How they made news pay: news traders’ quest for crisis-resistant business models

This paper discusses the problem, implied by Arrow’s fundamental paradox of information, of how to make money from news. To earn money from important news, news traders need to tell the potential buyer what it is, yet once they have revealed it, the buyer no longer needs to pay. This paper discusses how historically this paradox made it difficult for news agencies to profit from selling important news during crises, and how they gradually developed new business models in response. It examines these models and investigates how they interacted with market structure, resulting in just a few international news agencies dominating the international news supply.