How? Readers can pay newsrooms for content using a debit/credit card or purchasing and sending CVL to the newsroom.
Why? Because they like the pieces coming out of a set of newsrooms and want access to that type of content.
Effectively, journalists end up running their own newspaper, but that newspaper is a subsidiary of a parent company that is hands-off for content but not for governance (which just means it's not totally hands-off for content). This newspaper would compete against other subsidiaries of the parent, and would have a certain percentage vote on what other subsidaries exist. Moreover, journalists would often be paid by selling their stock options in the parent.
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Obviously, the hypothesis here is that such a direct connection between journalist and reader will lead to higher-quality content then can be found at the MSM rags. I'm agnostic about whether that is the case.