The digital transformation of news has had many welcome effects. But among the range of new and increased challenges it has created, one of the most significant is the shattering of journalism’s traditional financial model. As news outlets have struggled, policymakers around the world have sought to find responses that will help bring greater funding to the industry. Legislation has taken a variety of forms. And now a recent study by the Center for News, Technology & Innovation1 has attempted to analyse these approaches by looking at 23 recently enacted or proposed pieces of legislation between 2018 and 2024, each aimed at providing revenue streams for journalism, principally from digital platforms. The paper’s authors, Connie Moon Sehat, Amy Mitchell and Samuel Jens, firstly group the legislation into different financing models and then go on to consider the effects on the broader news ecosystem.
Models of legislation
The paper identifies a total of seven distinctive financing models, but perhaps the most significant are the ones it identifies based on digital interaction or ‘usage’ (which, as the paper points out, is defined in a variety of ways).
The first of these takes the position that existing copyright law doesn’t properly incorporate online content like journalism, whose creators are therefore inadequately compensated. Laws following this model aim to regulate how digital platforms use content. An early attempt in Germany in 2013 proved difficult to enforce.2 (The authors point out that when, in 2014, the publisher Axel Springer restricted the snippets of news from Google, traffic plunged and the policy was reversed two weeks later.) A more recent example, the EU’s 2019 directive, is described in the paper as being more balanced.3
The second model, pioneered in countries like Australia, require negotiation between news publishers and the digital platforms that host news. These negotiations result in direct payments from platforms to businesses though so far agreements have been made outside the mandatory framework. The framework allows collective negotiation, exempting news organisations from antitrust restrictions so they can negotiate together. However, enforcement is challenging if platforms choose to drop news entirely. For example, Meta has threatened to remove news from its platform in Australia if forced into negotiations.
A third model introduces a local usage fee tied to link distribution, with state bills in California and Illinois proposing payments to publishers based on link counts. The Illinois bill required platforms to track link occurrences and allocate fees to digital journalism providers meeting specific engagement thresholds. Critics warned of incentivising clickbait, prompting California lawmakers to revise their bill in June 2024, shifting towards broader bargaining rights for news outlets. Ultimately, California abandoned its proposal in favour of a $250 million deal with Google. The model emphasises compensating journalists, including freelancers, with funding sourced from major digital platforms.
Other models described in the paper concern different kinds of subsidy, either from platforms, through collaboration and profit-sharing with news organisations, or direct subsidy through government grants. The authors point out that Canada’s C-18 law (enacted as the ‘Online News Act’) inspired by Australia’s model, evolved into direct platform-government negotiations.4 Meta removed news links to avoid compliance, while Google reached an agreement, but implementation challenges remain.
Tax credits are also used in some cases. Other approaches incentivise advertising in local news, as seen in Maryland and Illinois. Some states, like Wisconsin, have proposed tax breaks for newspaper subscriptions. These initiatives leverage existing tax codes, requiring no special oversight.
What constitutes ‘fair compensation’?
The paper’s authors note that legislative approaches for sustaining digital news focus on securing financial streams rather than addressing all aspects of a sustainable ecosystem. Many measures are temporary, but laws can have lasting impacts.
The key debate is whether technology platforms should compensate journalism for digital usage. Various models define ‘usage’ differently, including linking, processing and data extraction. Challenges include defining fair compensation, balancing copyright expansion between the rights of copyright owners and the rights of users, and ensuring journalistic independence. Government influence, platform dependence and access to news remain concerns.
Additionally, issues like diversity, privacy and the role of public interest journalism are inconsistently addressed, raising concerns about long-term sustainability.
Towards a durable solution
The paper highlights how current legislation impacts the sustainability of digital journalism, emphasising that no single approach can fully address the industry’s crisis. The digital transformation has redefined journalism, requiring new frameworks beyond traditional models.
While global legislative efforts show commitment to sustaining journalism, key concerns remain: how should digital content usage be defined, how can diversity be preserved, and how can journalistic independence and public information needs be guaranteed. Effective policy, it is argued, needs to consider legal definitions, the role of artificial intelligence and broader journalism-related regulations. The paper’s authors conclude that comprehensive discussions, comparative legal analysis and ongoing research are essential components for reaching a durable solution to the crisis facing journalism.
The paper, ‘Enabling a Sustainable News Environment: A Framework for Media Finance Legislation’, is published by the Center for News, Technology & Innovation.
This article was drafted with assistance from generative AI.
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