The Business Model: How Money Shapes the Story
News isn't made by volunteers. It costs money — salaries, equipment, travel, legal costs. How a news organisation makes money shapes the news it produces.
Follow the money, and the editorial choices start making sense.
The Three Business Models
1. Advertising-Funded
Free-to-air TV, most websites, social media. You don't pay — advertisers do. This means you are the product. The news organisation sells your attention to advertisers.
Consequences: Stories need to maximise eyeballs. Dramatic, emotional, clickable content wins. Complex, nuanced, important-but-boring stories lose. Advertisers may also pressure outlets to avoid stories that reflect badly on them.
2. Subscription/Paywall
Newspapers like The Australian, NYT, and The Guardian (with donations). You pay directly for the content.
Consequences: Content must satisfy subscribers, not advertisers. This can produce better journalism — but it also creates a financial barrier. Only people who can afford subscriptions get quality news, creating an information inequality.
3. Publicly Funded
ABC and SBS are funded by the Australian government (approximately $1.1 billion/year for the ABC). They don't need ads or subscriptions.
Consequences: Potentially the most independent model. But government funding creates a different risk: governments can cut budgets to punish critical coverage. The ABC's funding has been cut by over $500 million in real terms since 2014 (ABC Friends, 2023).
The Attention Economy and News
In the digital age, all three models compete for your attention. This creates pressure toward:
- Sensationalism: Extreme stories get more clicks
- Speed over accuracy: Being first matters more than being right
- Opinion over reporting: Hot takes are cheaper to produce than investigative journalism
- Outrage content: Anger drives engagement more than any other emotion
The business model doesn't just fund the news — it shapes the news.
Tonight's Question
"Do you think news should be free? If not, who should pay for it — advertisers, subscribers, or the government? What are the risks of each?"
Follow the Money
- Pick three news sources: one free (ad-funded), one paywall, one public (ABC/SBS).
- Read the same type of story on each (e.g., health, politics, or crime).
- Compare: quality, depth, tone, and bias.
- Note the ads on the free site. Do any ads relate to the story topic?
- Discuss: did the business model seem to affect the journalism?
Go Further
- Research: What is "churnalism"? How do cost cuts affect news quality?
- Question: Should social media platforms pay for the news content shared on their sites?
- Book: The Death and Life of American Journalism by McChesney & Nichols (2010) — the crisis in funding journalism.
- Australian: Look up the ABC's funding over the last 20 years. Has it kept up with inflation?
What We Simplified
- Many outlets use hybrid models. The Guardian, for example, is free with a donations model. Many newspapers have both ads and subscriptions.
- Not all ad-funded journalism is bad. Some of history's best journalism was produced by ad-funded newspapers and broadcasters.
- Public funding has its own pressures. While the ABC is legally independent, political pressure on its funding and leadership is well documented.
Sources
- ABC Friends (2023). "ABC Funding Timeline." ABC Friends
- McChesney, R. & Nichols, J. (2010). The Death and Life of American Journalism. Nation Books.
- Reuters Institute (2023). "Digital News Report: Australia." Reuters Institute
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