Michael Schudson’s Discovering the News is a compelling history of the rise of newspapers that almost directly mirrors the evolution in pricing and formats we’re seeing today in online media. This mirroring can be seen both in the rise of advertising as a primary revenue source and the transition to mobile, and by mobile I mean public transportation.
Ad Revenues in the 1800s
The mid-1800s saw the emergence of a new kind of newspaper that went for broader scale of distribution through cheaper pricing.
The penny papers made their way in the world by seeking large circulation and the advertising it attracted, rather than by trusting subscription fees and subsidies from political parties. (p. 18)
To make this transition, advertising took on a more “democratic cast.” (p.19)
…older journals had often refused to print ads for what they believed to be objectionable advertising….The penny press, in contract, was not fussy about who advertised in its columns. Penny papers where self-righteous in defending their wide-open practices…(p. 19)
What is now common practice first arose during this period. AdSense, or ad networks, are perhaps the ultimate in democratization, as editors literally do not know what ads will fill in available units.
I would pair this democratic view of advertising and the rigid line between editorial and advertising with a firm belief in the importance of great creative advertising that people are compelled to share.
One could even say that the move to advertising as informational content has its antecedents to the late 1800s.
When [Adolph] Ochs took over the Times in 1896, he inaugurated publication each day of a list of out-of-town buyers in the city, he began to report on real estate transactions, expanded financial reporting of the paper…(p. 108)
The first innovation listed, the list of out-of-town buyers, really strikes me as pretty novel and useful. While I think this was an editorial feature, it certainly shows early signs of how business and commerce could be used as a form of information. You could also imagine that this list was widely discussed, a form of social “business” content.
More to the point, advertorials and the “journalizing” of advertising copy under greats like John Wanamaker, the department store baron, arose during this period. (p. 78)
Pricing, Subscriptions, and Ad Expansion
The friction between subscription prices (paywalls) and scale for advertising was a fixture of the period as well.
Originally started as a penny press, The New York Daily Times, in 1851, the "Daily"was dropped in 1857, and the paper became The New York Times. The price eventually rose to 3 cents.
However, in the context of increased competition, in 1898, Ochs dropped the price from 3 cents to a penny, jumping circulation from 25,000 to 75,000 in one year. Ochs even ran a contest, offering bike tours in France and England to the 100 readers bringing in the most subscribers.
Similar to current arguments for a paywall:
...some critics suggested that the drop in price would reduce the value of the Times to advertisers seeking an exclusive readership, it seems only to have enhanced the Times' reputation with advertisers.
Ad lines were stagnant at 2.4 million in 1897 and 1898, but The Times ramped up the volume of ads dramatically to 23.4 million in the next two decades (p. 111- 114).
This increase was part of an industry-wide trend to more advertising, as advertising became the mainstay of the industry:
The ratio of editorial matter to advertising in the newspaper changed from about 70-30 to 50-50 or lower. Advertising revenue represented 44 percent of total newspaper income in 1880, 55 percent by 1900….Newspapers no longer could judge their advertisers from on high; they were themselves judged by the advertisers. (p. 93)
By the turn of the century, advertising was big and here to stay.
Taken in context with the later moves over half a century later to roll out “softer sections" like Travel and Food, The Times and newspapers in general have consistently been business innovators (in price and function) during periods of transition.We see this next in mobile.
By the turn of the century, streetcars and buses transformed media consumption.
George Juergens has suggested that the World’s change to a sensational style and layout was adapted to the needs of commuters; reading on the bus was difficult with small print and large-sized pages of most papers. So the World reduced the size of the page, increased the size of the headlines and the use of pictures… (p.103)
It’s as if you were reading about web publications making the transition to mobile. Cities and public transportation literally changed reading habits, and the entire format of newspapers, and no doubt the ads, had to change to suit consumption. Ignoring the buses and trains would have been tantamount to ignoring the iPhone.
Professor Paul Starr once told me that any time someone said that something was happening for the first time or was totally new, look to history. This idea has stuck with me. In every debate or transition, there are historical antecedents to which to refer. You just need to look.
The news business has always been adaptive and innovative in terms of pricing models, advertising, formats, and content types. It is, historically, a highly innovative and changing industry. And it seems consistent that these innovations drive new cycles of reader engagement and industry prosperity.