De Waal, Martijn Business and Ownership of the Media in Digital Times. New York: Open Society Foundations, 2014. 

The entire book Digital Journalism: Making News, Breaking News is free for download.

 

A small excerpt as published in Fairpress.eu: 

Developments in the digital media business may be summarized thus: the rise of new media means generally more media. Digitization has worldwide led to an enormous increase in available media channels, in both the television business as well as on the internet, a development that in many countries, however, has come at the cost of print media. There is no single global conclusion to draw from this on the development of business models, and whether this development is strengthening or weakening the role of media in a democratic society. On the upside, especially on the internet, it has become cheaper than ever to start a media venture, and many countries report new voices being able to express themselves thanks to that, be they hyper-local citizen initiatives or nongovernmental organizations (NGOs) or political or religious organizations starting their own media.

On the downside, even though the number of channels has grown, the number of owners has not, which has led to further consolidation of ownership. On top of that, the funds available for all media channels (coming from either users’ contributions, advertising, or state coff ers) have not kept up with the increase in the number of channels. This means less money for in-depth journalism as well as an increase in competition between channels, often leading to the sensationalization of programming. Commercial departments of media channels are also becoming more creative in adapting to the needs of advertisers, increasingly allowing product placement and advertorials within the journalistic content.

Finally, although the online production and distribution of journalistic content are cheaper than broadcasting or print, there are only few successful business models for online news platforms. In some countries, the crisis of the old business models has led to the emergence of new ways of thinking about the role of the state in safeguarding the production of independent journalism, for instance by establishing funds to support this important function in democratic societies.

Cash-flows in the Media
Digitization has led in most countries to an increase in media channels and platforms available to the public. However, in most countries advertising budgets have not grown correspondingly: indeed they are under pressure due to the financial crisis, with the exception of some emerging countries. As advertising is still the main source of income, this means that competition between channels has intensified. This
intensification is accompanied by shifts in the advertising market. First, advertisers have many more options. Online they can make use of specialized advertising platforms such as websites specializing in job search, classifieds, dating, and so forth. Many countries report that as a consequence of these developments good-quality media are under increasing financial pressure. (…)

Effects on Good-quality Journalism
Increased competition in the media landscape has led to a rise in niche channels, meaning that news is sometimes removed from general interest channels and isolated in special interest channels, begging the question to what extent the general public encounters news in its media diet. In some countries, reporters have noted a sensationalization of the news, with journalists adding more drama to news stories in order to attract the attention of the audience. This is usually described in negative terms, although it does not have to be negative in practice. Research in the Netherlands has shown that adding drama and personal stories to the news may make it easier for audiences to engage with it. Increased competition has also led to growing interest in monetizing media productions, often at the cost of creating public value. Slovenia and Georgia report that channels have increased the time allocated to commercials, in the case of the latter even surpassing the legal quota.

Other countries including Russia, Bosnia and Herzegovina, and Mexico report that rising pressure in the advertising market has boosted the influence of advertisers and media funders on the editorial department. Some news organizations run advertorials without labeling them as such, or grant advertisers direct infl uence on content. A few reports also mention an increase in product placement. Reporters from Estonia, Chile, and Latvia mention the rise of hidden advertising, where commercial products or ideological points of view are presented as independent journalism. (…)

Only a few countries reported that telecommunications operators are increasing their influence on content. However, it should be noted that these operators are one of the largest advertising spenders —if not the single largest spender—in many countries. In Albania, this situation has had a direct impact on critical coverage of these companies. In Spain, Telefónica pressured the newspaper El Pais to spike a critical article by threatening to withdraw its ads from the newspaper. Similar stories have emerged elsewhere; in Peru, mass media refrain from critical reporting about various companies.