News industry in trouble as ads dry up in coronavirus outbreak

Vanity Fair:

As Americans are turning in large numbers to media outlets for coronavirus coverage, the industry itself is struggling to stay afloat. “The Coronavirus Is Killing Local News,” read an Atlantic headline last week, while BuzzFeed dubbed the pandemic a “media extinction event.” Alternative weeklies, local dailies, and digital-only newsrooms are struggling with the current advertising free fall, compounding the long-running issue of advertising revenue migrating to big tech platforms like Facebook and Google.

BuzzFeed announced last week it would cut pay for its employees through May in an attempt to avoid layoffs, while newspaper giant Gannett, which owns papers such as USA Today, the Des Moines Register, and Arizona Republic, told staff Monday that furloughs and pay cuts were coming. The Tampa Bay Times is also furloughing some staff and announced Monday that it cut print production to only Sundays and Wednesdays. “These extraordinary times call for extraordinary measures,” said Tampa Bay Times chairman Paul Tash.

There’s no cure-all to fix the news business, but Washington Post media columnist Margaret Sullivan has proposed directing stimulus money to help support it at this especially precarious moment. “News-industry experts have been predicting for years that a recession of severe economic downturn would deliver a death blow to these already troubled businesses,” Sullivan writes. “And now a public health crisis has come along to threaten exactly that.” One idea, proposed last week by Craig Aaron, president and co-CEO of Free Press, argued for a stimulus package that would double federal funds for public media, provide direct support to fund local news coverage, and seed a “First Amendment Fund” to support new positions and approaches to newsgathering. Among other steps to support local news, the Atlantic echoed the idea of federal support, proposing that the government “funnel $500 million in spending for public-health ads through local media” as part of its future stimulus plans.

Meanwhile, Ben Smith seems to want to rip the band-aid off. In his latest New York Times media column, Smith calls for “a painful but necessary shift” for saving the news business: look to the future. “Abandon most for-profit local newspapers, whose business model no longer works, and move as fast as possible to a national network of nimble new online newsrooms,” Smith writes, arguing that getting through this crisis requires confronting the reality that “the revenue from print advertising and aging print subscribers was already going away” and “when the crisis is over, it is unlikely to come back.” A large part of the stimulus money that some have advocated for could, Smith warns, go to already-doomed newspaper chains. He instead suggests building new institutions to support local journalists in the form of a new network of nonprofit organizations, citing the Texas Tribune as a promising model of this kind, and small businesses like subscription sites and newsletters.

The New York Times, which now boasts more than 5 million paid subscribers, has only grown in recent years as the newspaper industry contracted—a problem Smith identified in his first Times column earlier this month. In looking at the impact of coronavirus, the New Yorker’s Michael Luo revisits the Times decision more than a decade ago to install a paywall, and how that move helped lead to its financial stability today. Luo notes that the Times, Atlantic, Wall Street Journal, Washington Post, and New Yorker are among the publications that have recently lowered their paywalls for parts of their coronavirus coverage, writing that an independent press keeps citizens informed and defends against “rumors, half-truths, and propaganda that are rife on digital platforms.” While these publishers may lose some revenue as the crisis plays out, they’ve also built solid subscription bases to help counter advertising downturns.
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While Facebook has indicated an interest in financing local news the current market for local papers appears to be shrinking.  The coronavirus has also put several ad sources at least temporarily out of business, such as restaurants.  Grocery stores are another source of local ad revenue, but they are still having trouble keeping their shelves stocked and have no need to run ads.

The news business as a whole has been in decline for some time and the hostility of many in the business toward the Trump administration has further alienated half the market for their product.