21 ways to subsidise/profit from news

Jay Rosen, journalism teacher at NYU and long-time blogger on new media, has collected a list of ways news production can be subsidised. He differentiates between business models and subsidies because he notes that news production has always been subsidised in one way or another, whether by a wealthy owner or advertisers.

Here are the first nine:

1. Government can subsidize, through general tax revenues. As in some Scandanavian countries.

2. Rate-payers can subsidize, a solution that has to be enforced by government. As with the BBC license fee, or proposals to require Internet Service Providers to support journalism through a surcharge.

3. Political interests can subsidize the press, as with the party press in 19th century America or labor’s willingness to fund some new media operations today.

4. Philanthropy is a possible source of subsidy, as with the rolling grants that Paul Bass secures for the New Haven Independent, or the donations that have flowed to the start-up, Texas Tribune.

5. Rich egoists will sometimes subsidize, as with Mort Zuckerman’s ownership of The Atlantic magazine from 1980 to 1999.

6. Advertisers are of course the most common subsidizers, though as Clay Shirky says, Best Buy never signed up to fund the Baghdad bureau. They just didn’t have a choice.

7. Entertainment and the revenues it produces can subsidize news production, as with the early days of network television, when the news divisions lost money. Good old fashioned sensationalism also fits under this heading.

8. Soft news can subsidize the hard, as with travel and food sections that pay for other kinds of coverage. (A point suggested by Richard Gingras of Salon.)

9. Unrelated businesses are sometimes a sources of subsidy, as with the Washington Post Company’s ownership of the highly profitable Stanley Kaplan.

The rest are here and some interesting discussion and links follow in Rosen’s piece and in the comments.

Jeff Jarvis added the following business models in a comment:

* E-commerce. That is, direct sales. I’m fond of telling the world that the Telegraph in London is the leading retailer of hangers (and does good business in Panama hats, wine, travel, garden shed; the NY Times now has a wine club). In sensible areas, where there is no competition with advertisers, why not sell direct?

* Gambling. Betting works for the Telegraph. Mort Zuckerman has begged to be allowed to use it in the U.S.

* Real estate sales. The Salt Lake City paper bought a brokerage and is now in the real estate business, undercutting the entire market on the sell side by offering flat-rate $2,000 listings and entry into the multiple listings service. Realtors left papers so why not compete? Dean Singleton is thinking about bringing this to jobs and autos if it works.

* Events. Papers have held job fairs. There are many events I could see that would bring value to the community and allow the news org to extract value in return.

* Data sales. Business newspapers sell books of lists, which are really just data. Much opportunity in gathering and selling there.

* Books. The SF Chronicle and the NY Times used to have book publishers. OK, that’s not a great business anymore. But with new publishing techniques and the ability of the paper to market directly, there’s life left there.

* Ad networks. Rather than just selling a site’s own space, sell the network (a la Glam)

* Advertiser services. Media will more and more act as an agency: help local merchants get on the web and Google and charge a fee for that.

* Education. See what Michael Rosenblum is doing with his Travel Channel Academy.

* Café. AnnArbor.com now has one.

* Nonmonetary support/Volunteerism: I tell the story of Wikipedia getting hundreds of millions of dollars of value in just the labor given to its edits. When we talk membership, that’s the kind of membership I mean.

* Delivery. Much of the value of print is distributing FSIs (free-standing inserts – coupons and circulars). For an online company, that could be a stand-alone business still.