Building News Sustainability

For decades, the commercial business model of bundled news with embedded advertising generated high profitability for publishers. The internet gave rise to new structures for news consumption as well as new and more targeted ways for advertisers to reach people. As the digital landscape evolved and more of the public moved online, the traditional news business model became obsolete and the news industry plunged into financial crisis.

Simultaneously, the role of news publishers began to change, particularly when it came to distribution of news. While the advent of digital platforms (primarily social media and search engines) broadened news publishers’ access to potential audiences, it also left publishers more dependent on these intermediaries.

Amid these changes, the news industry has made efforts to develop new business models such as building digital subscribers, donations, grants, membership events and other means of funding. While there have been some successes, the news industry has not been able to generate the levels of revenue it had previously enjoyed. Because news is critical to functioning democracies, governments and civil society have responded to economic challenges in the news industry with a range of policy initiatives aimed at providing financial support.

When it comes to commercial news media, a range of proposals to provide financial support exist, but most notable are recent media bargaining legislation in Australia and Canada, which have inspired policy debates in many parts of the world. Earlier attempts to provide financial support for news were often based on copyright law, but these policies are based on competition (antitrust) law, requiring digital platforms to negotiate payment to news publishers on the grounds that platforms have financially benefited from digital advertising by providing links to publisher content without due compensation. Other efforts, such as in the U.S., aim to create exemptions to antitrust law to bring technology companies to the bargaining table.

In response to some of this legislation, technology companies such as Meta and Google have begun to shift away from news altogether, calling the legislation unworkable for a number of reasons, including concerns over their own financial liabilities. This shift away from news would almost certainly harm publishers’ (and particularly smaller publishers’) ability to reach audiences and inhibit the public’s ability to access legitimate news sources and information.

There are also ongoing policy debates surrounding what is perhaps the most substantial form of direct government intervention in the news industry: support for public service media. In many democracies, public media sit at the center of the news ecosystem, making them key players in debates around public policy aimed at enabling independent, competitive journalism. However, public media also continue to face many of the same threats as the commercial news industry, including challenges with digital transitions, decades of budget cuts and, in some cases, political attacks. As we address later in this primer, policy discussions surrounding public versus commercial news media support are often siloed or considered at odds with one another (despite little to no evidence to date supporting the theory that public media support ‘crowds out’ or shrinks commercial news audiences).

Attempts to regulate economic support for the news industry introduce difficult but critical questions about the balance between news as a public good versus a market product, the role of public or local media and freelance journalists in the news ecosystem, the tension between content neutrality and curbing mis- and disinformation, the challenge of making complex and proprietary platform infrastructures publicly governable and accountable, the potential implications of government involvement in news media revenue structures and the role of public policy in compensating for market forces (versus changing them) in the public interest.

It is critical to address the economic sustainability of the news industry, which includes promoting a pluralistic, diverse and innovative media ecosystem, local and public news, and broader public access to news. However, these multistakeholder conversations must be guided by evidence-based practices that reflect strengths and weaknesses of policy-driven news support, with an eye toward media independence, plurality and transparency.

Globally, policymakers and civil society have tried a wide range of approaches to enable a sustainable and pluralistic media environment with varying success. These approaches have included but are not limited to:

• Funding for public service media via license fees (e.g., the UK), media taxes (e.g., Germany) or from the state budget (e.g., Denmark).
• Direct domestic subsidies (e.g., Denmark, France, Canada) to news organizations or independent funding bodies.
• Indirect domestic subsidies, including Value-Added Tax (VAT) exemptions and tax rebates (e.g., Ghana) or credits (e.g., Canada) for publishers, editorial roles, freelance journalists or digital subscriptions.
• Media subscription vouchers (e.g., France).
• Competitive or selective funds (e.g., formerly New Zealand).
• Emergency relief funds (e.g., during COVID-19).
• International subsidies for public interest journalism.
• Government advertising, though this can become a method of indirect censorship.
• Extended copyright or copyright-like protections (e.g., Germany, Spain, EU).
• Non-legislative approaches such as direct civil society or private-sector funding.

More recently, as we note earlier in this primer, adopted and proposed legislation in countries such as Australia, Canada, Brazil and the U.S. has required large platform companies to negotiate commercial deals with news publishers for their content, largely on the basis of antitrust or competition law. To proponents of these initiatives, they represent a much-needed rebalancing of power between digital platforms and the publishers whose content they distribute and monetize. As Australia’s News Media Bargaining Code in particular becomes a popular model for other governments, experts continue to note concerns, evidenced by research cited above, about issues of transparency, a lack of definitional clarity, long-term sustainability and further media dependence on major platforms. Additionally, media bargaining structures, which often primarily benefit legacy and larger publishers, risk becoming the arbiter of what news and information appears online, as well as whether news is carried there at all.

As we discuss in a separate issue primer, in many cases it is unclear how to assess what “quality” news – or even “news” more broadly – is. While some work indicates a certain degree of consensus around how to define ‘news’ across existing legislation in countries like Canada and the U.S., the provisions that structure these definitions (including publisher reach, size, geographic orientation, originality of reporting, etc.) vary and shape the outcomes of these laws.