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    Sept. 1, 2015, 1:29 p.m.
    Reporting & Production

    As giant platforms rise, local news is getting crushed

    The quest for scale, driven by the distribution power of a few enormous technology platforms, is killing the business case for local news. Will anything take its place?

    Editor’s note: The of our sister publication is out and ready for you to read. I write a column for the print edition of the magazine; here’s my depressing one from the new issue.

    This has not been a good year for local news.

    nieman-reports-summer-2015That’s a sentence I could have written any year for the past decade, for a host of reasons now numbingly familiar. But 2015 has felt like a turning point for the most threatened sector of the American news ecosystem. And I’m worried that some of what hopefulness remains in the system is being wrung out by changes in the larger digital world.

    There will still be success stories, sure. But the most important job that local news has done for decades — providing a degree of accountability to thousands of local communities across the country — is increasingly going undone. And the chances of any true digital substitute arising seem to be on the decline. It’s worth stepping back for a moment to consider why things have gotten as bad as they have — and why I suspect they’ll get substantially worse in the next few years.

    Continued retrenchment in newspapers

    Let’s start out by looking at what are still the primary engines of local news: newspapers. As outmoded as ink-on-paper seems to many in 2015, there are very few communities where the largest local newsroom is attached to anything else.

    You may not hear about newspaper layoffs and cutbacks as much as you used to, but they’re still happening — just more quietly. In July, the American Society of News Editors’ annual census reported that newsroom employment dropped more than 10 percent in 2014 — the largest decline since the financial crisis, despite an overall economy growing steadily if only moderately. and — metros considered above-average performers in their peer group — have announced new rounds of buyouts this year.

    It’s anecdotal, but my private conversations with leaders of newsrooms across America have taken a turn for the depressing. I hear worries that, at a point when some newsrooms are finally making a shift toward digital-first workflows and structures, the digital business they were chasing is disappearing. Many of their small reasons for optimism the past few years, like paywalls, have faded. You can also see it in the stock prices of publicly traded newspaper companies. Since the start of 2015, stock is down about 48 percent, is down about 52 percent, and is down 63 percent.

    An uncertain position for local TV

    What about beyond print? Local TV news continues to , and the upcoming presidential election cycle will add many millions to stations’ bottom lines. But disruption seems right around the corner for them, too. Young people are already tuning out local TV news, just as they did to newspapers earlier; a Pew study this summer found that millennials were nearly twice as likely to have gotten political news from Facebook as from local TV.

    More importantly, it’s unclear if there will be any place for local news in the broader shift to streaming — think , , and — and cord-cutting. The new which aim to let people pick a smaller subset of online channels than a full cable subscription, typically have no local element at all. (One exception: Apple is for its upcoming service, expected next year.)

    There are vigorous debates about what the future will hold for TV; the medium has proven stubbornly successful through waves of digital change. But even if “TV” survives, it’s hard to see where local TV news — built for a world of daily appointment viewing, of people sitting down every night at 6:30 to see what happened that day — fits in.

    Spotty success in local digital news

    But the decline of traditional media is by now an old story. What about the new digital media that were supposed to succeed and supplant them?

    On net, I’m still an optimist. If you look at the many jobs a traditional local newspaper did, most of them are being accomplished today just fine — or sometimes far better than before. Coverage of Washington will remain solid. I don’t think that we won’t have enough stories about technology, sports, food, or plenty of other subjects. Companies like BuzzFeed, Vox Media, Vice, and more are doing high-quality work and building sustainable business models to back it. They’re also attracting huge amounts of capital, all hoping to back the few giant media companies that become the successors (or acquisitions) of the last generation of giant media companies.

    “The media” is going to be fine. The biggest issue is that very little of that capital is going into local news.

    From a purely financial perspective, why should an online company bet on local news, anyway? Local media grew in this country because local distribution was all that was practical. Newspapers were interested in covering news roughly as far as their delivery trucks could drive in the morning. TV stations were interested in as far as their broadcast towers could reach. Your market position was entirely driven by the range (and limits) of your distribution. So it made sense to focus on covering local issues, local governments, local sports, local businesses.

    Digital distribution, of course, knows no such boundaries — the same websites are available from Manhattan to Peoria. That means the competitive barriers are down — those Tulsans who always secretly wanted The New York Times can have it all they want now — and the smart business approach is to aim for the largest achievable audience. That’s why the venture-funded startups aim for giant, psychographic slices of the market (millennials! liberals! conservatives! people who like cats!) rather than muddled geographic ones. , as derided as it was by newspaper types, was nonetheless the most ambitious attempt at local digital news, and its has likely scared off some potential investors.

    Still, the hopeful belief of local publishers was that maybe their advantages might let them scratch out a decent business. Local advertisers would want to reach local readers, and a local newsroom doesn’t need to be as big as a national or global one.

    And there are plenty of : personal blogs that grow into small news operations, local gadflies who dig up dirt at city hall, talented aggregators, foundation-supported nonprofits. These can be wonderful; I’m glad they exist, and they deserve your support. But they’re not nearly numerous enough or deep enough in coverage to do anything more than a fraction of .

    And 2015 has made it clear that scale is becoming everything. Smaller audiences had better be very high-value — read: super-rich — to be worth reaching. These distributed content deals, like , , and ? They’re all about the big guys. We live in a time when there are honest questions whether companies like and have a big enough share of our attention to have legitimate advertising businesses. If Twitter may not be big enough for advertisers, how can be? The local advertisers who might have been the life’s blood of local news sites seem happy to advertise on instead.

    That trend is likely to continue as more of our online time shifts to smartphones, where Google and Facebook combine to make an estimated of all the advertising revenue on the planet Earth. Local news sites are disproportionately likely to be clunky and slow, a real issue on mobile devices, and they generally have terrible technology for targeting ads at readers.

    Lost in a quest for scale

    Here is a from Michael Finnegan, chief financial officer of Atlantic Media — a company that has negotiated the transition from print to digital about as well as anyone. He’s talking about the possibilities of a platform-driven world, where Facebook, Google, and perhaps a few others control even more of the means of distribution:

    Let’s say we reach 35 to 40 million people through owned and operated sites today. Five years from now, our brands could be reaching 300 to 500 million worldwide, but not if we insist that all of them have to interact with us on our terms on our site. That’s the future I see. That’s the future a lot of major media companies see. Some of them are running towards it faster than others.

    That may be a perfectly wonderful future for Atlantic Media! But it’s hardly one available to most local news organizations, who continue to see their traditional readership fade and few good ways to monetize the one that might replace it.

    There was a of the Internet, in the late 1990s and early 2000s, that imagined that the little guys could be winners. Reaching an audience would no longer mean owning a printing press or an FCC license — it would simply mean posting to the web, using free or cheap tools, and letting the Internet’s power to connect audiences and publishers do the rest. A tiny blog could be as powerful as a giant media company!

    But the is very nearly the version of that vision. The free and open web, architected for equal access, is instead dominated by a few large media companies who, in turn, are dominated by a few large technology platforms. Ad dollars flow up the chain to a few companies with headquarters between San Francisco and San Jose.

    And it’s entirely unclear, in that context, how most local communities — the cities and towns where we live, work, and play — will find the information they need to thrive.

    Photo of an old newspaper blowing down the street in Holly Grove, Ark., by AP/Danny Johnston.

    POSTED     Sept. 1, 2015, 1:29 p.m.
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