IN THE EARLY 17th century the best place to gather news in London was the old cathedral of St Paul’s, a place that buzzed with gossip on politics and was described—unusually for a house of worship—as “the ear’s brothel”. Some of the informants were entrepreneurs; they had recently started writing “letters of news” which they sold to subscribers at a hefty price. Some 400 years later, the original newspaper business model is finally making a comeback.
The reason it has taken so long to resurface is that, for almost two centuries, newspapers have been on a journey into the mass market which gave them scale, prestige and profit but which has now reached its end. They mostly abandoned dependence on subscriptions and instead sold below what they cost to produce as a way to attract legions of readers to sell to advertisers. The aphorism today applied to users of technology platforms—“If you are not paying, you are the product”—rang almost as true of newspaper readers in the heyday of print advertising.
No longer. Since the internet took off, the print media’s advertising-supported business model has floundered. In the past 20 years newspapers’ ad revenues in America have fallen by about 80% (to Depression-era levels), while circulation has roughly fallen by half. Though online traffic has surged, revenue from digital…