The news business model crisis is not a journalism quality problem. It is an economic problem whose solution determines whether civic journalism is financially viable.
The Model's Collapse
The news business model that sustained American journalism through the twentieth century — the bundled newspaper that provided a general information service to a broad local audience, funded primarily by classified and display advertising whose value reflected the newspaper's monopoly on local mass audience reach — was disrupted by digital technology that separated the advertising that funded it from the journalism that justified it. Craigslist took the classified advertising. Google and Facebook took the display advertising. The newspaper that remained provided the journalism without the advertising revenue that had made the journalism financially viable — and the gap between the journalism's cost and the revenue available to fund it produced the collapse in news employment and news organisation viability that has characterised the past two decades.
The search for sustainable news business models has produced genuine innovations — the subscription model, the membership model, the philanthropy-funded model, the nonprofit model — each of which has demonstrated viability in specific contexts and at specific scales. None has demonstrated the capacity to fund the full range of local news coverage, at the depth and across the geography, that the commercial newspaper model once provided. The models that have demonstrated viability are primarily concentrated in the digital-native national and regional outlets serving educated, higher-income audiences — leaving the local news desert in the communities that can least afford to lose local journalism.
The news business model problem is an economics problem with a governance dimension. The journalism that democracy requires is a public good — its benefits accrue broadly to the populations it serves, but the individuals who benefit cannot be excluded from those benefits in ways that would allow the journalism to be financed through individual market transactions. Public goods are systematically underprovided by markets. Civic journalism is no exception — and the solutions will require the public investment logic that public goods require.
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