Business models for local news in Europe: The need to diversify revenue streams
Changes in the consumption and distribution of news content has affected the news media industry, specifically local media. A latest report by the Centre for Media Pluralism and Media Freedom (CMPF) indicates that local media outlets are diversifying their revenue streams to replace the traditional advertising-based model of funding.
A subscriptions-based model is one of the more popular and reliable sources of long-term income. Podcasts are a format of subscriptions-based media that is a powerful tool for connecting with audiences, particularly younger listeners. Memberships are also used by local media to attract revenue. Different from the subscriptions-based model, it is based on the sense of a “community of readers” sustaining the outlet. Media providers using this model keep the community alive by organising events, such as meetings with editors and parties, or newsletters and podcasts as exclusive benefits for members.
Nonetheless, advertising is the most immediate revenue stream. Indeed, according to the European Industry Media Outlook (European Commission, 2023), advertising revenues in the EU account for nearly 40,8% of total revenues of publishers income, including both print and digital.
Crowdfunding has also been used to fund local media outlets and start new local journalism initiatives. Another source of funding currently used by local media are grant opportunities offered by public institutions at national level or the EU level. In the European context organisations or projects funding journalism with public funds from the European Commission include, for example, Journalismfund Europe, and Investigative Journalism for Europe (IJ4EU). Indeed, the LM4D project is funded by the EU and awarded grants to small media outlets and freelance journalist groups from around Europe.
Likewise, private entities can also provide funds for journalism, such as Open Society Foundations, Fritt Ord Foundation, Luminate, Adessium Foundation, Stavros Niarchos Foundation, Arcadia Fund, Bill & Melinda Gates, and more.
Ensuring media sustainability is crucial for the health of democracy. While membership, crowdfunding, donations and grants offer a great potential to support the development of local journalism, these, however, cannot work alone but only in combination with other revenue streams. Local news media not only need to diversify their revenue streams as much as possible but they also need to continually experiment in terms of news formats.
Read the CMPF blog post: https://cmpf.eui.eu/emerging-business-models-for-local-media/
This blog post is the third of a series of three that will explore best practices in the local and community media sector and offer some examples found across the European Union (EU). These blog posts explore the work of local and community media, beyond those included in the Media Funding Scheme of this project.
It is written as part of the Local Media for Democracy project; an 18-month project co-funded by the European Union and launched by a consortium of partners: Journalismfund Europe, the Centre for Media Pluralism and Media Freedom (CMPF), International Media Support (IMS), and the European Federation of Journalists (EFJ).
