Publishing business models: Where the money comes from

Historically print publishers would earn money from copy sales and advertising revenue.

Some publishers, mainly in the trade press, relied solely on advertising.

Others, such as book publishers, relied solely on copy sales.

Most newspapers and magazines make money from a mix of the two. In the past newspapers published in the UK would make almost all their money from copy sales. In the rest of the world advertising was more important.

Balance between advertising revenue and copy sales

The balance between advertising and copy sales revenue usually determines a title’s editorial strategy.

One important part of this is that when the money comes mainly from readers, then serving their interests is paramount.

When money mainly comes from advertisers there is always a temptation to pander to their needs over reader needs. Only the most determined publishers would always put readers first if that meant jeopardising advertising revenue.

Simple equation

The revenue part of a publication’s business model is simple:

Revenue = copy sales + advertising sales

Publishers who rely mainly on copy sales for their income typically spend more on producing quality editorial to attract readers.

Advertising-focused publishers may put less emphasis on editorial quality. That doesn't mean they all do. Some advertising dependent publications have excellent editorial departments. Strong news or features can drive readers to view advertising

In extreme cases, there are publishers that do away with editorial all together producing publications which closely resemble catalogues or advertising brochures.

There are a few twists on advertising sales. Some publishers, for example, make respectable sums from running trade shows, seminars or other events that use the masthead's prestige to attract customers. Others might run reader offers.