Advertising has been bound to newspapers for a long time. Check out the front page of 1st edition of the Manchester Guardian (now the guardian) from 1821 http://www.guardian.co.uk/news/gallery/2007/jun/08/1?picture...

In those days the business model was to cover the front page with small text ads! (as pointed out by currybet here: http://www.currybet.net/cbet_blog/2009/05/happy-birthday-to-...)

The Tragedy of the Commons refers to the overuse of a shared commodity that takes time to renew. I do not see how this applies to newspapers.

* Any individual newspaper can make more money by giving their news away for free and selling advertisements than they can by charging readers.

* If any one paper gives their news away for free, it makes it effectively impossible for other newspapers to charge money.

* If all newspapers give away their news for free in exchange for advertisements, they all lose money.

I guess the prisoner's dilemma would technically be a better term, but it's basically the same thing in this case, at least if you think of advertisers as an over harvested resource.

As far as "Any individual newspaper can make more money by giving their news away for free and selling advertisements than they can by charging readers.", that is absolutely NOT true. Advertisers pay much more for ads in paid publications. Has to do with reader engagement.

Maybe they make more per ad, but how many newspapers are making more money than Facebook or Google? The only reason that newspapers can't make that much money is they don't have enough volume, and the reason they don't have enough volume is that every other newspaper is free also.

It's the free-rider problem. Prisoner's dillemma refers to making antagonistic decisions with incomplete information about other actors' intentions.

Tragedy of the commons?

Perhaps you could explain a bit as to how this is the case?

Can you elaborate? How did newspapers thrive before the current traditional business model?

Charging people. But then the industrial revolution created massive economies of scale for the first time, which lead to companies that were global in scope. So suddenly newspapers could make more money from advertising than from charging. And this put all of the paid newspapers out of business, because it's hard to compete against a free newspaper. So essentially what's happening now is that the corporate newspapers are getting put out of business by their own business model, the one they used to kill off all the working class and liberal newspapers. So long and good riddance.

By selling the paper (broadsheet).