News itself is a very paradoxical commodity. It always ‘needs’ to be read; it is always in some kind of demand from below. But there is always someone from above who wants to pay for certain news to be delivered to the public. A chapter from “Postjournalism and the death of newspapers” (2020).
Informing people is seen by default as the foundation, justification and social mission of media business. According to this view, journalism is supposed to sell news. However, it has never happened in the pure form. Even in cases when journalism was intended to be paid from below, historically it always ended up being paid from above; meaning not by those who want to receive information but by those who want to disseminate information.
Even the ‘purely’ news-selling business of the early Venetian handwritten newsletters in the 16th century was immediately acculturated by power. As Hotten accounted,
In 1536 the Venetian possessions and factories in the East were attacked by the Turks <…>. As may be imagined, the people of Venice were extremely anxious to hear the news from fleet; so the first regular monthly journal was established by the government to supply this information, and men were paid to read the particulars at the principle points of the city. But the heads of the Republic were fearful of the spread of the false news and opinions dangerous to their position, so they ordained that no sheets should be issued but such as were sanctioned by the Doge and his Council. (Hotten, 1874, p. 8-9.)
It is indeed fascinating how an account from 1874 regarding events of 1536 mirrors the issues of 2017, when ‘fake news’ was named the ‘word of the year’ by Collins Dictionary. The network of alternative news was considered to supply false news that endangered the established institutions. The ruling class discussed (and applied) measures to regulate this alternative news environment by introducing mechanisms of content filtering and restriction. The same issues and solutions are now discussed regarding the alternative news environment of Facebook and other social media.
Those early seaport newsletters of the 16th–17th centuries – the Venetian avvisi and Amsterdam’s first newspaper Courante – were all immediately appropriated by the elites to deliver something else. The alleged news business was always just a carrier for something else to be delivered – some other good (advertising) or built-in agendas of political patrons.
The identification of a purely news business (or the purely informational function of journalism) would be simple. This journalism should be paid predominantly or even exclusively from below, by readers who consume news to stay updated on affairs or just out of curiosity. The role of the payer is crucial for defining the function of journalism.
News itself is a very paradoxical commodity. It always ‘needs’ to be read; it is always in some kind of demand from below. But there is always someone from above who wants to pay for certain news to be delivered to the public. And those from above – those in power or advertisers – want to pay to deliver the right news much more than those from below, who are willing and able to pay to receive news.
The value of news as a carrier for agendas and advertisements is much higher than the value of news as a commodity in its own right. As a result, the audience always surrenders the right to pay for news to those from above. The elites and advertisers reorganize journalism into a subsidized news service in which news becomes a sort of chum for attracting fish to gather around.
The pay from above takes over the pay from below also because of its higher economic efficiency for the media. Transaction costs in retail are always higher than in wholesaling. Collecting a small fee from the widespread audience requires an additional costly infrastructure; the wholesaling of the audience to a smaller number of big payers is much more cost-efficient.
All things being equal, newspapers that only sell news to readers will lose out to newspapers that sell news to readers and sell readers to advertisers (or political sponsors). The business model encompassing both news retail and audience wholesaling is always a better commercial strategy than just news retail. Hence, from a commercial perspective, any newspaper, if it is offered such a business opportunity, will readily switch from news retail to audience wholesaling.
As such, historically, this became the typical outcome. There was always someone from above who came and forced or seduced the media to sell the audience upwards, not news downwards. First, these were political patrons, then political parties, then advertisers. The physically dispersed nature of the audience, the high cost of retail money collection, the political and financial persuasiveness of the elites and the organizational specificity of news business have made journalism predominantly paid from above throughout its history.
The occasions when journalism tried to earn money from serving the audience, not the elites, meaning predominantly selling news downwards and not agendas upwards, did not last long. The first news bureaus in the 16th century, the Venetian and Roman Scrittoria, aimed to produce news purely for the sale of that news. The noble houses and members of the elites were the first end-users and they quickly realized the importance of spreading the ‘right’ news. Politics swallowed news business because politics is always the best business of all.
The next attempts to make journalism being paid from below happened in the late 19th century.
Everyone knows that Gutenberg’s printing press enabled the Scientific Revolution and the Protestant Reformation, but few are aware that newspapers became the true mass media because of a sequence of relatively small technological improvements in the 19th century.
A series of inventions in the course of the 19th century, as discussed in the previous chapter, introduced the cylinder press powered by the steam engine, the rotary printing press, wood-pulp paper, and, finally, the linotype. These inventions significantly reduced the production cost of books and newspapers, and dramatically increased their speed of production. The advent of quickly printed cheap newspapers made large scale circulation not only possible but inevitable.
This spurred major structural changes in the offerings of the printed press, facilitating the appearance of the likes of ‘penny press’ and ‘labor press’. With the advent of cheaper and more affordable newspapers journalism, once again, attempted to sell news to the end user, rather than agendas to the elites. This did not stem from someone’s noble intent to free journalism from elites’ control; this was a business opportunity created by the low production cost.
The penny press appeared in the USA in the 1830s. These papers sold for only one cent – compared to six cents for regular old newspapers (Kaplan, 2013, p. 6). They represented a completely different business model. The cheaper production expenses lowered the cost to enter the newspaper market. “Newspapers’ prices were dropping, yet publishers did not require extensive capital to reach and hold a readership,” as Kaplan wrote (Ibid., p. 7). Reader revenue drove the development of the mass newspapers, and the growing circulation attracted advertisers.
The switch in the media’s business model from dependence on political parties to dependence on the audience changed the nature of media coverage. Pre-existing newspapers had been partisan propaganda outlets maintained by political parties or politicians. As journalism historian Barbara Friedman stated, “Political parties considered newspapers as extensions of what they did. They were tools. The point was to discredit and even savage the opponent with falsehoods”. The penny press papers “revolutionized content by declaring their independence from political parties and concentrating on news rather than opinion” (Nerone, 1987, p. 378).
Reliance on mass opinion and financial sustainability made newspapers independent from direct political subsidies and party control. Kaplan pointed out that the economic transformation of the daily paper from partisanship to appealing to the broader masses changed papers’ political identity and rhetoric. The new business model changed journalism. “No longer dependent upon party subsidies but instead driven by the profits to be gained from large circulation and advertising,” wrote Kaplan, “<Papers> … embraced political independence, even objectivity. Papers ceased to address their audience in political terms – neither as citizens, nor as fellow partisans – but instead as consumers” (Kaplan, 2013, p.13).
The tabloids and yellow press originated from this type of journalism. Furthermore, investigative journalism is also rooted in the penny press. Journalism, in general, learnt to pay more attention to the interests of the audience it served.
Catering to the tastes of the crowd for better copy sales, the penny press directed much of their attention toward criminal stories. The inclination for the mass-circulation newspapers to attract their readers through coverage of sensational crime stories is notoriously illustrated by the media hysteria whipped up around the murders of London prostitutes in the 1880s by the mysterious “Jack the Ripper”, perhaps the first world-renown media criminal.
The heightened interest in crimes prompted journalists to acquire the methods and very investigative mindset of the police and private detectives. The first investigative journalists were pushed not so much by social consciousness but by market competition, which forced them to dig deeper to find sensational cases and atrocities hidden from the public. This was what made their names and consequently increased their earnings.
With the further growth of newsrooms’ financial independence and urban-class demand for social justice, the principle of investigative journalism turned toward social issues and conflicts, paving the way for muckraking journalism in the early 20th century and then contemporary watchdog journalism.
The penny press also signified the final shift of the media from an artisan type of professional activity to an industrial business. The mass media became a ‘culture industry’, perhaps the first of a kind, precisely in the sense that Horkheimer and Adorno (1947) assigned to that notion: not just a serving an ideological mechanism but a sustainable capitalist industry in its own right.
This continuing reduction in production costs resulted in greater circulation figures, which made advertising more efficient, thus attracting ever more advertisers. In addition, by the end of the 19th century, the economy in general moved towards a mass-market consumer society, with its growing reliance on advertising. Consequently, this maximization of the audience morphed the business into selling this audience to the advertisers rather than selling news to the audience.
Gross advertising income between 1870 – 1880 for the mass American newspapers increased from 40% to more than 50%, subsequently rising to 60–70% by the 1900s, a level at which it remained throughout the twentieth century (Kaplan, 2013, p. 12). The new, purely commercial form of the media’s dependence on the elites was formed, which was later described by Herman and Chomsky as the Propaganda model (1988).
Whilst the penny press’s attempt to escape from being paid from above may have failed, it nevertheless changed the media environment by making journalism independent from direct political control. The relations in the love triangle of ‘the media – the masses – the elites’ thus became more complicated.
More on the state of the arts:
 Seidenberg, Steven. (2017, July 1). “Fake news has long held a role in American history.” ABA Journal. http://www.abajournal.com/magazine/article/history_fake_news