Can Local News Outlets Survive the Pandemic-Fueled Economic Downturn?

“There is no commercial, viable model for local news,” American Journalism Project co-founder John Thornton says

Local newspapers are taking a beating as the novel coronavirus rips apart the American economy and ways of life — with some facing an existential crisis as the duration and severity of the pandemic and its aftermath remains unknown.

Just in the past few weeks, numerous local papers have folded, laid off staff or cut back operations as advertising — the foundation of papers’ revenue — has disappeared with the closures of local restaurants, bars, shops and event venues.

St. Louis’ Riverfront Times laid off nearly its entire staff last week because of dwindling advertising and a loss of revenue from now-canceled events. California’s Monterey County Weekly, meanwhile, laid off one-third of its staff. C&G Newspapers, a Michigan publishing group, suspended the publication of 19 of its print papers, while D.C.’s Metro Weekly and Las Vegas’ Gaming Today suspended their print editions. And Pennsylvania’s Trib Total Media laid off staffers and combined two Pittsburgh-area editions in what president Jennifer Bertetto called “a temporary adjustment in reaction to extraordinary circumstances.”

Even before the pandemic began, many local papers had struggled to stay afloat following “deep cuts in staffing, in circulation and in advertising,” said Joshua Benton, the director of Harvard University’s Nieman Journalism Lab. According to a 2018 study done by the University of North Carolina’s journalism school, almost 1,800 local papers have shut down since 2004.

But now, facing a global pandemic, Benton said that these “temporary savings” — the furloughs, temporary salary cuts or, in the worst cases, layoffs — may be “as good an option as they have,” since the alternative would be to shut down a publication entirely.

“Local papers were in much more robust shape heading into the last financial crisis than they are today… There aren’t a lot of good choices for newspaper owners right now. They’re facing a shock decline in advertising revenue, up to 90% in some cases,” Benton said. “A major shock to the system, like coronavirus, could certainly be what leads some owners to think there isn’t a profitable or sustainable way forward and shut things down.”

For John Thornton, the co-founder of the American Journalism Project and the Texas Tribune, the plight of local papers during this pandemic offers further proof of the deep flaws in the advertising revenue model that has funded most papers for decades.

“The newspaper industry has been addicted to advertising for 150 years,” Thornton said. “It’s been sort of a happy accident for 150 years that the newspapers that we relied on as a democracy had been able to run based primarily on advertising. That just is no longer true.”

Though some papers have turned to a reader subscription model as an alternative revenue source, Thornton cautioned that this wasn’t the best option for most outlets.

“The problem with subscriptions as a replacement is, number one: About a dime for every dollar in advertising that gets lost gets gained back in subscriptions,” Thornton said. “Number two: The information that people really need in a situation like this should not be placed behind a paywall anyway, because everybody needs access to coronavirus information. So if in your proposed solution to the disappearance of advertising is, ‘Well, we’ll just charge people for the information,’ this crisis is just showing how little sense that makes.”

Addressing the growing desert of local news outlets, Thornton said, will require rebuilding “a civic news infrastructure that is truly funded by the people” that would be a combination of membership programs “a la public radio,” corporate underwriting and philanthropy. “The key component, we believe, is these got to be thought of as civic organizations, not commercial organizations,” Thornton said. “There is no commercial, viable model for local news.”

But before this transformation occurs, what can consumers do to help more immediately? Thornton suggested becoming a member of a public radio station — many of which are doing well in “these communities where newspapers are going away,” he said — and donating to a program like NewsMatch, which pools together local and national donations to support roughly 200 nonprofit newsrooms.

Benton, meanwhile, said subscription purchases are still the way to go.

“If someone wants to support their local newspaper, the single best thing they can do is buy a print subscription. Newspapers still make the majority of their money off the print product, even though that’s the part of their business declining the most quickly,” he said. “The next best thing would be to buy a digital subscription, which is usually significantly cheaper but helps a paper get further along in the digital transition they all need to make. Besides that, read it, support the advertisers who help fund it and share their good work with your friends — both so they can gain value from it and so they might be convinced to subscribe as well.”

Assistance may come from outside help. On Monday, Facebook CEO Mark Zuckerberg pledged $100 million to help support news outlets who have seen their businesses impacted by the coronavirus pandemic. Zuckerberg said the company wants to emphasize assisting local news outlets in particular, and has committed $25 million in “emergency grant funding.” Details on how news organizations can apply for the grant funding have not yet been made.

Lindsey Ellefson

Lindsey Ellefson

Media reporter • lindsey.ellefson@thewrap.com • Twitter: @ellefs0n

J. Clara Chan

J. Clara Chan

Media and politics reporter • jclara.chan@thewrap.com • Twitter: @jclarachan



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