Where do news organizations get their funding? 72% of Americans say they don't know

The jokes practically write themselves! Which is good, because soon there won't be any journalists left to help.

A song to read by: “A Moment,” by Jerry Paper

What I’m reading: “Their Eyes Were Watching God,” by Zora Neale Hurston

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Literally show me the money

A Pew Research Center study released earlier this month dropped a lot of freshly depressing information about the media industry, which is pretty par for the course at this point. Amongst the many enervating tidbits though, one especially despondent nugget stood out:

“About a quarter of Americans (27%) say news organizations do ‘very’ or ‘somewhat’ well when it comes to explaining where their money comes from, while an overwhelming majority say they do either ‘not too’ (33%) or ‘not at all’ (38%).”

In other words, 72% of Americans think that news publications do an unsatisfactory job at explaining how they make money and where their money comes from.

The study also connects this disheartening trend with another disheartening trend, because misery loves media companies.

Because news consumers lack a clear understanding of how news publishers make money, they are further inclined to suspect foul play or suspicious intent. According to the study’s authors, “This perceived lack of transparency is amplified by the public’s opinion that financial and corporate interests have influence on the news in some way.

In the absence of a clear understanding of how media finance works, readers are more likely to let their worst assumptions take lead. Case in point: 80% of respondents said that they think that these financial and corporate interests at least “somewhat” influence the news they get, including 38% who say they have “a great deal” of influence.

More irony, please!

There are multiple layers of gallows humor to be had here.

First, as I’ve written about a number of times, the media industry is in dire financial straits. Outside of a handful of well-heeled institutions, most publishers are struggling to keep the lights on, especially during Covid.

So what are the odds that, in a decade defined by shrinking budgets and declining bottom lines, the public now considers a lack of obvious revenue to be incriminating?

It’s hard to write a better punchline than: “Critics find journalism’s lack of profit suspicious, vow to read less to solve the issue.”

Second, the business of media is a relatively straightforward one. To paraphrase the words of another Mark, “Senator, we run ads.”

There are also subscriptions — which newspapers were doing way before everyone else jacked our swag — events, merchandise, and a handful of other financial baubles and trinkets.

Mostly though, the financing of journalism is much easier to understand than is the case in other industries.

Finally, journalists write all the time about the industry’s financial ills. I started Medialyte to do literally that exact thing, and there are dozens of other websites and blogs doing so.

If you want an academic approach to the issue, check out Nieman Lab, Poynter, or the Columbia Journalism Review. If you prefer a newsletter, I am partial to A Media Operator, Media Nut, and Simon Owens. For professional sites, you can’t go wrong with Digiday, What’s New in Publishing, or The Atlantic.

Plus, not only do media critics cover this issue widely in their columns, newspapers and websites themselves have made it nakedly clear that they need money.

Here in Seattle, The Seattle Times routinely takes out full-page ads asking for reader donations. And across the world, as evidenced by The Guardian banner below, just about every news site has a brightly colored call-to-action button emblazoned somewhere on its homepage asking for money.

It’s hard to imagine what more publications could do to broadcast their relationship with revenue, advertising, and subscriptions. Indeed, the problem isn’t that the issue is going under-reported; it’s that readers don’t care.

How else would you explain the 2018 Pew Research Center study that found that a majority of Americans (71%) thought their local newsrooms were doing well financially, when in fact local news organizations in general are struggling?

Or that 34% of Americans said in April of this year that they were unsure of what financial impact the coronavirus outbreak has had on news outlets?

To quote Canada’s greatest musical export, “Can I make it any more obvious?

What should publishers do?

This issue is frustrating in large part because it seems so easy to solve. Instead of getting hung up on incredulity — How can they not understand this? — it pays to look at this financial transparency issue as a light lift with a lucrative payoff.

Combating the hegemony of the Facebook/Google digital ad duopoly? A toughie. Explaining to readers how newspapers make money? Theoretically doable.

The key takeaway, though, is whatever the industry has been doing isn’t working. Articles that lay out the plight of publishers apparently don’t communicate the issue, and calls-to-action might pad the coffers, but they obviously fail to explain to readers the root of the industry’s financial problems.

Like Edison, who did not fail but simply found 10,000 ways that didn’t work, the journalism industry has apparently found 10,000,000,000,000 ways (and counting!) that haven’t worked yet.

Personally, I think BlockClub Chicago might be onto something, with its in-article metrics that help readers understand the sourcing and trustworthiness of a story.

Maybe some financial equivalent could help readers understand how their engagement with a piece turns into money?

Some part of me also thinks that the public is a few steps away from understanding simply because the journalism world is so rapidly, constantly changing. Just a few years ago, “clickbait” was the insult du jour, and publishers did employ strategies designed to rack up page views.

Now, the pivot to subscriptions has rendered page views a second-rate KPI, but many readers are still catching up to that fact. If we as an industry are so rapidly iterating, we might need to put more effort into making sure our readers are following along.

At the end of the day, their misunderstanding is our responsibility. If the industry can’t find a way to communicate its business model to its readers, maybe that’s an indication that something bigger is broken.

***

Some good readin’

— Everyone hates tech CEOs, but no one told Reed Hastings. (The Baffler)

— More and more journalists are unionizing. Here’s a good history of the practice, including why it’s growing popular now. (Nieman Lab)

— A great piece from The New Yorker that should serve as your periodic reminder: Many disabled people are only disabled because we design things that exclude them. (The New Yorker)


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Cover image: “The Money Changer and His Wife,” by Marinus van Reymerswaele

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