Page 2 Progress on Point 17.4
Funding Hard News is Hard
has always been challenging. Financing a team of dedicated local beatreporters, investigative journalists, national desks, foreign bureaus, and all the associatedproduction facilities and support staff is an extremely expensive undertaking.
And, for all thattrouble and expense, hard news rarely turns a healthy profit. Often it has been considered a
for media companies and has been cross-subsidized by other types of content orservices.
This is why “bundling”
has been such a popular model for many media operationssuch as newspapers, magazines, and cable television. By tying news production to other typesof content or services, media operators have been able to sustain the production of hard news,despite its general unprofitability on its own.
It’s worth recalling that a
business model to sustain hard news production and dissemination ona mass scale really only developed mid-way through our Republic. The early history of media inthis country was characterized
by the “partisan press” due to
the heavy reliance on a patronagemodel and direct association with political parties and figures. This changed with the rise of large daily newspapers in the mid-1800s and then broadcast radio and television in the earlyhalf of the 20
Media providers were able to cross-subsidize news productionindependent of private or political patronage thanks to three things: (1) high-speed printingpresses or broadcast facilities, (2) geographic-based market and pricing power, and (3) thewidespread advertising base that was made possible by (1) and (2).Over just the past 15-20 years, we
ve seen this traditional model upended. Increasedcompetition and technological/platform proliferation are placing an enormous strain ontraditional media operations and business models.
Schumpeterian “creative destruction” is at
some in Congress,
and many media worrywarts up at night: the fear that, as
til now, the iron core of news has been somewhat sheltered by an economic model that was able toprovide extra resources beyond what readers
would financially support. This kind of newsis expensive to produce, especially investigative repo
rting.” Alex S. Jones,
UTURE OF THE
(2009) at 4.
For a long time,
publishers have used news as a ‘loss leader,’
a product sold below costs to create othersales.
The Media Consortium,
The Big Thaw: Charting a New Future for Journalism,
James T. Hamilton notes that, “nonpartisan reporting emerged as a commercial product in American
newspaper markets in the 1870s. Before that time, many papers openly proclaimed association with a
particular political party.”
James T. Hamilton, A
(2004), at 3.
he Federal Communications Commission (FCC) recently kicked off a new“
”effort with aworkshop on“
Federal Communications Commission,
FCC Launches Examination of the Future of Media and Information Needs of Communities in a Digital Age