How News Media Makes Money — By Selling You To Advertisers

How News Media Makes Money: You are the product

Nadim Siraj

November 19, 2023: When you’re watching news on TV or reading the newspaper, do you know that you’re not a customer — you are a product? Have you ever deeply thought about how media companies make money? What is your actual relationship with your favourite media outlets?

Most people think media outlets sell news to the public and they also earn money from advertisements. The truth is, this understanding is completely wrong. This is not their business model. Their real business model will leave you in a state of shock and disbelief.

Media companies don’t sell news to you as a product. You are not their customers. Instead, you are the product – you as a viewer, as a reader, or as a subscriber. For media companies, you are the product that is sold in the marketplace. And you are sold off – for big money – to whom? To advertisers.

Let us deep-dive into the topic and explore the untold business model of your favourite news platforms. There are many of you who feel that daily news is not just information but also propaganda, at times. This special report takes you further beyond this propaganda role of daily news. You will know how news media companies trade you for big money without you even noticing it. So, here’s how news media makes money.

When people watch news on TV, they think they are consuming news as a product because they have paid for it. People pay for the TV channel package, or they pay the internet service provider for access to news channels. So, as viewers, people think they are buying news by making a certain payment. Therefore, they are the customers and media outlets are the sellers.

It’s the same perception with newspapers and magazines. Buyers and subscribers think they are purchasing news as a product after paying the delivery guy for the newspaper or after paying for the magazine at the newsstand. Readers think the newspaper or magazine company is the seller and they are the customers, buying the printed news.

It’s the same story with social media platforms. When you track developments on news websites and mobile phone apps, you think you have paid for the data package to get access to those platforms; and therefore, you are a customer who buys news online.

Reality about how news media makes money

In reality, this observation is wrong. Readers, viewers, and subscribers are buying the news, that’s true. But this is not the main business model of media companies. It is only an additional income model, or a bonus. The main focus of a media outlet is to groom you and mould you to become a product. All their efforts go into turning you into a high-paying finished product.

Once media companies have turned you into a finished product, they carefully package you, and deliver you to advertisers for a hefty price – that’s their main source of income. So, the media company is the seller. The advertiser is the buyer. And you are the product that the advertiser buys from the media company.

This whole idea sounds absurd, outlandish, and theoretical, right? Well, that’s natural because you are never given the true picture of how the news media business works. Let me explain it to you more simply.

It’s not you as a physical being who is being sold here. By ‘you’, we mean your personal attention that is being sold here. The personal attention that you are giving to the news while you are tracking or consuming it. That attention is the product here. You can also call it your consciousness, your gaze, or your interest in the news that the media outlets are offering.

Your attention = Raw material

When you are busy watching news on TV or reading the newspaper, or browsing news on your phone, you are dedicating time and attention. So, the television set, or the newspaper pages, or your phone’s screen is holding your attention for a certain period of time. That attention span is the raw material for the media companies. Their entire business relies on your attention span – the raw material.

Let’s look at how this whole thing works, step by step. Say, a media company owns a TV news channel, a daily newspaper, and a news 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 media company has an editorial team. Its job is to turn the coverage of daily events into flashy, interesting, and engaging news. The work of the editorial team is a vitally important stage of the business model because the more gripping the final presentation of the news is, the more attention it will grab from viewers or readers.

After that, the edited and polished news is broadcast on the media company’s news channel, published in its newspaper, and posted on its mobile phone app. Just like you, lakhs or even crores of people will track that news on TV, in the newspapers, and on their phones. This is the stage when the ‘attention span’ is created.

The next step onwards, the real business begins. In the next step, the media company’s marketing department takes over. Now that millions of people have seen the news, and therefore, have given due attention to it, the marketing team makes a detailed note of how many people watched the news on TV, how many read it in the newspaper, how many tracked it on their phone, and how many people shared it around.

Attention economy in media business

Basically, the marketing team compiles all the attention that the news has received from the public. This collective attention is called viewership and readership. So, the collective attention – which includes your attention as a reader or viewer – is packaged by the marketing team, and placed in front of various companies. What kind of companies? Those looking for platforms or avenues through which they can advertise their products and services to the public.

The marketing team tells these companies – ‘Look, here is the wide attention the news we present receives from the public. Therefore, since we attract a lot of eyeballs on our TV channel, newspaper, and news app, why don’t you advertise your offerings on our platforms? You can pay us advertisement money at designated rates. In return, you will get the full attention of lakhs of people. We guarantee that your offerings will get attention because we have a dedicated viewership base and readership base who are loyal followers of our journalistic work. When they watch news on our TV channel, newspaper, and mobile app, we will display your advertisements. Lakhs of people will know about your offerings and become your customers. You will get all this in return for the advertisement money you are paying us.’

That, precisely, is the untold truth about how news media makes money. When they sell news to you, it’s their secondary business. Their main business model is to sell you, or your attention, to advertisers. The bigger the media outlet, the more is its viewership and readership. 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 highly popular media outlets get high returns – they get to display their products and services to larger audiences.

You’re paying instead of getting paid!

The news media business is unique. It’s the only industry where the people who supply raw materials end up paying money, instead of getting paid. If you are supplying fish to a restaurant, or leather to a football factory, you will get paid for what you supply, right?

But with the news media business, it’s the other way round. You, or your attention, is the raw material that the media companies are selling to advertisers for a lot of money. But you don’t get paid a single rupee from the transactions, even though it is your attention that is sold.

Ideally, every news media company should share a portion of the ad money with you since you are supplying the raw material. Instead, the opposite happens. You are supplying your precious attention to the media organisation as a raw material. And for doing that, you are paying money! How? You are paying to watch the news on TV, to buy the newspaper, to access the news app.

This is the absurd reality about the news media companies that they don’t want you to know. That’s because if you realise this, what will be your next move? Obviously, to seek payment from the media organisations for handing over your precious attention to them.

But you never really think about it this way. That’s because you have been strategically told to focus only on the journalistic work. So, what happens is, while you are focusing only on the news, you are made to believe you are a customer buying access to the news. You are never told that you yourself are on sale, and that you will never be compensated for it.

Now, let’s set aside this revelation about how news media makes money and look at the nature of mainstream journalism itself. If you think you are getting high-quality news from your favourite media outlets, there is a fundamental problem with that perception. The problem is that most media organisations, quite often, subtly push propaganda to you packaged as relevant or high-quality news. That is the sad reality of commercial journalism. You are not only handing over your precious attention to them; you are also at times getting fooled into consuming propaganda in the name of journalism.

Commercial vs Independent media: Same business model

In fact, it’s true not just for commercial news media companies. It’s the same story with some of the so-called nonprofit independent media outlets that run mainly on institutional donations. While a small fraction of the donations come from well-meaning, news-loving individuals, a large portion comes from interest groups.

These interest groups give institutional donations to the so-called independent media companies to get certain agenda-driven news to be shared with the public. Now, the bigger the audiences a so-called independent media outlet has, the bigger is the institutional donation that it receives. Why? Because bigger audiences mean wider attention. And wider collective attention is more precious; it can be sold off to the paymaster for more money. Here, the paymaster is the institutional donor with an agenda. And the money the donor pays is the donation.

(As an aside, there are a few media companies out there, such as EmpireDiaries.com, which rely entirely on non-institutional donations or individual-level donations to run as a strategy – thereby, ensuring they don’t serve any propaganda agenda of big paymasters, or don’t become platforms advertising typically corporate products and services.)

So, be it commercial or non-commercial news media companies, this is how news media makes money. Our advice to journalism junkies and news addicts out there – always remember these three things:

You are the product they are after. 

You are the product they need. 

You are the product that gives them the big bucks.

Next time when you are tracking news, remember these important words – you are not the customer, you are the product.

REPUBLISHING TERMS:
All rights to this content are reserved with Empire Diaries. If you want to republish this content in any form, in part or in full, please contact us at writetoempirediaries@gmail.com.

Click to Watch the Video Report: