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Local News Industry Weighs Future Amid Pandemic

April 1, 2020 By Ryan Gallagher

Journalism leaders are struggling to catch their breath after what may have been the worst month in the history of local journalism. Declining ad revenue has been a problem in the industry ever since the Great Recession pulled around 70 percent of American newspaper’s ad dollars down the drain, but many of the larger national news organizations — such as The Atlantic, Business Insider, The New York Times, The Los Angeles Times, The Wall Street Journal — managed to dodge the worst of the impact with their large reader bases. The local news industry, on the other hand, remained precariously dependent on local businesses for most of their ad revenue.  That is until coronavirus shutdowns across the country forced these local businesses to save their dollars and distance their images from the pandemic. 

As news industry analyst and Newsonomics: Twelve New Trends That Will Shape the News You Get author, Ken Doctor writes, “This event isn’t just a black swan, Nassim Nicholas Taleb’s parlance for an unexpected happening that forever alters the course of history. For dailies — in the U.S., in Canada, in the U.K., and really globally — it’s a flock of black swans.” Among this ‘flock of black swans,’ we have an ad revenue shortage, newspaper delivery shutdowns, event closings and falling paywalls to accommodate coronavirus news seekers, all threatening the future of our news.

Even while digital subscriptions are “way up,” at better known sources, according to Ken Doctor, “with new weekly signups up 2× to 5× over pre-virus times,” much of the local industry is still seeing layoffs, decreased publications and changing subscription models as companies try to survive the ad floor giving out. But the outlook is grim. “I’ve spoken with more than a dozen well-placed executives in the industry,” Doctor says, “and the consensus is that, in April, daily publishers will lose between 30 and 50 percent of their total ad revenue. Things are unlikely to improve until we’re past mass sequestration, whenever that is.”

Several prominent voices have begun to speak up for local journalism. Governor of Vermont, Phil Scott, whose state has recently seen a number of changes in their local news organizations, posted a tweet Sunday asking the public to consider subscribing to local newspapers. Monday, Facebook CEO, Mark Zuckerberg announced that Facebook would “dole out $25 million in grants to local news outlets and spend $75 million in a marketing drive aimed at news organizations internationally in response to the coronavirus-prompted economic downturn, which has caused advertising to plummet and has threatened media industry revenues,” as reported by New York Times. And last week, Twitter announced that they would be donating $1 million dollars evenly distributed between the Committee to Protect Journalists and the International Women’s Media Foundation.

A few news organizations have pointed towards an even more wide reaching solution. The president and co-CEO of Free Press and Free Press Action, Craig Aaron, wrote a Columbia Journalism Review article detailing a $5 billion dollar government stimulus plan for the news industry. He recommended using the money to double the funds for public media, invest in support for daily and weekly newsrooms, and create a $2 billion “First Amendment Fund” for new innovations in news media. Washington Post media columnist Margaret Sullivan also promoted the stimulus plan.

New York Times media columnist Ben Smith argued that newspaper chains are not worth saving and that the industry would be better off pivoting towards new online platforms. “Without careful restrictions, a huge share of that government money will go to doomed newspaper chains for whom a major goal…” Ben Smith reports, “…is paying a dividend to shareholders unwise enough to invest in his doomed business.” While the details of a relief package for local journalism still need to be hammered out, the fact that help is needed is widely understood. David Chavern, the president and CEO of the News Media Alliance, sent a letter to President Trump, Senate Majority Leader Mitch McConnell and House Speaker Nancy Pelosi informing them of the danger of a recession in the ad market. “While that is bad in every circumstance, in the current environment it could prove fatal — both to publishers and the public,” it read. “As we move into a continuing phase of this crisis, we will be engaging with elected representatives in a discussion of options for actions the federal government could take to help sustain our local news ecosystem”

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