Newspapers and magazines have derived most of their revenue from ads since long before Google and Facebook. They're lucky to break even on subscription fees.
That's not to say Facebook didn't make things worse. They make everything worse; They even ruined wishing friends happy birthday. But the news vs the internet is a much older story than middle-aged social media platforms.
The news companies had their opportunity to win this, but they moved far too late.
It's not that they were a pittance, it's that they were eaten by the cost of printing and distribution. But the internet doesn't have that.
The problem was the chronology of how this happened.
Newspapers had paid print subscribers and advertisers and were profitable. Then the advertisers were eaten by eBay and Craigslist, so they went into the red. But their paid subscribers were still print subscribers, so they still had all the costs of printing and distribution. So they responded by laying off reporters.
Then they had no content worth subscribing to, so the subscribers went away. At that point they're just worthless clickbait mills chasing online ad money.
But the model of paying to subscribe to high quality content which is then distributed over the internet so that money goes to the reporters instead of the distribution costs, that works fine.
The real "problem" with it is that it works fine without a newspaper company. The reason you had a hundred reporters working together in the same building was so they could share a printing press. Without that need, you end up with individuals doing reporting on substack. Which works, but not for the shareholders of the New York Times.
> Without that need, you end up with individuals doing reporting on substack.
Content that is produced on substack is opinion, not news. It is produced from a comfort of a chair, not from a war zone or a hurricane zone. Nothing wrong with that (if opinion is what you are after), but you actually need to have a news organization to produce news coverage. A single person can not do it in a professional and repeatable way.
Putting aside whether this is even true, there is no requirement for a substack to always be exactly one individual, or for that individual to be unable to hire a third party proof reader or fact checker. That still doesn't require a billion dollar media corporation.
There is also no requirement for it to be opinion rather than factual reporting. Most of what existing large media companies produce is not factual reporting.
Also an individual may not have the same knowledge or understanding to report about science, sports, education, economy or crime with same quality.
If you propose multiple individuals forming an organization and using substack as a platform, that is fine, you just replaced paper or a website with substack, so the platofrm changes but they would still be running a news organization/news company.
I would go further. Facebook are just filling in a need and by doing so, making it worse. They never created anything. Calling the problem 'Facebook' won't help in the broader sense, i think that ultimately it's a distraction but people are happy with it because it allows them to outsource their problems rather then acknowledge them.
IMO you are really discounting just how massive the importance of local journalism has historically been.
PE firms are now buying up and destroying these once great outlets, including the Miami Herald.