Journalism’s super-spenders and the new subscription economy

It'll take a lot more than direct subscriber support to save local news.

Testoon of Henry VIII (third coinage), 1509–47. (The Metropolitan Museum of Art)

It feels stupidly obvious to even point out, but it would be slightly easier to save journalism if consumers had more money to pay for journalism.

When I was a decently compensated staff writer for the Los Angeles Times (unionize your workplaces, folks), I happily chipped out pieces of my paycheck to follow Ed Yong’s work on COVID-19 at The Atlantic and Eric Levitz’s interpretations of Bidenomics at New York Magazine.

But when a crunch hits the household, lowered standards of living are deadly for readers’ purchasing power. After I took a buyout from The Times last year and prepared to go several months without a regular paycheck, I slashed subscriptions that weren’t must-haves. News paywalls returned in front of me like glass windows at a Barneys.

In slipshod ways, I still got basic information I wanted. But now my consumption was being subsidized: by friends who loaned me passwords (sorry!) and by the working journalists (double sorry!) whose ability to secure raises or keep their jobs was fractionally suppressed by my unwillingness to pay for their work.

(If you take anything from my newsletters, it’s that there’s no such thing as “free” journalism. We live in capitalism. Somebody, somewhere, is always paying.)

When my income picked back up again — I’m the new Director of Policy at Rebuild Local News, by the way! — the peanut butter sandwiches faded out and the premium subscriptions came back. I don’t live in Long Beach but plunked down for on a yearlong subscription to support the Long Beach Watchdog, a journalist-owned local news cooperative. I deleted TikTok and, as a luxury, added print subscriptions for London Review of Books and the Weekend FT.

In one unusual episode last year, whose significance I didn’t realize until later, I pointed my paring knife at my longtime subscription to the New York Times — which smartly asked me in a prompt why I was canceling. The Times successfully counter-offered with a rock-bottom rate when I cited “unemployment” as the reason.

For the year that followed, my NYT reading habit was fully subsidized by other subscribers, but this time above-the-table. The New York Times’ wager on me worked, and I’m paying the Sulzbergers full freight again. My subscriber dollars now presumably pay it forward for the other readers who have lost their federal government jobs or other readers cadging passwords from their own friends.

That’s how, as a media consumer, I participate in a U.S. economy increasingly structured around super-spenders, reflected in the proliferation of tiered pricing and exclusive experiences. In the indie world, you’ll see this reflected in the layered pricing for Substacks and Patreons.

Consumers pick up more of the tab for local journalism

Local newspapers were way ahead of the curve adapting to consumer inequality by using dynamic pricing models that levy far heavier subscriber prices on the news fans least likely to cancel. The unknown tens of thousands of super-spenders doling out more than $1,000 annually on print newspapers are local journalism’s most reliable and valuable philanthropists (though some of these costs reflect the growing costs of print production and delivery).

These print subscribers are the biggest civic linchpins propping up news production that benefits everybody. These print readers are also subsidizing many younger and poorer/stingier fellow subscribers, whose own digital subscription rates are often about six times cheaper than their print delivery equivalents.

Table of newspaper print subscription prices from “Unraveling US Newspapers’ Digital and Print Subscriptons in the Context of Price, 2016–2022,” by Hsiang Iris Chyi and Sun Ho Jeong, “Media and Communication,” 2024.

Except those newsprint super-spenders usually don’t think of themselves as philanthropists or even as super-spenders. The morality of discriminatory pricing by newspapers (especially when you look at which companies are doing it most aggressively) is, uh, grey, at best, particularly due to its tendency to extract the most from a slowly disappearing class of grey-haired news consumers whose news habits and loyalties got locked in a long time ago.

But here’s a stat that might blow your mind: Relative to overall consumption, household spending by Americans on newspapers and periodicals is now back at its highest point since 2007, according to consumer data from the U.S. Bureau of Economic Analysis:

Real personal consumption in chained dollars of newspapers and periodicals, divided by overall personal consumption expenditures, 2007-2024. (Matt Pearce / National Income and Product Account Table 2.4.6U, U.S. Bureau of Economic Analysis.)

Relative consumer spending on newspapers and periodicals had hit rock bottom in 2015. That eye-popping pricing surge by newspapers in the late 2010s (and the monster news year of 2020) helped claw back the kind of household dollars increasingly spent on non-journalistic stuff like Netflix subscriptions. One of the economic lessons here seems to be that discriminatory pricing, well, works.

But where are all the journalists?

The obvious problem with these numbers is that the return of 2007 levels of newspaper and periodical consumer spending hasn’t remotely corresponded with having 2007 levels of journalist employment.

Some of this you can blame on the particularly extractive nature of concentrated local news ownership by publicly traded companies, hedge funds, and private equity.

But not completely: Wall Street reinvests in the local news industry via our burgeoning nonprofit news sector, where the majority of charitable giving comes from foundations and major donors. This kind of journalism giving is often powered by — you guessed it — returns from publicly traded companies, hedge funds and private equity. (The American economy taketh away, and then giveth.)

Still, there’s something bigger going on that’s beyond consumers’ direct control.

Let’s just look at the difference in revenue sources between the New York Times Company’s annual financial reports between 2007 and 2024:

New York Times Company subscription (circulation) revenue and advertising revenue, 2007 and 2024 annual financial reports. (Matt Pearce / New York Times Co.)

The NYT has been the big winner of the upmarket digital news subscription economy, which is reflected in its subscription revenue growth. The NYT has a global readership that probably dwarfs anything in the history of the company or even the American news industry.

But if you’re a CEO looking at this stupidly simple chart, the first thing you notice is the five-alarm fire happening with ad revenue.

If you were a journalism company in 2007, you had a much better business to work with: The other 99% of non-journalistic U.S. consumer spending was also subsidizing journalism in the form of consumer advertising — before those ad dollars evacuated from the media industry to Big Tech monopolies like Google, probably illegally. (A fraction of those monopoly dollars also return to the U.S. news industry via charity, in the form of Google News Initiative grants.)

But what this all suggests is that, in a world without ad revenue, it’s not even enough to ask American consumers to go back to 20th-century levels of spending on news. We’d need Americans to spend far, far more of their household budgets on journalism. That’s a daunting proposition.

One way is through taxes and public spending. The U.S. spends $3.16 on public media per citizen, compared to $110.73 in Norway, $26.51 in Canada, $81.30 in the U.K. and $142.42 in Germany, according to 2021 research by Timothy Neff and Victor Pickard.

But getting some of that cash back from ad monopolies seems like a good idea too.