Diversification is good: emerging business models for local news media

Danielle Borges and Urbano Reviglio – CMPF Research Associates

Before the arrival of the internet and digital platforms, media companies were largely funded by advertising revenues by exploiting economies of scope through bundling with other content, such as entertainment and sports (OECD, 2021). This model has provided a solution to the financing of public interest journalism for almost a century. However, the sustainability of news media has been severely affected by new technologies; increased competition by free dailies, Internet, and multiple TV and radio sources, coupled with the decline in advertising revenues and changes in readership habits, leading to an economic downturn in this industry. This transformation changes the conditions for economic sustainability of news media.

A recent report from the Council of Europe on “Good practices for sustainable news media financing” (2023) has defined sustainability as “the ability to make a media business model viable in the long term and create the conditions to be resilient, so as to effectively face changes and challenges”. This report elaborates a taxonomy of revenue streams and sources (see Figure 1), showing, however, that “no single model can be deemed the successful one in replacing the advertising-based traditional model of funding”. In addition, the sustainability of the media system also entails the ability to continue to provide to a wide audience sufficient scale and variety of quality content, especially of news and informative content. This challenge appears to be even more severe for local news media. Indeed, the changes in the consumption and distribution of news content have affected the news media industry as a whole, but particularly regional and local media (Ibid, p. 40), with many newspapers forced to shut their doors permanently (Matsa & Worden, 2022). Moreover, success in diversifying revenue streams also depends on the size and nature of the markets, and the reach, resources and size of the news organisations, and local newspapers that were already slow in switching to online distribution, found themselves in a dire situation (Cawley, 2019).

         Figure 1. A taxonomy of revenue streams and sources (Brogi & Sjøvaag, 2023).

The Local Media for Democracy project revealed some features on the business models of local media outlets. In this blog post we look at the business models used by local media outlets in the EU obtained with the data collection carried out using the project’s questionnaire and focusing mainly on answers from the “Best practices and open public sphere” indicator (variables 53-54 of the questionnaire). This explains also the reason for not addressing all the business models described in Figure 1, but only those emerging from the analysis of such best practices, “experimenting with innovative responses to improve reach and audience, proposing new forms of work, journalistic products or services”, according to the LM4D questionnaire.

In this regard, according to our data collection, the subscriptions model has been identified in different local news media as their main source of revenue. This model can be defined as regular payments for access to paywalled content (Newman, 2018). This is, for example, the case of InsideStory from Athens, Greece,and Viernull from Dusselforf, Germany, interviewed for the LM4D project. A common aspect of these two news media outlets is that they produce weekly newsletters. In effect, newsletters have become a popular format in recent times, one that offers a high degree of targeting, curated content, distraction-free analysis and commentaries. Another popular format that works well with the subscriptions model are podcasts. This format demonstrates a greater degree of engagement and is a powerful tool for connecting with audiences, particularly younger ones (Reviglio & Borges, 2023). The potential demonstrated by these two new formats in enhancing the willingness to pay reflected on publishers investing more in podcasts and newsletters, as these two formats have proved to be successful in increasing loyalty and in attracting new subscribers (Newman, 2022).

Together with subscriptions, 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. However, we observed that among the news media interviewed for the project, some avoid this business model for two main reasons: first, because it may undermine the readers’ experience and, second, for editorial independence concerns.

Another model identified in the context of the LM4D project is the membership model. Different from the subscription model, membership can be defined as a regular fee paid by loyal users to keep the news publication or website free for all. Membership is usually not used alone by media companies, but as part of a mixed-model that can also combine subscriptions and advertising revenues. The membership model is based on the sense of a “community of readers” sustaining the outlet. For this reason, the 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. One of the local news media providers identified by the LM4D using membership as one of its revenue streams is Zebra., a non-profit street newspaper from Bressanone, Italy (Südtirol), that has been producing since 2014 monthly bilingual news – in German and Italian – in the format of a magazine. In the case of Zebra, membership is part of a revenue model that also combines advertising and sales. Similarly, Freedom Letter from Denmark, an online news media founded in 2021, has membership as its main source of revenue.

Departing from a similar idea of community embedded in the membership model, crowdfunding has also been used to fund local media outlets. The process of crowdfunding uses the network (community) to make an open call to receive funds from the “crowd”. The investment raised by the crowdfunding campaign is then used to finance an initiative supported by those who contributed to the campaign fund. In the case of local media, these campaigns are often used to start new local journalism initiatives. As Carvajal et al. (2012, p. 641) explain, crowdfunding is not a donation nor an investment, as backers always receive rewards in exchange for the money provided or project they funded, but they are not investors, because they do not generally obtain financial benefits, and are not shareholders. In the LM4D project we came across some local media providers which initiated their activities raising funds through crowdfunding campaigns. Some examples are the journal RUMS, from Münster, and the magazine KATAPULT from Greifswald, both in Germany.

Another source of funding currently used by local media are grant opportunities offered by public institutions at national level. This is the case of the Journalism Incentive Fund in the Netherlands which financed, for instance, Spot On Stories, a collective of independent freelance investigative journalists that produces research stories in the province of North Brabant and presents them in an understandable and innovative way.  In the same lines, the Danish Media Agreement for 2023-2026 provides for more subsidies, grants and financial support for regional and local media,[1] and has funded, for instance, Zetland, an online news media founded in Copenhagen in 2016, identified during the LM4D data collection.

Local news outlets can also receive support from public entities at EU level, in the form of grants. 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 EC and awarded grants to small media outlets and freelance journalist groups from around Europe.[2] 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 (European Commission, 2022). Local news media providers identified by the LM4D data collection which received this type of funds include  Nyomtassteis, a non-profit media provider from Hungary founded in 2017, which assembles a weekly newsletter that usually contains 6 different topics, which was awarded with an Open Society Grant, and Dublin Inquirer, a local newspaper from Ireland, founded in 2015, dedicated to quality public-interest journalism, publishing online weekly and in print monthly, awarded with a Journalismfund grant.

A further source of private subsidies for local news are those offered by digital platforms, such as the Google News Initiative and the Meta Journalism Project, though the LM4D. From the LM4D data collection we identified news outlets that were awarded the Google News Initiative funds. This is the case of VOL.AT from Austria and of Denník N from Slovakia. However, funds provided by digital platforms tend to focus on short term projects that have some commercial aim or outcome or to go to mature larger media markets with economies of scale. Moreover, as Gulyas (2023, p. 15) sustains, the selective support for local journalism by large digital platforms raises questions regarding their motivations, suggesting that they primarily prioritise supporting initiatives that align with their interests.


Ensuring media sustainability is crucial for the health of democracy. The digital transition, however, has disrupted the traditional business model based on advertising revenues, threatening the survival of news media, especially local ones. Although subscriptions can be considered a desirable business model, getting users to pay for news has proved to be challenging and, ultimately, insufficient. Advertising, on the other hand, faces the fierce competition with digital platforms, and the related dependence in terms of obtaining visibility, representing, thus, a structural limitation of this model. 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. Such an experimental attitude, nonetheless, is likely to be insufficient without more systemic support from public institutions. Amongst new policy approaches to enhance sustainability of the media, there is room for taxation measures, notably tax-incentives to enable more news media organisations to assume non-profit status, and, conversely, taxing digital services to funnel new funds to support public interest journalism. Further research is clearly needed to solidify our understanding of  the challenges and opportunities sourrounding local media’s economic sustainability.

This blog post has been written in the context of the Local Media for Democracy (LM4D) project. It is the third of a series of three: please read our previous ones, ‘Newsletters, podcasts and slow media: successful news media strategies to engage audiences in the attention economy‘ and ‘Networking for public-interest: unveiling local media strategies for social change‘.


Brogi, E., & Sjøvaag, H. (2023). Good practices for sustainable news media financing Final Draft. Council of Europe, Prepared by the Committee of experts on increasing resilience of media (MSI-RES), MSI-RES(2022)08, 16 November 2023.

Carvajal, M., García-Avilés, J. A., & González, J. L. (2012). Crowdfunding and non-profit media: The emergence of new models for public interest journalism. Journalism practice, 6(5-6), 638-647.

European Commission, Directorate-General for Communications Networks, Content and Technology (2023) Study on media plurality and diversity online – Final report, Publications Office of the European Union, 2022, https://data.europa.eu/doi/10.2759/529019

European Commission, Directorate-General for Communications Networks, Content and Technology (2023) The competitiveness and economic viability of the news media sector in the EU – Final report, Publications Office of the European Union, 2023, https://data.europa.eu/doi/10.2759/803098

Gulyas, A. (2023) Local and community media in Europe. A comparative analysis of the Media Pluralism Monitor data between 2020 and 2023 (Research Project Report, October 2023).

Newman, N. (2018) Journalism, Media, and Technology Trends and Predictions 2018 (The Reuters Institute for the Study of Journalism, University of Oxford).

Newman, N. (2022) Journalism, Media, and Technology Trends and Predictions. Digital News Project, Reuters Institute for the Study of Journalism.

OECD (2021), Competition issues concerning news media and digital platforms, OECD Competition Committee Discussion Paper,  https://www.oecd.org/daf/competition/competition-issues-in-news-media-and-digitalplatforms.htm

Matsa, K. E. & Worden, K. (2022) Local Newspapers Fact Sheet (State of the News Media (Project, Pew Research Centre) Available at Local Newspapers Fact Sheet | Pew Research Center

Reviglio, U. & Borges, D. (2023) Newsletters, podcasts and slow media: successful news media strategies to engage audiences in the attention economy (Blog post published at the CMPF website https://cmpf.eui.eu/newsletters-podcasts-and-slow-media/ )

[1] For details on the Danish Media Agreement, check Medieaftale for 2023-2026: Samling om frie medier og stærkt dansk indhold

[2] See https://cmpf.eui.eu/local-media-awarded-funds-to-improve-reporting/