The British newspaper The Guardian is the real newspaper (lots of full-time reporters and editors and photographers, not just commentators or aggregators) that has been most aggressive in its belief that free digital publication is the future. It has a fabulous free site, with separate editions for Britain, Australia, the U.S. and “international,” chock full of original stories. I learn something new every time I go there.

Here’s something new I’ve just learned: It’s going broke, fast. As Michael Wolff reports in USA Today:

The Guardian  is supported by a trust set up in the 1930s by the Guardian’s founders, the Scott family from Manchester, wholly dedicated to the survival of the paper. While the trust envisioned providing the paper freedom from commercial pressure to let it practice unfettered journalism, the transition to digital is, in the estimation of the Guardian’s managers, the only path to journalism’s future — and a necessary cost, whatever it amounts to.

The cost of digital growth mounted as digital advertising revenue declined. And with zero interest rates, there has been, practically speaking, no return on cash. Hence, the Guardian’s never-run-out endowment has plunged by more than 12% since the summer.

His conclusion is one that I reluctantly reached years ago: There is no commercial income stream that can support what we’ve come to think of as journalism, once you’re online world. Not digital ads, which are plummeting in value, and not subscriptions, which never covered more than a third (maybe, at a stretch, half) the cost of a real newsroom in print’s heyday.

So is journalism doomed to die? I hope not, but I have no good answer. The Guardian has shown that one extreme option – create great stuff and make it available for free, hoping for enough ads – won’t work.

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