TV newscasts) by someone other than the audience. This has allowed news content to be more affordable for — and thus accessed by — mass audiences, who receive the content for far less than it costs to produce it.

This dual-product market is further characterized by mutual interdependence: Journalistic organizations need advertising revenue to subsidize their journalistic activities, but the amount of advertising revenue is often related to the amount of audience attention that the organization can deliver. Put another way, in order to increase the revenue necessary to produce quality journalism, journalistic outlets must deliver larger numbers of readers, viewers, or listeners — even as, one would hope, quality journalism is what helps to bring in larger audiences.

The Newsroom ‘Wall’

To combat the potentially negative influences of this interdependence on journalists’ ability to serve as truth-seekers, professional journalistic organizations tended to implement throughout the 20th and 21st century a metaphorical ‘wall’ separating the business side of the organization from its newsroom operations. On one side of the wall, journalists and editors developed content for citizens, with limited regard for the business implications of their reporting. On the other side, managers and sales staff worked with advertisers to sell the audience attention.

The purpose of the ‘wall’ was to grant journalists greater autonomy, or independence from business concerns, which would allow the organization to produce journalism. The ‘wall’ itself was often implemented through different social rules (and even physical obstacles) that reduced interactions between members of each side. This might include placing business personnel on one floor of a building and newsroom personnel on another, and having them report to different sets of supervisors. This was possible in large part because journalism was already a very profitable enterprise for much of the past century. (Although it may seem comical now, major newspapers were regarded as cash cows three decades ago.)

Such a separation was reasonably effective for much of the past century. However, it was not always impervious. For example, the news hole (the amount of space available for news in a product like a newspaper) was often dependent on the amount of advertisements that were sold for that edition. If there were more advertisements, there would be more newspaper pages, and thus more space for news content. Additionally, workers on the business side would sometimes pressure editors, with varying success, to push for content that was advertising-friendly. This did not necessarily mean producing stories that were favorable to specific advertisers, like a happy story about Trader Joe’s. Instead, it meant ensuring the news product had some happy stories in it. That’s because Trader Joe’s would be happier if its advertisement appeared next to a story that already left the audience member in a positive emotional state, which in turn would make them more likely to transfer that feeling of happiness to the product being sold by Trader Joe’s.

The industry’s economic challenges have resulted in that line becoming even more blurred in recent years, though. For example, one source of revenue newsrooms now tap into is called native advertising. This involves a newsroom having a team of ‘content creators’ (sometimes comprised of former journalists) who work directly with potential advertisers to create semi-advertisements that look and feel like a typical journalistic story. Such stories are often distinguished by being labeled as ‘sponsored content’ or with some other aesthetic signifier to show that they are not journalistic stories produced by the journalists at that organization. However, readers and viewers do not often make that distinction — indeed, the very appeal to advertisers is that those distinctions will not be made and that audiences will mistake native ads for editorial content. Although profitable, the downside to such efforts is that they may erode audiences’ trust in a journalistic organization.

Market Failure

The tension between treating news as a market commodity and practicing journalism as a public service has been a central dilemma in journalism for over a century. Notably, advertising was first welcomed rather than criticized because it promised to end, or at least ease, the dependency of journalism on the political parties that used to finance newspapers. In the Utopian vision of ad-supported journalism, advertising would enable market forces to empower audiences, resulting in the production of news information that was even more useful to them. Conversely, others worried that market sensitivities would seed market-driven journalism characterized not by “all the news that’s fit to print” but rather “all the news that’s fit to sell.”

Scholars have argued that quality journalism provides multiple fundamental benefits to a democratic society that the market fails to adequately compensate. For example, all members of a society benefit when voters are well-informed and thus able to choose wise leaders and reward good governance. Similarly, all members of a society benefit from the deterrence of corruption and abuse that results from an actively monitorial journalistic environment, as bad-faith actors weigh the costs of getting caught against the benefit of doing a bad thing. Yet, in a market-oriented system, not everyone pays for news. In fact, only a very small proportion of people do. This creates a free rider problem, where people can experience many of the benefits of a product without having to pay for it. Consequently, what is civically valuable but goes unrewarded in the marketplace — such as expensive public-service journalistic investigations — ends up being under-produced, since there’s no economic incentive for it.

Scholars have also found that the more responsive a newsroom is to market forces, the less it tends to serve the public interest through civic-minded efforts like ‘watchdog’ journalism. Again, this makes sense on multiple levels under rational-choice theories of economics. Rational managers and owners who seek to maximize their (or their investors’) economic return should produce the least expensive content that can generate the largest audience of subscribers and/or consumers that are attractive to advertisers. Rational advertisers should seek the largest audience of potential customers at the lowest cost while favoring outlets that produce softer, simpler stories that leave potential consumers in a positive emotional state. And, audiences are not themselves paragons of rational self-interest. They do not always financially reward the content that benefits them the most in the long run.

The confluence of these factors results in what economists call market failure, where there is inefficient production and distribution of goods and services within a free market resulting from the fact that the individual incentives for rational behavior do not lead to the best outcomes for a group (or society). This has become especially apparent as the economic underpinnings for commercial journalism in many parts of the world, including the United States, have been significantly challenged by sociotechnical disruptions.

For example, the newspaper advertising market enjoyed robust growth from 1950 to 2000, and then declined to the 1950 levels in the next 12 years alone. Consequently, newsroom employment in the United States declined by 51% between 2008 and 2019. Additionally, hundreds of small community newspapers in the United States have been forced to close, creating a situation where in 2019, almost half of U.S. counties had a single local newspaper (that was often only published weekly). The coronavirus pandemic of 2020 only increased those economic pressures: A third of U.S. newspapers experienced layoffs that year, with large-circulation newspapers being most affected.

This has required commercial newsrooms to significantly rethink how to serve their civic objectives while remaining economically viable — efforts that have, at least recently, guided them toward further diversifying their revenue models in order to make up for drastic losses in advertising. Even among local and national television journalism outlets, which have been less affected by those trends, there are more intense economic (and political) pressures to move away from expensive public-service journalism. There have been many calls to address the market failures within journalism, but the challenge has persisted.

Key Takeaways

• News is a unique commodity in that it often has a short lifespan, it is easily copied, and its supply does not diminish as it is consumed.
• Commercial journalistic organizations often serve two markets at the same time: audiences and advertisers. Advertisers subsidize the content that audiences need and audiences give advertisers the attention they seek.
• Historically, professional, commercial journalistic organizations separated journalists from business-people by creating a metaphorical ‘wall’ in the newsroom that promoted newsroom independence and autonomy.
• In many countries, including the United States, commercial journalism operates within a context of market failure in terms of serving of the public good. A number of happy coincidences allowed that system to work reasonably well for many decades. However, those coincidences no longer hold true.

Audience Measurement and Building

Introduction

The term “audience measurement” refers to the goal-oriented process of collecting, analyzing, reporting, and interpreting data about the size, composition, behavior, characteristics, and preferences of individuals interacting with particular media brands or products.

Historically, journalists and journalistic organizations had only very crude measures of what news audiences were interested in — and how (and to what extent) they were engaging with that content. For example, journalists would often turn to their friends and family, or perhaps to letters to the editor, for cues about what people were interested in and how their work was resonating with audiences. Journalistic organizations, in turn, would hire consultants to conduct focus groups, survey their readers, or ask broadcast audiences to keep a diary of the programs they watched.

Those methods came with significant limitations. First, they only provided partial data because they drew on small samples of people, who were often sampled in ways that made it hard to generalize findings to an entire audience. Second, and perhaps more importantly, the information was self-reported. This meant that people might say they wanted more information about international affairs because they thought that’s what they should say — after all, most of us want to seem cultured, even to strangers — when in fact the news they craved was information about Ryan Gosling’s latest film.

Audience Analytics and Metrics

The digitization of news has significantly changed how audience interests and consumption are measured. Specifically, digital systems enable passive, mass tracking. This means that when a person accesses a story, the infrastructure helping to serve that content — that is, the computer systems belonging to the journalistic organization and, often, other companies as well — will automatically record the fact that the content was accessed. These systems also often record additional information, including when that person accessed the content, where (roughly) they accessed it from, on what device, and how much time they spent with that content.

Those systems and information aggregation efforts are often called audience analytics, which is effectively a form of audience measurement that was not possible before the internet age. While it comes with its own limitations — for example, this system alone cannot give journalists a clear picture of how people feel about the content they access — it differs from past approaches in that it can gather information about all members of the audience, and that information is not limited to what audiences want to report. It is a more complete record, quantitatively speaking.

These systems can be used to automatically personalize content by linking it to past records of a news consumer’s behavior. For example, if the journalistic organization’s tracking systems know a specific audience member frequently accesses content about Ryan Gosling, it may choose to put that content in more prominent positions on its website (or suggest it as the next article for this user to read) because the system infers from past data that this individual wants to stay on top of news about Ryan Gosling.

Additionally, those systems produce what are often called audience metrics, or aggregate measures about the audience. These include the number of unique people who were exposed to a particular piece of content, where those individuals came from (not just geographically but also the website or platform that led them to that content), and how much time the average person spent with that content, or perhaps even how far the average person scrolled down the page. Thus, a journalist or journalistic organization can have a more quantified sense of how many people read their story and how they interacted with it, instead of just assuming a lot of people did because their group of friends, who likely share the same interests, found it interesting.

Journalists and newsrooms historically marginalized audience measurement data because they often viewed it as an intrusion on their journalistic autonomy and independence. Put another way, drawing on their role orientations and occupational ideology, they would often believe they had to give audiences certain kinds of news — regardless of how popular it might turn out to be — because it was a civic necessity to do so.

While there was always some tension over this, the high profitability of journalism made it easier for journalists to resist perceived intrusions in the past. The combination of these new technologies and the economic challenges faced by commercial media in recent years have resulted in even greater pressure to use audience analytics and metrics to more efficiently cater to audience desires — and made it riskier for journalists to resist such pressures.

Such systems and information do not exist to solely further economic objectives, though. Audience analytics and metrics can and arguably should be used to find ways to better understand what audiences want in order to make civically important content more appealing to them — whether in terms of its substance or simply how and where it is presented, as well as to encourage greater audience engagement and loyalty. Additionally, researchers have found little evidence that highly professionalized newsrooms like The New York Times and The Guardian are blindly making news decisions based on audience metrics alone. Nevertheless, it has become apparent that these technologies and cultural artifacts have changed how journalists think about their work and the ways in which they perform it.

Bundling and Journalism

For much of its history, commercial news media has been a bundled product. What this means is that a person rarely bought a single piece of news, or even just news. Instead, they bought a single product that included local news, national news, sports news, and arts news — as well as comics, classifieds, and advertisements. This allowed journalism to be produced in an efficient way insofar as it allowed journalistic outlets to make money from two mutually dependent sources — audiences and advertisers — with a single media vehicle (e.g., a newspaper). Classifieds are emblematic of this: A local business would pay the journalistic outlet a fee to list a job opening in the newspaper while local citizens would pay the outlet for the cost of the newspaper to find a new job openings. A similar arrangement existed for engagement announcements and obituaries, which were also bundled in.

Content that was cheaper to produce (e.g., post-game reports from local high school football games) also helped subsidize more expensive content (e.g., an investigative series on local corruption). Put another way, citizens often bought the newspaper because they cared about their local sports teams and would perhaps stick around for, and benefit from, the investigative series. The journalistic organization, for its part, tended to see the investigative series as more central to its mission and as a potential status marker — such stories are usually the ones that receive major journalism awards — and viewed its cheaper and more popular content as a way to pay for it.

This dynamic has changed considerably in recent years. Audiences are now less likely to go directly to a journalistic outlet’s homepage or app, and they are far less likely to seek out a single source to satisfy all of their information needs. Put differently, an individual may go to The Boston Globe for coverage of regional politics and policy, to BuzzFeed for entertainment news, to a local sports enthusiast’s blog for analysis of high school football, and to the British Broadcasting Corporation, or BBC, for coverage of international affairs. As such, news has become unbundled in many ways as journalistic outlets place all of their news online for free or under a ‘soft’ paywall knowing that individuals will only access some of the content. That, in turn, results in advertising revenue only being generated for those things that are accessed, putting pressure on commercial outlets to focus on narrower sets of content that can pay for itself.

Moreover, journalistic outlets have lost their monopolies on some of those key dual-channel revenue sources. For example, people now go to websites like Craigslist and Indeed for classifieds, and to Facebook to discover who is getting engaged (and perhaps who has died). There is also a plethora of free and paid entertainment alternatives that far exceed what journalistic outlets have ever been able to offer.

Because of this evolution in the news industry, the structural advantages and subsidies that enabled commercial journalism to operate as it did in the past no longer exist in such advantageous ways.

Key Takeaways

• Journalistic outlets have always tried to measure different aspects of their audiences and their audiences’ wants, but audience analytics and metrics have enabled more quantifiable measurements of individual audience members and of audiences as a whole.
• There is now great economic pressure on journalistic outlets to make use of audience metrics in guiding editorial decisions. However, professionalized newsrooms still draw heavily upon their conceptions of newsworthiness when making those decisions.
• Journalistic products are no longer bundled in the ways they were before. This has both reduced their ability to subsidize expensive, civic-minded news through cheaper, more popular content and reduced the opportunities to generate revenue from non-news content.

THIRD-PARTY PLATFORMS

Today’s journalism environment is deeply influenced by third-party platforms, or technical systems that mediate exchanges between content producers and consumers. Those platforms have significantly altered how news is monetized, distributed, and engaged with, and have consequently disrupted key financial support mechanisms for journalism in market-oriented media systems around the world.

Many journalistic organizations have experienced what may appear to be a paradox at first sight: They now have access to a far larger potential audience than ever before through their digital distribution channels — and, in fact, often have more readers, viewers, and listeners than ever before — yet they have seen a drastic reduction in advertising revenue.

The reason for this is two-fold. The first reason is that the cost for placing an advertisement on an organization’s digital offerings is exponentially lower than the cost for placing an advertisement on that same organization’s analogue offerings. Put another way, it is a lot cheaper to place an ad on the Daily Hampshire Gazette’s website than it is to place that same ad on its newspaper. This is due in part to the fact that online audiences have historically been seen as less valuable by producers and advertisers alike. However, it is also due to the increased supply of content online. If an advertiser wants to reach a particular kind of audience offline, they have a far more limited set of media vehicles — such as the lone newspaper for an entire county and the few broadcast channels that cover that area. Conversely, there is a seemingly limitless supply of media vehicles online, such as the billions of websites that exist.

The second reason is that much of today’s advertising is managed through third-party platforms that not only govern pricing but also take a hefty cut. For example, if UMass wanted to promote its excellent Journalism Department to an international audience, it might work directly with The Japan Times to publish an advertisement in its newspaper. However, if UMass wanted to advertise on The Japan Times’ website, it may need to work with an intermediary like Google’s AdSense, which might handle all of the online advertising for The Japan Times (as well as for millions of other websites).

This is the case for many journalistic organizations today, and it comes with many implications. The most important of these is that there is downward pressure to keep ad rates low online. Specifically, UMass may reason that its goal is to reach people outside the U.S. who are interested in journalism — and it may not care if those people are found on The Japan Times‘s website or elsewhere on the web. Thus, they will use an ad-tech intermediary (like Google’s AdSense) to target their ad to a certain demographic and set a maximum price. Google’s AdSense may then allow any website visited by any user matching that demographic — based on a profile that the ad-tech company has created from different data points — to show UMass’ ad so long as a website accepts UMass’ pricing limits. (Ad-tech systems do allow for black-listing, too. This means that some websites are not eligible to show an ad if they contain certain keywords. While this is usually restricted to offensive language, it can be extended to sensitive topics, like human rights abuses. That, in turn, may discourage the production of news stories about those topics.)

All of those decisions are made by automated systems in microseconds through what is called programmatic advertising, and it often results in lower ad prices because a rational advertiser will seek to advertise on the websites that require the least amount of money while delivering the desired audience. This pushes websites to accept lower rates in order to ensure they have advertisements to serve. On top of this, those intermediaries charge the websites a service fee for each ad shown. Thus, not only are journalistic outlets receiving less money for each ad but they also receive just a portion of that amount.

It is therefore unsurprising that while digital ad spending has grown immensely, much of those gains have been highly concentrated among a few companies. Specifically, Google and Facebook alone are estimated to receive more than half of global digital ad spending, with China-based Alibaba coming in a distant third.

In short, many of the gains in digital advertising are not being realized by journalistic outlets; the uptick in online ad revenue has not come close to replacing the losses in offline ad revenue for many journalistic outlets; and many journalistic outlets still rely on their offline products for the majority of their advertising revenue, even as they have much larger audiences online. This helps us understand why some traditional media companies still orient themselves, at least in part, around media vehicles that are widely seen as being phased out along generational lines (e.g., a newspaper): Such outlets generally have more control over, and can extract more value from, their legacy products.

Distributional Intermediaries

Third-party platforms are not limited to advertising, though. In the United States, much of Europe, and elsewhere in the world, a small group of Silicon Valley-based companies — namely Google, Facebook, Apple, and Twitter — largely control the social media, web search, and mobile application platforms that audiences use to find and access news.

Because of their positions as intermediaries, those companies generally realize many of the economic benefits from news production while not suffering its costs. For example, a platform like Facebook benefits from user-generated content like its users’ posts (including any news they may break); from the fact that many people rely on Facebook to be their primary news source, via the links that are shared by their friends; and from the many journalistic outlets that use Facebook themselves in order to promote their content (often by offering portions of it for free on the platform). All of this participation comes at relatively negligible cost to Facebook, because it does not pay any of these people for the very content that makes its platform worthwhile.

At the same time, platform owners seek to avoid expensive legal and gatekeeping responsibilities by claiming to be distinct from media organizations. Put another way, they often claim to only offer neutral, technical infrastructures in order to avoid the public interest obligations that governments have historically placed on broadcasters and that society expects from traditional journalistic outlets. After all, such platforms tend to claim, they do not produce journalistic content of their own, and their platforms are governed by supposedly impartial algorithms, rather than humans, to determine what to show audiences and how to show it. Therefore, the argument is that such neutrality should shield platforms from journalistic responsibilities, or from legal risks like accusations of libel. (This is, of course, a weak argument. Their algorithms reflect the values and/or economic interests of platform owners, and the algorithms exercise a form of judgment when they promote content that is expected to elicit further engagement on the platform.)

Third-party platforms also create loyalty challenges for journalistic outlets. In the past, audiences tended to go directly to trusted outlets to find information. Put another way, they actively sought it out. Today, audiences increasingly go to news aggregators like Apple News, or they wait for news to find them on social media platforms like Facebook, Twitter, and Reddit. As users are shown an array of news from a lot of different news brands, they begin to disassociate the content from the brand itself. Put differently, researchers have found that, after reading a news story, less than half of people would remember the journalistic organization that published the story if the individual found the story on social media. (However, most people could remember which social media platform they used to find it.) In contrast, 80% of people who found that same story on a journalistic organization’s website were able to remember who published it. In short, social media platforms end up receiving more of the credit for the content published by journalistic outlets than the journalistic outlets themselves. That, in turn, reduces the worth of the organization’s brand and the incentive to produce high-quality content in order to help the brand stand out in a crowded marketplace.

The massive size of these third-party platforms — Facebook alone counts billions of users worldwide — and their structural positions as intermediaries make it difficult for journalistic outlets to ignore them. Moreover, they are difficult to displace. Such platforms are subject to network effects in which a product or service becomes more useful as more people use it, creating conditions for monopolies or outsize power. Consequently, many journalistic outlets believe they must not only have a presence on those platforms but that they must engage with audiences there, too, even as such participation further tethers them to these platforms. Put another way, journalistic outlets are forced to weigh the short-term benefits of tapping into new audiences and remaining relevant on popular platforms against long-term concerns about ceding further control over their content and processes. While more journalistic outlets have begun to distance themselves from some third-party platforms in recent years, such efforts often come at great risk.

Key Takeaways

• Third-party platforms refer to technical systems that mediate exchanges between content producers and consumers. This includes social media platforms like Facebook, search platforms like Google search, and ad-tech platforms like Google AdSense.
• Although digital advertising has grown immensely over the past decade, it has not come close to replacing the revenue lost from non-digital advertising for most journalistic outlets. This is due in part to different pricing regimes and the ad-tech intermediary platforms that pervade online spaces.
• Distributional intermediaries like Facebook and Apple News have benefited greatly from the economic benefits of news production yet bear little of its costs. They have also sought to reduce their media-related responsibilities by claiming to be neutral platforms rather than media companies.
• Although these platforms have introduced many challenges to a range of journalistic outlets — especially traditional organizations — those outlets have often found the cost of non-participation on platforms to exceed those of participation.

NON-PROFIT JOURNALISM

Non-profit journalistic outlets are not driven by commercial concerns but are instead dedicated to furthering a public-service mission, filling gaps resulting from market failures, or advancing a particular social cause.

Non-profit outlets have long been a part of many media systems. For example, in the U.S., The Associated Press was founded as a non-profit cooperative in 1846 in order to lower newsgathering costs among its commercial and non-commercial members. Over time, it has helped ensure that audiences in different parts of the country have access to high-quality information from around the U.S. and abroad. Globally, journalism outlets like The Guardian in the United Kingdom and Malaysiakini in Malaysia operate in the spirit of promoting high-quality journalism and providing alternative voices, especially in tightly controlled media environments where commercial and state-sponsored media are afraid of challenging those in power.

Non-profit media have seen considerable growth over the past two decades as the economics of commercial journalism have been disrupted. Put another way, for much of the 20th and 21st centuries, a happy coincidence enabled the market, via advertising and subscription revenue, to support the existence of a robust, ad-supported journalistic sector. There is, however, no reason why that model has to work to adequately support journalism’s public-service responsibilities. Indeed, the drastic drop of advertising revenues and the reluctance audiences have shown for paying for online content in high-choice environments has illustrated how vulnerable that model is.

Objectives, Norms, and Funding

Many of the non-profits established over the past two decades have been founded by journalists who used to work for commercial outlets and became concerned about the ability of commercial media to provide public-service journalism. This is especially the case in democratic societies that lack a strong, state-supported, public-service broadcasting system. Non-profit journalistic outlets often seek to produce the types of content that their founders are concerned is in short supply elsewhere — often because such content is perceived to go unrewarded by market forces. This includes expensive genres like investigative journalism and international journalism, as well as topics that are deemed to be intractable or less-captivating to mass audiences, such as homelessness and mass incarceration.

Many non-profit journalistic outlets share some of the dominant role orientations, norms, and news values associated with journalism in a particular context. For example, conceptions of newsworthiness at non-profits are not wholly different from those at their commercial counterparts. Instead, they are tweaked and, most importantly, less encumbered by economic concerns. Moreover, for these outlets’ content to be considered journalism by audiences, it must still resemble to some extent the forms and formats recognized as journalism within that context — which the dominant, typically commercial or state-supported, outlets play a large role in shaping.

Non-profit outlets often raise funds from an array of sources. The two primary sources tend to be audience-derived contributions and philanthropic grants. Audience-derived contributions may include the subscription fees often found in commercial media, but it typically also includes voluntary donations and crowdfunding campaigns. Philanthropic grants often come from other non-profit organizations and foundations that are devoted to promoting the civic good. For example, the Knight Foundation is a major philanthropic organization in the United States, and it will sometimes provide upwards of $100 million in grants each year to help advance journalism in the U.S. For most other foundations, journalism constitutes a portion of their giving, which is often related to a focus on democracy, community, or education. Researchers have estimated that between 2009 and 2017, foundations provided more than $9 billion worldwide in order to advance journalism — though a significant portion of that was in the United States.

However, those two sources alone are rarely sufficient for non-profit journalistic organizations. Many also draw upon advertising and sponsorships as supplemental revenue sources, though their dependence on advertising is generally lower than that of their commercial counterparts. They also engage in a range of additional revenue-generating activities, like hosting conferences, social events, workshops, and webinars — though these activities usually only account for a small proportion of overall revenue. Additionally, non-profit journalistic outlets benefit from favorable tax status in some countries (including the United States), meaning that contributions to them are tax-deductible and they themselves have to pay fewer taxes.

Impact and Sustainability

The dependence on philanthropic funding does not come without entanglements. Such funders typically receive more requests for funding than they can fund, and they thus tend to require organizations to justify the merit of their requests by demonstrating their impact and sustainability.

Impact is immensely difficult to measure and demonstrate. Funders will often develop different ways of understanding impact, which may include measures of the reach of a project (i.e., how many readers, viewers, or listeners it attracted), the impact(s) it had on policy and governance (e.g., if it resulted in the passing of new legislation or ousting of a corrupt figure), and the coverage it helped generate from other news organizations (e.g., local investigations resulting from a national dataset compiled by the non-profit). However, such developments can be difficult to track and to tie directly to the non-profit’s work, and they may not become apparent for a long time. Moreover, the measures of impact imposed by a funder can significantly shape the journalism produced by a non-profit journalistic outlet — in both positive and negative ways.

Many (though not all) funders also ask non-profit organizations to demonstrate a path toward self-sustainability. A substantial amount of the funding comes as so-called ‘seed grants’ that are intended to help an organization get off the ground, with the expectation that the organization will find sufficient revenue sources over time to no longer require assistance from that particular funder. Indeed, many non-profit journalistic outlets tend to face an inflection point around their fourth or fifth year of operation, and many that fail to establish themselves financially by then are forced to close. Philanthropic funding can thus be an unstable and temporary source of revenue.

Impact and sustainability often become linked in practice within the context of non-profit journalism. One way to demonstrate impact is to point to a growing, loyal audience, which can then be monetized through donations and subscriptions. Additionally, in order to reach a larger audience and increase the impact of a story, non-profit journalistic organizations will often partner with larger, commercial journalistic outlets to distribute the work. For example, the non-profit ProPublica launched its first investigation in 2008 in partnership with the popular CBS television program 60 Minutes, and it has since worked with The New York Times, BuzzFeed, and NPR to increase its reach. In some instances, the works are collaborations — both the non-profit outlet and the commercial outlet devote some resources to producing a story — but oftentimes, the non-profit provides the content for free simply to reach more people. This is because some non-profits tend to publish infrequently, and their own websites and distribution channels tend to have smaller audiences. Thus, even when funders are directly supporting a non-profit like ProPublica, they are also offering indirect subsidies to the commercial organizations that use the non-profit’s work.

Finally, it should be noted that although we have focused on funding for organizations, there is also a robust sector of philanthropic funding for freelance journalists (journalists who work independently and are not attached to any one organization). Such journalists may then work with an established journalistic outlet, such as PBS, or even a non-traditional partner (e.g., Netflix) to ensure wider distribution of their work.

Key Takeaways

• Non-profit journalistic outlets are not driven by commercial concerns but are instead dedicated to furthering a public-service mission, filling gaps resulting from market failures, or advancing a particular social cause.
• Non-profit journalistic outlets typically get the majority of their funding from subscribers or donors and from philanthropic foundations that support issues and perspectives they believe are not adequately covered by other media.
• Non-profit journalistic outlets must often demonstrate their impact and pathway to sustainability in order to receive financial support from philanthropic foundations. They will also sometimes work in partnership with commercial outlets to increase their reach.

STATE-SUPPORTED JOURNALISM

State-supported journalism refers to journalism that is directly supported by state governments. This includes both public funding for independent, self-governed journalistic outlets and ventures as well as direct management of state-owned and state-supervised media apparatuses.

State-supported journalism is often promoted by governments that feel responsible for safeguarding and fostering sustainable, critical, and high-quality journalism options that serve the public instead of commercial media owners, shareholders, and advertisers. In these cases, state-supported journalism is argued to be a necessary response to the market failure paradigm wherein self-regulated markets prove to be inefficient or incapable of producing news that serves the public interest. Therefore, state support is needed as a correction, in order to support journalism that can monitor and hold accountable the institutions of government, commerce, and civic life.

However, state-supported journalism can also encompass what are commonly called state-controlled media, wherein the government funds media organizations to more efficiently reach large audiences with the government’s messaging. Under that information regime, the media organization often works to advance the political interests of the state by serving as the state’s mouthpiece. Those interests may be advanced both domestically and internationally.

Independent State-Supported Journalism

Many countries around the world, from Argentina to Afghanistan to Albania to Australia, have some kind of state-supported journalistic outlet. These outlets are typically rooted in radio and television broadcasting, though there are some instances of state-supported print media and digitally native media. This is due in large part to the natural scarcity of broadcasting frequencies: There are only so many airwaves that broadcasting devices can use, and those frequencies have historically been treated as public goods.

However, any form of government support for journalistic media raises questions about the independence of the media producers. Put another way, how can a government foot the bill for journalists without unduly influencing (if not outright intervening in) the editorial process?

One way to do this is to establish an independent governance model, as is the norm in many European countries. For example, the British Broadcasting Corporation, or the BBC, operates as a public service broadcaster that is funded directly by citizens through an annual license fee that is set and collected by the government. Those funds are then transferred to an independent company with a board of directors that oversees the general direction of the BBC and an executive committee charged with overseeing its day-to-day operations. By creating a managerial structure that is largely separate from the British government, the BBC is generally able to remain independent from it. Additionally, it operates under a royal charter that charges it to produce public-interest journalism that advances the interests of the citizens of the entirety of the United Kingdom. While it is not free from criticism (especially from public officials who feel scorned), its journalistic arm (BBC News) is not only well regarded internationally but is the largest broadcast newsgathering operation in the world.

Europe has been particularly successful in developing a public policy framework that grants state subsidies to journalists and journalistic outlets that serve the public interest, advance accountability and transparency, and contribute to critical thinking and well-informed debate among citizens. Such efforts may include direct cash payments to selected projects or general incentives (e.g., reduced rates for mailing news media) that play a vital role in creating favorable economic conditions for a public-interest culture in journalism.

Moreover, those frameworks often help support public-service broadcasters — organizations like the BBC in the United Kingdom, France24 in France, and NRK in Norway — that are designed to produce public-service journalism and are often among the biggest news producers in their countries. Researchers have found that countries with well-regarded public-service broadcasters tend to have better-informed citizens.

While the United States does offer some level of government support for journalism, its efforts pale in comparison to its European counterparts. For example, less than 1% of National Public Radio’s (NPR) funding comes from the federally funded Corporation for Public Broadcasting (CPB) or from federal agencies and departments. Most of NPR’s funding comes from corporate sponsorships and dues paid by member stations across the country. Those member stations, in turn, receive just 12% of their funding from the CPB and other federal, state, and local government sources. In short, public media in the U.S. receives a relatively small amount of state support. Instead, most public and non-profit journalistic outlets in the U.S. rely on charitable contributions from individuals, corporations, and foundations (e.g., crowdfunded journalism and philanthropic funding).

State-Controlled Media

In the absence of structures to protect the independence of journalists, state-supported media can become state-controlled media. Under this environment, organizations will seek to appear journalistic but functionally serve as propagandist organs of a government. This does not need to involve fabrication on the part of the organization, or the production of disinformation. Instead, it may simply involve the systematic exclusion of stories and perspectives that are critical of the state, and the systematic over-inclusion of stories and perspectives that are favorable to the state. (However, such outlets may, and some often do, produce false information that reflects positively on the government.)

For example, the Xinhua News Agency serves as the official state-run press agency of the People’s Republic of China. It is by far the biggest and most influential media organization in China, and it is arguably the world’s largest news organization in terms of personnel. In addition to operating within China, it also has more than 170 news bureaus — or satellite offices — worldwide, making it one of the most international news organizations in the world.

Xinhua has been routinely criticized for its deep connection to the Communist Party of China, and its governance structure places it under the direct supervision of party officials. As such, Reporters Without Borders has called it “the world’s biggest propaganda machine.” Nevertheless, it has served as a crucial instrument for communicating its citizens’ needs to party officials, and for (favorably) conveying the party’s policies and initiatives to citizens.

Xinhua has also served as an instrument for increasing China’s foreign influence. It delivers its content through multiple mediums, including print, broadcast, and online, and in multiple languages, including Arabic, Chinese, French, English, Japanese, Portuguese, and Russian. In recent years, Xinhua has acquired commercial real estate in New York’s Times Square, bolstered its English-language reporting staff, and started an English-language satellite news network. Such efforts are capable of producing strong journalism — especially about matters only loosely related to China — but they are generally driven by a desire to spread perspectives that are aligned with those of the Chinese state.

State-controlled journalism is not limited to China. It is present under many authoritarian regimes, including Eritrea, North Korea, and Turkmenistan. Additionally, even in semi-democratic societies, state-controlled media may exist and reflect the political positions of ruling parties. In some cases, the dominant perspectives conveyed by such outlets change drastically as political power transitions between parties, making state-controlled media a bellwether of power.

Key Takeaways

• State-supported journalism refers to journalism that is directly supported by state governments.
• Strong, independent public-service journalistic outlets can emerge in media systems that receive substantial state support. Many European countries have well-regarded public-service broadcasters that promote a well-informed citizenry.
• State subsidies can also support state-controlled media outlets that are designed to promote the viewpoints of ruling parties and serve as instruments for advancing foreign influence.