Hidden business model of your favourite news media company
November 9, 2023: When you are watching news on TV or reading the newspaper, do you know that you are not a customer; you are a product? Think about how a news media company makes money. What is its business model? Most people think it sells news to the public and it also earns from advertisements. The truth is, this understanding is completely wrong. This is not the business model of any news media company. Its real business model will shock you.
A news media company don’t sell news to you as a product. You are not its customers. Instead, you are the product – you as a viewer, as a reader, as a subscriber. For each and every news media company, you are the product that is sold. And you are sold off for big money to whom? To advertisers.
Let’s look at how this whole thing works, step by step. Say, a news media company owns a TV channel, a daily newspaper, and a mobile phone app. Step one, the media company has a team of field reporters or journalists. The journalists are sent out to cover daily events. Some of those developments matter to you. Most of them don’t.
Next, the news media company has an editorial team. Its job is to turn the coverage of daily events into flashy and interesting news. After that, the edited news is broadcast on the media company’s news channel, published in its newspaper, and posted on its mobile phone app. Like you, millions of people track the news on TV, newspapers, and on mobile phones.
The next step onwards, the real business begins. In the next step, the marketing department steps in. Now that millions of people have seen the news, the marketing team makes a detailed note of how many people watched the news on TV, how many read it in the newspaper, and how many tracked it on their phone. Basically, the marketing team compiles all the attention that the news received from the public. The collective attention is called viewership numbers and readership numbers. So, the collective attention – which includes your attention as a reader or viewer – is packaged and placed in front of various companies.
News media company and your ‘attention’
The marketing team tells the companies – ‘look, here is the deep and wide attention that the news we present receives from the public. Therefore, since we attract a lot of eyeballs on our TV channel, newspaper, and mobile app, why don’t you advertise your products and services on our platforms? You pay us advertisement money; here are the rates. And in return, you get the full attention of millions of people. We guarantee their attention because we have a dedicated viewership base and readership base, who are loyal followers of our journalism. When they watch news on our TV channel, newspaper, and mobile app, we will display your advertisements. And you can instantly turn millions of people into your customers, in return for the ad money you give us’.
That, precisely, is the actual business model of all media companies that are commercially run. When they sell news to you, it’s just their secondary business. Their main business model is to sell you, or your attention, to advertisers for big money.
The bigger the media outlet, the more is its viewership and readership base. Which means it has a bigger and wider attention package to sell. And the bigger the attention package, the higher the advertisement rates. Why? Because companies that advertise on popular media outlets get high returns – they get to display their products and services to large audiences. Through ads played repeatedly on TV news channels during primetime programmes. Through ads published on the front pages and important sections of newspapers. Through ads displayed with the news published on mobile apps.
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