BOB GARFIELD:  Now for the financial crisis in journalism. The advertising dollars that underwrote that enterprise for most of its history are spread too thinly among the infinite supply of content, driving prices of ads and publisher revenue down, down, down. The once obscenely profitable classified category has been craigslisted to almost zero. Meanwhile, the audience fragmentation that drives down ad prices also drives down circulation revenue. Then comes the cost cutting, which diminishes the content, which diminishes the audience, which diminishes the revenue, and so on into oblivion.

Mind you, this isn’t cable TV or music we’re discussing now. It's journalism.

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And so, fearing for the loss of something so critical to our very democracy, we were obliged to ask, is there anyone making money out there?

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The New York Times is profitable but at nowhere near the levels of yesteryear and is losing ground all the time. Business newspapers that offer actionable information - the Wall Street Journal and theFinancial Times - have succeeded with digital subscriptions, also known as pay walls, but they don't pay all the bills and they take a toll on readership.

ALAN RUSBRIDGER:  So the newspaper has not got a brilliant future.

BOB GARFIELD:  Alan Rusbridger is the editor of The Guardian, where I’m a contributor.

ALAN RUSBRIDGER:  So you either try and cling onto the newspaper past, or you say, “We’re gonna have to let that go, at some point.”

BOB GARFIELD:  Some have stopped clinging, monetizing themselves in ways, with varying degrees of ickiness and varying degrees of editorial seriousness. Gawker, the family of websites that includes Gizmodo, Deadspin and Jalopnik doesn't disclose its financials but declares profitability. Likewise, BuzzFeed, which combines fluffy click bait and some serious reporting and likewise the Atlantic and likewise Forbes.

MIKE PERLIS:  Well, you know, we've had the best financial performance that we've experienced in five years.

BOB GARFIELD:  Mike Perlis is the president and CEO of Forbes Media.

MIKE PERLIS:  Our topline revenues year-over-year are up 10%, and our profitability is up about the same amount, 10%. We’ve grown dramatically in digital revenue. Forbes.com is growing very, very rapidly, as you know, and revenues in that area are up 19%.

BOB GARFIELD:  The first part of the equation was reducing paid staff and building a HuffPost-type stable of a thousand bloggers who coalesce audiences for their analysis and expertise, despite the fact that the vast majority of them aren't professional journalists. The second part of the equation was doing what readers do all the time, looking past the banner ad.

MIKE PERLIS:  We do e-newsletters, we do e-books. We’re embarking on an online education program: many, many things that carry the Forbes name. Thirty international local language editions of Forbes and corresponding websites.

BOB GARFIELD:  On its pages, Forbes is one of many publications to embrace advertorials or, as they’re now known, native advertising. That's where brands pay for the privilege of creating their own content that runs side-by-side with the actual journalism.

MIKE PERLIS:  They work through the business department, but they create their own very transparently marked, clearly marked as an advertisers’ page, as a marketers’ page. It's meant for thought leadership, not for – not for selling, not for pricing, but for a, a marketer to find a way to become a content producer.

[ELVIS PRESLEY SINGING DEVIL IN DISGUISE/UP & UNDER]

BOB GARFIELD:  The juxtaposition of editorial content for the  advertorial is not new. Newspaper readers have long seen pullout sections jammed with stories extolling, for example, Russia, but always with a different typeface and layout style, so there can be no reader confusion. Now, sponsored content shows up on everything from Twitter to the Washington Post, and some publishers do better than others in clearly identifying the stuff as advertising.

On the Media and many other critics slammed to theatlantic.com this winter for running a so-called “native advertising feature” on the Church of Scientology almost indistinguishable from the surrounding journalism. Atlantic President M. Scott Havens owns up to the mistake.

M. SCOTT HAVENS:  We’ve learned a lot. We, we went public with our apology, as well as some guidelines, and we put in a lot of processes since then that we think are industry-leading and public-facing, and we’re – we’re not shying away from it. We just want to do it the right way.

BOB GARFIELD:  Common practice now is to have the publisher’s marketing department create those items and add the word “sponsored” in the tags that categorize the post. But then there are publications such as Business Insider which, as revealed by Columbia Journalism Review, uses its quote, “content producers” to write sponsored posts, quote, “in our own voice and style. We also write and produce original content that aligns with the advertisers’ marketing goals and themes." End quote. Hello, Mister Fox, welcome to the henhouse.

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A dull-witted cousin of native advertising is the “from around the Web” links often displayed in a series of thumbnails, with provocative headlines of the “Tulsa Mom Finds Weird Trick for Growing Hair” variety. The resulting article is, of course, an ad. Nobody actually declares these things link to news, but nobody says they don't, which is why Erin Pettigrew, head of business development at Gawker Media, says her titles don't go in for such shenanigans because, ew!

ERIN PETTIGREW:  Not good quality content, and it's not something need to be pushing our audience to. That – that type of revenue isn’t interesting to us.

BOB GARFIELD:  But Gawker is interesting in links. It’s one of several publishers, including our home station WNYC, dipping their toes into affiliate marketing, which means hyperlinking product mentions to e-tailers such as Amazon, for a piece of the action in any ensuing purchase. Assuming editorial decisions aren’t made with affiliate revenue in mind, it's a benign practice.

In Gawker's case, marketing employees actually create articles to showcase brands, a catalogization of editorial that fashion and lifestyle magazines have done forever, but which till now has been an ethical redline for newspapers. Fear not, says Pettigrew, it's a service to readers.

ERIN PETTIGREW:  The commerce content is about us showing great products that you might want to buy, but not pushing things that are sort of out of bounds. So, there’s actually quite a lot of corollary authenticity and editorial in sort of the commercial sides of the business.

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BOB GARFIELD:  Authenticity, ethics, scalability - those were all subjects of a recent conference about new revenue streams for content producers, which was oddly self-fulfilling, because it turns out that one of the most lucrative ways to monetize journalism is to branch off of journalism with conferences, fetching large registration fees and sponsorship dollars.

Paul Walborsky is CEO of paidContent’s parent company, GigaOM, which hosted the conference.

PAUL WALBORSKY:  We said, look, you know, If we’re gonna make money out of this business and be able to have great editorial, we’re gonna have to support it in a different way.

BOB GARFIELD:  Forbes does it too. Atlantic does it too. The New York Times does it too. My colleagues at MediaPost do it too. All right, I’ve left something out. One of the most promising revenue models for journalistic content is the most basic. You might call it proto-crowdsourcing. I call it “asking for money.” Public broadcasting is no longer alone in soliciting donations from the audience and from foundations and businesses. The Texas Tribune, a website that offers in-depth coverage of Texas government and society, with no fluff, advertorials or commercial hyperlinks is doing just fine.

EVAN SMITH:  We’ve been able to raise money from major national foundations as well as state and local foundations and family foundations.

BOB GARFIELD:  Texas Tribune CEO and Editor-in-Chief Evan Smith says that the three-and-half-year-old publication is better than breaking even and will be in the black for the foreseeable future.

EVAN SMITH:  There's endless opportunity for us to grow. We have more millionaires and billionaires in Texas than any other state. All of them understand that the kind of work we’re doing results in a more thoughtful, engaged, and productive citizenry.

BOB GARFIELD:  ProPublica, the New York based nonprofit dedicated to investigative journalism, raised more than $10 million in 2012 to fund a staff of 40. President Richard Tofel compares his Pulitzer Prize-winning organization to the local symphony orchestra.

RICHARD TOFEL:  You know, there was a time when classical music, what we now think of as classical music, was popular music. And at that time, it was funded in - more or less as popular music would be today. That's no longer the case. And I think that they are coming to recognize the same thing about some kinds of journalism.

BOB GARFIELD:  A splendid analogy, but assuming a finite amount of charitable resources, doesn't that pit ProPublica and the Texas Tribune and other nonprofits against NPR and PBS and every ballet company and symphony in the world?

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Tofel’s not worried about that.

RICHARD TOFEL:  An FCC staff report last year pointed out that if 1% of all the philanthropy in the country were directed to public media, that would pay for all the public television stations and all of the programming on them, all of the public radio stations and all of the programming on them [sic] and 100 news  organizations the size of ProPublica. We’re nowhere near that yet, but I think that gives you some sense of what might be possible.

BOB GARFIELD:  Tithing, advertising, advertorial, affiliate marketing, pay walls, conferences, emails, newsletters, education - none of those sources alone will underwrite journalism and no combination of them is a guarantee for any publisher. As Pam Horan, president of the Online Publishers Association observes:

PAM HORAN:  I don't think there's a silver bullet here.

BOB GARFIELD:  Nor white knight nor magic beings nor cavalry nor alchemy turning lead into gold. All there is, is experimentation, determination, and a whole lot of blind hope.

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BROOKE GLADSTONE:  The pragmatist and poet George Santayana once observed that chaos is a name for any order that produces confusion in our minds. It won’t be chaos once we see it for what it is. None of this necessarily portends the end of anything, though it does presage a lot of new beginnings. It’s just that in this age of infinite options, our role as consumers expands, because if you really look at it, we’ve been paying the whole time, just not for what we really want.

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BOB GARFIELD:  That's it for this week’s show. On the Media was produced by Jamie York, PJ Vogt, Alex Goldman, Sarah Abdurrahman, Chris Neary and Doug Anderson. We had more help from Ravenna Koenig and Alexandra Hall. And the show was edited – by Brooke. Our technical director is Jennifer Munson. Our engineer this week was Kenny Feldman.

BROOKE GLADSTONE:  Katya Rogers is our Senior Producer. Jim Schachter is WNYC’s Vice President for News, and our boss. Bassist-composer Ben Allison wrote our theme. On the Media is produced by WNYC and distributed by NPR. I’m Brooke Gladstone.

BOB GARFIELD:  And I’m Bob Garfield.

  [FUNDING CREDITS]