How the Media Makes Money

In an ideal world, funding for journalism would come from consumers making choices in the marketplace. Unfortunately, this is not the case.

Advertising plays a fundamental role in sustaining news production. Jones and Salter cite Robert L. Craig who suggests that the media is “structurally dependant” on advertising. This means that advertising supports news organisations but only when it is in keeping with their interests. So while advertisers do not have direct influence on content, they do influence which organisations are sustained.

Online journalism has had a dramatic effect on the way media organisations do business as the increase in advertising space online has caused prices to fall. As Paul Starr points out in his article ‘Goodbye to the Age of Newspapers (Hello to a New Era of Corruption)’, consumers do not have to pay to read the news online, therefore the Internet has undermined the profitability of the newspaper in a number of ways.

“Newspapers have been able to make money from their print editions at both ends: by charging advertisers for eyeballs, and by charging the eyeballs, too. But online there are other news sources such as sites run by TV and radio stations, which have never charged their viewers or listeners. So, for newspapers, there goes circulation as well as advertising income.” However, the authors raise an interesting argument. Is the Internet just being used as an excuse to cut costs? As Jones and Salter point out, the economic challenges faced by traditional media were present long before the onslaught of the Internet and were “spurned on by digitalization more generally.”

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