“Nicco Mele, author, digital strategist and Wallis Annenberg Chair in Journalism at the USC Annenberg School of Journalism, discussed the future and feasibility of various news outlet business models,” according to a report at ShorensteinCenter.org. (The Shorenstein Center on Media, Politics and Public Policy is a Harvard University research center dedicated to exploring the intersection of press, politics and public policy.)
“Mele, who is also a former senior vice president and deputy publisher of the Los Angeles Times, and a Shorenstein Center board member, said that while the production and distribution of digital journalism are well understood, ‘what’s not well understood is how we make money or fund journalism in the digital age.’
“Mele described a deepening crisis in the newspaper industry: although some outlets are seeing the largest online audiences they have ever had, revenue is still shrinking. On a local level, preprint advertising (e.g. coupons) has seen a steep decline as retailers like Wal-Mart and Best Buy face challenges of their own. Paradoxically, print advertising still generates the vast majority of newspaper revenue – an undesirable situation, given the cost of printing.
“’If the next three years look like the last three years, I think we’re going to look at the 50 largest metropolitan papers in the country and expect somewhere between a third to a half of them to go out of business,’ said Mele.
“Mele noted that newer entrants such as Buzzfeed, Vox and Vice rely in large part on venture capital. ‘None of them are yet true public companies with a clear sense of what their revenue equation looks like,’ he said.
“While The New York Times and NPR have a strong subscriber base, few other outlets do, said Mele. “Part of the challenge is an overreliance on paywalls – people think you put up a wall, and that’s how you’re going to force people to pay. I think that building a subscription base is a lot more about engaging people in a variety of channels,” he said. He added that paywalls also hurt digital distribution on platforms such as Google and Facebook.”
The rest of the article is here.