The revenue model of Dutch journalism has died. The paper newspaper subscriptions of baby boomers actually act as a kind of trust fund for the industry that pays out some money each year, but also makes the industry lazy in the process. Someday that revenue source will run out and large newsrooms will be unfundable. What will take its place?
The demise of the paper newspaper has been predicted for years. And yet it is still here. In some ways, newspapers even seem more alive than ever. They are much more present online, with podcasts, beautiful visuals, clever social media posts. More and more people are subscribing to newspapers digitally as a result. The years of sanitization of newsrooms seem to be coming to an end, and there are still plenty of newspaper newsrooms with more than 100 journalists running around.
But those appearances are deceiving. The newspapers are already knee-deep in quicksand.
Is it bad when journalism disappears?
The publishers of paper newspapers and magazines are still a crucial link in society's information supply. They employ some 3,400 journalists who provide the bulk of Dutch newsgathering (by comparison, NOS News employs 462 people).
Two publishing groups call the shots in newspaper country. The market leader is DPG, which publishes de Volkskrant, AD, Trouw and Het Parool. Mediahuis is the second, with titles such as De Telegraaf and NRC.
Last year, all publishing companies in the Netherlands together earned 1.2 billion euros. If you take inflation into account, that's a more than halving in twenty years. That is a gigantic blow. The fact that the newspaper companies are still afloat is largely because (especially older) readers are still very attached to their paper newspapers. This has allowed them to raise prices significantly. The price of a newspaper has risen twice as fast as other products in recent years.
That provides additional revenue for publishers, but also raises the threshold for new subscribers. A subscription to one of the country's two largest newspapers - not even the most elite ones - is already around 600 euros a year.
And that while the reader - who spends all day on his or her phone anyway - can also devour exactly the same copy digitally. For only a quarter of the price.
That immediately shows the problem. While the number of digital subscribers is growing rapidly, the money that publishers bring in from those subscriptions is much less. Of the 1.2 billion euro turnover, more than 900 million comes from paper subscriptions and paper ads, according to figures from industry association NDP.
Too much ballast
Thus, if publishing houses had to live on digital revenue alone, they would never be able to keep such large editorial departments alive. What's added to that is that publishing houses employ not only journalists, but also a lot of other people. People who, for example, sell ads, do marketing, or print the newspapers. Only a third of what readers pay for their newspaper actually goes to journalism. With online competitors, readers get roughly twice as much journalism for their money.
In other words, paper newspaper companies not only earn much less online, they are also twice as expensive as their online competitors.
The newspaper publishers themselves know that things are not looking rosy....
The newspaper publishers themselves know that things are not looking rosy. The ceo of Mediahuis in the Netherlands, Rien van Beemen, had it written down in the annual report of industry association NDP (of which he is also the chairman): 'with digital alone we cannot maintain editorial departments'.
The lame helps the blind
Christian Van Thillo, owner and chairman of DPG Media (Volkskrant, AD, Trouw and Parool) said in a lecture last year, "the digital turn has been successfully started, but we are far from there and there are challenging years ahead. The question he fails to ask is: will they ever get there?
A little later in the lecture, he said, "at DPG Media, newspapers still only account for a third of the profit, but half of the revenue. The rest comes from radio, television and online services and magazines'. Surely that sounds a bit like the lame helping the blind, since young people listen to radio less often and for less time than older generations.
Mortuary construction
Newspaper journalism has held its own in recent years, but anyone looking under the financial hood like this sees a typical death house construction. Existing (older) paper subscribers are being pushed further and further into costs to maintain the house of cards. Online, far too little money is made and these publishing moguls carry far more costs than digital natives.
You might think: well, this has been going well for years, so it will continue to simmer for the next few years. Who knows, in the meantime, they might succeed in setting up a digital revenue model. But that's "even" beyond AI. Artificial intelligence is pulling the rug out from under digital revenue models at an unprecedented rate.
The price of words collapses
ARK, the investment club of tech freak Cathy Wood calculated in late 2023 how expensive "words" were. For the past 100 years, it cost about $300 to $400 to have a 1,000-word text created (a rate that freelance journalists won't sound very crazy about). Now that ChatGPT and other Large Language Models can generate texts themselves, that cost has dropped to 16 cents (!) per 1,000 words. So that's about 2,000 times lower. Now two years later, prices will be even lower.
The lower the price, the greater the supply. Citizens are already inundated with cheaply made AI articles and videos, and that is only going to increase. And some of the AI-generated news will be fine for many citizens, especially if it's the latest inflation figures, for example, or a soccer result. So why pay another 150 or 200 euros for a digital newspaper subscription (especially considering that those editors will get smaller with the elimination of paper subscription revenue)? You can already ask ChatGPT to create a news summary for you without going to the website of any newspaper.
Large newspaper editorships thus seem more something of the past than the future. Het Financieele Dagblad seems to be the only exception. This niche newspaper with a high-earning target audience successfully charges the top price for digital subscriptions (52 euros per month). But for the larger audience newspapers, three-quarters of them are kept afloat with "paper" money and there is no plan to replace that revenue source. Sooner or later that will create a gap in the public, independent information supply.
So what is the future of journalism?
It is important to develop new digital revenue models. De Correspondent (62,000 subscribers), Follow the Money (44,000) and Nu.nl have all rigged editorial departments with dozens of journalists. But together they are still not a shadow of the thousands of journalists now working at newspapers.
A few weeks ago, the Reuters Institute came out with a report in which they looked at how many well-known news creators and influencers there are who create, or interpret, their own online news, for example. Think of podcast host Joe Rogan in America. No other country had as few as the Netherlands, the institute concluded. When Dutch people have to name journalists present online, they often come up with names of people working for established media, such as court reporter Saskia Belleman and right-wing talking head Wierd Duk (both Telegraaf) and Maarten Keulemans of de Volkskrant.
Netherlands is failing
The only journalists on the list who make their money purely online were Chris Klomp, Jan Roos(RoddelPraat) and the young Youtuber Bender. The list of online journalists was extremely sparse ("extremely sparse") noted Reuters. Instead of exploring new revenue models, many journalists in the Netherlands are busy draining subsidy pots from numerous letterbox foundations and funds, such as SDM, the SVDJ, and the fund bjp.
The demise of traditional newspapers can be seen as inevitable. But it is not inevitable that little will replace it. In America a rich online media landscape has emerged, from podcasts (Joe Rogan), to newsletters (The Free Press) and platforms (Substack), sometimes aided by a big bag of venture capital. That Dutch journalists and publishers hardly jump into this gap, we can only blame ourselves as a country. Who dares to change that? Not only to find a gap in the market ourselves, but also to maintain a rich and pluralistic news supply for the Netherlands.