The news industry makes a lot of sense when viewed as a category of entertainment. Reporters write stories and people read them to be entertained. Newspapers make money when more people read the stories. No wonder that newspapers don't cite others... That's just an advertisement for their competitor. This isn't the only way to view the news industry but it certainly explains a lot.
There's also a professional divide between "journalists" and "bloggers" [0]. If anyone can start their own website and write stuff, without getting any kind of qualification or accreditation, and without following any editorial policy or maintaining any kind of journalistic integrity, and still get credited with a story, then journalism itself has an identity crisis. Meanwhile, (some) journalists at (some) news organ…
You just described the perfect business model. A democratic society would be all over that. Who wouldn't pay a small sum to ensure that their employees are kept in line?
The only problem is that most people don't really want democracy. They want replaceable dictators who can do as they please during their stay as long as they step down after the allotted time. That's why said business struggles to find any customers.