The View | Internet now subsidising struggling newspapers

As Hong Kong's integration with China deepens, there has been a growing concern that press freedoms are eroding. Meanwhile we have heard less discussion on another, perhaps greater threat to Hong Kong’s tradition of a vigorous and vocal media: economics.

The internet has been ruthlessly disruptive to traditional newsgathering businesses. In the United States, for example, advertising revenues garnered by newspapers have fallen by nearly two-thirds since 2000, to US$16 billion in 2014, according to the Pew Research Center. To put the number in perspective: Google made $59 billion in ad revenue in the same year.

Newspapers are migrating to digital formats, but few have figured out how to make money out of the model. Consumers are reticent to buy content when so much of it is free on the web; advertisers have a digital ocean of choices.

Proper newsgathering is an expensive undertaking. Some fear that general news will never be profitable again – that the industry will come to rely on investors who are willing to take losses to “support the cause.”

Already we see this happening. The Boston Globe and The Washington Post in the US, and The Guardian in the UK, are examples of expensive, investigative news operations that are loss-making, but have made other arrangements to stay afloat. In short: rich people are helping to plug the holes.

Amazon’s Jeff Bezos bought The Washington Post in 2013 for $250 million, a fraction of what the famous news group – whose Watergate investigation brought down the Nixon White House – was once worth.

Robert G Kaiser, a retired former editor of the newspaper, sees a silver lining. “For [Bezos] to cover the Post's losses now costs the equivalent of lunch money for an ordinary mortal—something Bezos could easily afford for decades to come, if he chooses to play the angel's role indefinitely,” Kaiser wrote in an essay for the Brookings Institution last year.