Online advertising typically brings in less than 20% of a newspaper’s advertising revenue reports the economist. On the morning of September 3rd 1833 a new kind of newspaper went on sale on the streets of New York. With its mix of crime reports and human-interest stories, the Sunwas intended to appeal to a mass audience, and its publisher, Benjamin Day, made it cheap: at one penny, it was one-sixth of the price of most other papers.
The most popular newspaper in America at the time, according to Mitchell Stephens, author of “A History of News”, was New York’s Courier and Enquirer, which sold 4,500 copies a day. Day’s new “penny paper” appealed to people who had not bought newspapers before. Within two years the Sun was selling 15,000 copies a day.
In hindsight this was a turning point because it introduced a new business model to the industry. The Sun’s large circulation attracted advertisers, and the resulting revenue enabled Day to keep the price of the newspaper down and its circulation up. Instead of relying mostly on selling copies, newspapers came to depend mostly on advertising. It was a great deal for all concerned: readers got their news cheap, advertisers could reach a large audience easily and newspapers could afford to employ professional reporters instead of relying on amateurs. See the full article here. Image from the economist.