If you want the pithiest summation of the problem facing modern journalism, here it is: dollars in print, dimes on the Web, pennies on mobile.
That’s advertising revenue we’re talking about. Journalism is what economists call a “two-sided market”: Media companies sell news and entertainment to you, and they sell you to advertisers. Outside of some specialty trade publications, subscriptions have never covered the cost of producing newspapers and magazines. In fact, they rarely exceed the cost of printing and mailing the things. The actual work of reporting has always been paid for by the advertisers.
The Web has slashed the costs of distributing our product, but it hasn’t done that much to change the cost of gathering the news. Oh, sure, there was fat in the industry, accumulated during flush times; journalists still get kind of misty when they hear the words “Time magazine drinks cart.” But researching, reporting and writing stories consume a surprising amount of time and money. Readers are always shocked when I tell them how much effort goes into producing a single 2,500-word feature.
The problem is, advertising dollars are shrinking. We just can’t charge as much for Web advertising as we used to for print advertising. A decade ago, when I entered professional journalism and began earnestly discussing its financial future, there was a reasonable case that, eventually, digital advertising would be worth more than print advertising — you could precisely target it, after all, and measure its effects. As soon as we got better at building digital ad products and educated advertisers, in theory we’d be in better shape than ever.