New Report on Business of Digital Journalism

One of the bigger issues regarding the Future of Journalism regards funding - what viable business models will emerge for journalism and its distributive media.  And while online news is increasingly cited as a primary source for news, its been clear that following traditional models relying heavily on advertising are not likely to produce sufficient revenues in the short term.  In the meantime, the search for viable business models for digital journalism continues, with much experimentation.
Recently, the Columbia University Graduate School of Journalism (which owns and runs the Columbia Journalism Review [CJR]) released a study on the current state of the digital journalism economics.  The rise of digital is transforming journalism, impacting both costs and revenues, redefining the markets in which journalism outlets operate, but also creating significant opportunities for rethinking the purpose and focus of journalism.  The study rejects the idea that non-digital news platforms will necessarily disappear, and argues that news organizations should embrace digital platforms, recognize that they are still in a transformative state, and explore the potential for innovation in both the journalism and business sides.
The report offers some specific recommendations:

• Digital platforms should be more than a repository for existing content created for another medium.  There is evidence that offering high-value, more distinctive content designed for digital media can be economically successful.
• Rethink the relationship between audience and advertising.  Traditional mass media built its advertising model on reaching large numbers of lightly-engaged readers and viewers.  Digital media offers the potential for higher-value engagement, interactivity, and targeting. News organizations can benefit from understanding the audiences they have and the ones they want - and revise their content and offerings to build audience loyalty.
• Media companies need to rethink their relationships with advertising.  Advertisers have a much wider range of outlets they can use to reach people.  News organizations have to know and sell their strengths and areas of competitive advantage.
• As part of the above, the media and advertising industries need to develop alternative metrics for measuring audiences and advertising effectiveness.  In particular, they need to move away from the overly simplistic impression-based pricing systems that dominate both online and traditional media today.
• Journalists and news organizations need to give more emphasis to licensing and secondary rights.  They need to be vigilant in terms of outright theft of content, while recognizing the direct and indirect values of having their content more widely available and used.
• Journalists need to be prepared for a highly competitive news environment, and its concomitant downward pressure on editorial costs.  The rise of digital has reduced technological costs, allowing for more, and smaller, news outlets to emerge and become successful
• The rise of mobile and tablet personal media devices present special challenges and opportunities for journalism.  Those media are new enough that there is no clear picture of what products or services will be successful, so experimentation is key.
• News organizations should have very limited expectations for pay schemes for online sites in the short term.  As news organizations shift from providing more standardized, commoditzed content to a more differentiated and distinctive content - as they redefine their online sites from offering low-value content competing  with a plethora of other undifferentiated news sites, to offering high-value content to a more limited audience (and market), pay schemes become more viable.

Finally, the report reaffirms the notion that the public needs, and benefits from, "independent journalists who seek out facts, explain complex issues and present their work in compelling ways."  While they suggest that philanthropic or government support can help (although possibly reducing journalists' independence), they recognize that ultimately, it is up to the commercial market to provide the economic basis for journalism.  It just needs to figure out how.

Source: "Conclusion: Lessons, takeaways, and bullet points" CJR
Full Study: "The Story So Far: What We Know About the Business of Digital Journalism"
Executive Summary for a quick outline