Newspaper Woes Intensify in Covid-19 Era: Widespread Job and Pay Cuts as Ad Revenues Fall

With many industries suffering due to Covid-19, the continued decline of newspaper industry staffing hasn’t gotten the attention it warrants. A non-paywalled story at the Financial Times, Coronavirus rips a hole in newspapers’ business models, attempts to fill that gap.

The fact that newspaper employment levels have taken another leg down this year may partly explain why coverage has seemed so skewed: a lot on the usual eyeball-grabbing Trump outraged du jour, reasonable attention to Covid-19, and a strong focus on not just Black Lives Matter protests and police reform, but on race issues generally. While these are all important topics, the sense I have as a professional news junkie is the intense focus on these hot topics has come at even-greater-than-usual expense of coverage on other issues, ranging from climate change, anti-trust, and Julian Assange.

The Financial Times highlights the steepening of the fall of newspaper fortunes:

At least 38,000 news company workers from journalists to commercial staff have been furloughed, laid off or taken pay cuts in the US since March, according to FT estimates…

The carnage has spread to every corner of the news business, from venture-capital backed upstarts like Vice to century-old local newspapers and magazines.

I’ve had trouble finding a baseline, since the widely-cited surveys, such as by Pew, cover only “newsroom” employees, as in those who produce content, and not those on the business side. Nevertheless, Pew reported that US newsroom employment had fallen to 88,000 in 2019.

The pink paper describes how the collapse in ad revenues has led even storied publications like the Atlantic to make deep cuts (20% of headcount). And evenmid-tier publications like the Minneapolis Star Tribune, which has seen an uptick in readership due to its George Floyd coverage, has lost 40% of its ad revenues during the Covid-19 crunch and have been reducing staff hours.

More generally, a bifurcation is under way. The biggest publications have been able to attract more paid subscriptions while the also-rans struggle:

But the pandemic has exposed the growing divide between a handful of publishers with more than 1m subscribers each, and the rest struggling to make ends meet. In the first quarter of 2020, The New York Times added 587,000 digital subscriptions — more than all of the 100 newspapers owned by Gannett, the largest US print publisher, and more than the paying online readership of the Los Angeles Times and The Boston Globe combined….

A few premium publishers — The New York Times, Wall Street Journal, Washington Post and Financial Times — amassed more than 1m digital subscribers each. More niche publications — such as Politico for policy and politics, The Athletic for sport and The Information for technology — have also been able to command a premium to sustain smaller newsroom operations….

“Subscription revenue is more sustainable, it is recurrent, it has a lot of advantages,” says Kristin Skogen Lund, chief executive of Schibsted, the biggest publisher in Scandinavia, the region with the world’s highest density of news subscriptions. “The problem . . . is that the revenue base is simply not large enough. You would need to charge so much for a subscription to sustain the entire cost of running a media site.”

Newspaper publishers have been in decline since 2000. The internet wiped out classified ads, which had been half of their total ad revenue. From my vantage, the industry seemed to be in denial about the death spiral of print papers (and I greatly prefer reading a physical paper) and even worse, was slow to recognize the way Google and Facebook were eating their lunch. Even so, this grim picture has only become more dire. The Financial Times reports that some publications have seen their ad revenues fall by 50% to 90%.

And those willing to pay for publications are highly selective and dying out:

Research by Oxford university’s Reuters Institute for the Study of Journalism has shown that even the minority willing to pay for news largely do so for one publication — creating “winner-takes-most” markets. While the audience for online news jumped to new highs during the pandemic, most sites convert fewer than 1 per cent of website visitors into paying readers. Although there are no sector-wide figures, some publishers admit most of those that do pay in America and Europe are older, more wealthy and white.

The newspaper industry increasing looks as if it is carrying a beggar’s bowl, looking for munificent squillionaires….

One particularly seductive idea has been for wealthy benefactors to swoop in and backstop news organisations against losses. The trend has gained more attention since Amazon founder Jeff Bezos — the world’s richest person — bought the Washington Post for $250m in 2013.

But even when the independence of news output is protected, recent examples have revealed the shortcomings of such a business plan. Mr Taylor is worth an estimated $3.5bn, but that did not stop the Minneapolis Star Tribune from asking reporters to take unpaid leave this year. “The billionaire ownership model doesn’t mean that billionaires want to lose money on their newspapers,” says Michael Klingensmith, the newspaper’s publisher.

….and for welfare, um, grants, from the tech titans that stole their ad money:

Some bigger news organisations have their eyes on Facebook and Google, which, after years of resisting, are stepping in with larger grants and direct payments to news groups for their content. This is particularly vital for digital publishers such as Huffington Post and BuzzFeed, struggling businesses once heralded as the future of journalism…

In recent years Facebook and Google have each committed $300m to support US news publishers. As the pandemic shattered the economy, Facebook said it would expedite $25m in emergency grants to struggling local news groups.

Um, even $600 million a year is less than $16,000 per the 38,000 jobs that disappeared since March….not enough to pay those salaries, let alone fully-loaded costs. And pray tell, how is that dough doled out? They appear to be dispensing it through a straw:

“For them to step in with $50,000 grants or $100,000 grants . . . that’s not going to fix a newsroom,” says Nancy Dubuc, chief executive of Vice Media. “The scale of these platforms were built on other people’s brands. Facebook walled [in] those audiences. [The platforms] are going to emerge only stronger [from this crisis]. And at the expense of what?”

Executives worry about content being skewed to cater to the taste of those better off, older subscribers, of difficulty of supporting local news rooms, and of Google and Facebook continuing to eat their lunch:

Some media executives warn that relying on Big Tech has dangers, especially if publishers want to develop new products for subscribers. “The problem going through the platforms is that very often you are almost cut off from your own data,” says Ms Skogen Lund. “And that is almost like being cut off from your money, because it makes you blind to your own product.”

As we’ve said, if your business depends on a platform, you don’t have a business. But some publications may have gone too far down that path to easily extricate themselves.

More generally, while some readers may not see the continued decline of the newspaper as a big deal, I suggest you rethink that view. Opinion, commentary, and analysis all depend on having a foundation of facts on which to build. Sometimes those can key off government or private sector reports, but even then, what’t the discovery process? Are analysts at the vagaries of what gets picked up by prominent figures on Twitter? And how do you do vetting if you aren’t a subject matter expert or don’t have access to one? Even if the independence and objective of the mainstream press is sometimes questionable (witness WMD in Iraq), navigating informational hall of mirrors of having to sort through competing spin-doctors is taxing.

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25 comments

  1. CletracSteve

    I would opine that newspapers are even more important for local news. The list of publications here are mainly those with national or international reach. The ‘local’ community needs two newspapers (for political perspective) to help engage citizens in their own local affairs, and, by extension, to motivate voting.

    Reply
    1. Pelham

      Agreed. I read of a study just a few years ago that found residents in smaller cities that lost their newspapers found their towns to be darker, more threatening places. I can easily imagine that.

      I grew up in a Kansas town of about 9,000 that, in the 1960s, offered the possibility of subscribing to as many as 7 newspapers, 6 of which were published out of town but really wanted our readers. We subscribed to 2 big-city dailies (morning and evening) and the local paper, which published 6 days a week. It was glorious!

      Reply
  2. Ignacio

    Regarding subscriptions one of the drawbacks is that you have to have some trust on what an outlet is publishing to compromise and these days we are short on trust. If one wants to stay informed and contrast news publications more that one source has to be examined. As the article says very few are going to subscribe to more that one outlet.

    Reply
  3. Louis Fyne

    My local newspaper editorial content and slant of news coverage has gotten “woke.”

    It’s getting annoying as I like my news non-partisan—just the facts ma’am and leave opinion to the op-ed section. but I’m likely in the minority and anyone genuinely conservative likely has stopped reading long ago.

    In a world of declining readership I would think that newspapers would want to broaden their appeal across the political spectrum—-but I guess the click-algorithms (or human editors) say otherwise.

    I’ll only shed half a tear if they go under—-but fortunately they’re on relatively solid footing. But I’m not sure if they can survive long-term on high school sports and woke news/opinion.

    Reply
  4. Marshall Auerback

    Very good of Yves to highlight this problem. The other important point hinted at in the article (via the big donations from Google and Facebook) is that the death of a serious and independent newspaper sector is highly corrosive for democracy as well. Eight years ago, David Sirota wrote an excellent piece highlighting how newly minted newspaper monopolists in a slew of local markets are also well-known political puppeteers. I lived in Denver and saw how magnate Dean Singleton did this first-hand when he closed down the Rocky Mountain Express (after merging it with the Denver Post). Singleton then played a big hand in affecting the news coverage in subsequent elections, to cite one obvious example of how democracy gets perverted. The whole article is well worth reading: https://harpers.org/2012/08/the-citizen-kane-era-returns/

    Reply
  5. Carolinian

    I’d say it’s important to bear in mind that it isn’t just about the internet. Arguably television has had a much greater impact on the news business and some of us are old enough to remember the creation of USA Today and the widespread derision of “McPaper” that followed. It was surely inevitable that a medium that gives you non stop pictures and moving ones at that would supplant the good and the gray print version. Now the reporters all aspire to be TV stars and give us “narratives” to fit the more infotainment oriented medium. It’s really only the business side of print that has been K.O.-ed by the internet. Arguably the news and information side was already quite decayed.

    Reply
  6. Michael

    This has been going on for so long and few seem to have noticed outside the industry. Virtually all those ad dollars that pay for shiny buildings and free lunches at Google and Facebook were once directed towards newspapers and magazines. Advertisers found microtargeting and pay-per-click a model more calibrated towards ROI, never mind that they still buy gobs of TV advertising. It doesn’t help that newspapers and magazines have been largely stagnant in their business models. They seem to hope for a time machine rather than trying to build a bridge. It’s depressing and I hope newspaper and magazine publishers try something new and different. For a start, they might want to accept subscription money when it’s offered.

    Reply
  7. The Rev Kev

    In an ideal world you would have national papers like the New York Times and the Washington Post on the net behind paywalls where they are safely esconded in their own garden. Meanwhile all local communities would have their own paper newspapers that survive on subscriptions and ads but as the economy has been wrecked, I cannot see this happening with much success. The rot really began with Clinton when he changed the media laws so that dozens of media companies ended up becoming only six massive media companies. Maybe the only real solution is to break them back up again into scores if not hundreds of media companies.

    Reply
  8. New York Guy

    There is one additional, overarching fact which is additive to the newspaper/media destruction being wrought by the Internet. Namely, that we are now living in the first phase of a post-literate society. By this I don’t mean that people don’t know how to read, but rather that the way they acquire and interact with information is primarily by visual means (video, instagram, etc).

    This is essentially a McLuhanesque take on what’s happening. Indeed, it’s wild to see how “modern” and still-applicable are the many insights in McLuhan’s foundational 1964 book “Understanding Media.” (Neil Postman’s work, e.g., “Amusing Ourselves to Death,” is also apt.)

    Anyway, I guess my point is that the Internet and covid-19 are accelerating dynamics that were already underway, i.e, the shift from the written word to visuals. (In this regard, USA Today was both ahead of its time and a harbinger of what was to come.)

    Personally, I believe the death of newspapers will accelerate the shift to centralized information a la 1984, As Yves notes, nearly all of current news coverage is chasing the same stories, so we’re pretty much there already, it’s just that the superfluous bodies (dying media properties) haven’t yet been removed from the battlefield.

    A separate question of interest is: What will those tens of thousands of people whose jobs are or will soon be gone do for a living? There’s a paradox here: We’re a post-literate society and we’re also post industrial. In post industrial societies, people don’t make their livings making things, they manipulate symbols (e.g., writing). But now a large category of symbol manipulation jobs are going away. I don’t really have an answer but I think this will be another pressure point toward UBI (universal basic income).

    Reply
    1. flora

      Namely, that we are now living in the first phase of a post-literate society. By this I don’t mean that people don’t know how to read, but rather that the way they acquire and interact with information is primarily by visual means (video, instagram, etc).

      That must be what happened to so many print editions of once readable magazines. Now too many magazines have gone to a layout of lots of entire full page story pictures accompanied by a large 14pt font paragraph while printing the story proper in something like 8pt or 7pt or smaller font. I have good eyesight yet find trying to read the stories in print editions causes serious eye strain. An unpleasant experience.

      Reply
    2. Senator-Elect

      Great comment, thank you! Was musing about the centralization of or reduction in narratives recently. While Canadian media has always kept a close eye on American happenings, since Trump was elected, he has been the top story here far more than previous presidents. The other day, Trump’s rally flop was the top story at CBC and the Guardian, yet not at the NY Times. So many bad editorial decisions.

      In the old days of the national broadcasters, there was a national narrative because everyone watched the same news or the same hockey game every night and talked about it the next day around the water cooler. Now, there’s a global narrative. That’s a lot of people reading and talking about the same, distant thing compared with the local things they read and talked about before the invention of the telegraph. (Reading Postman right now, and he says the telegraph enabled “the news” to exist.)

      Reply
  9. XXYY

    To me, part of the problem is technical. An internet news consumer is going to read from dozens or hundreds of different publications each day, and maybe a different set the next day. There’s no way anyone can “subscribe” to a hundred different news sources; even if it were financially possible, the mechanics and overhead of maintaining 100 different subscriptions is absurd.

    Further, how much is one article actually “worth” to such a news consumer? At, say, a penny per article opened (not necessarily read), one is spending $365 a year for news, a healthy amount. Surely an article is not worth much more than this. Yet there is no way to be charged $0.01 for opening an article. Most news platforms have a model where you pay a large fixed sum, regardless of how much of their product you consume. Most of their material is worthless, or at least uninteresting to any given person. Expensive fixed-price subscriptions are a business model left over from the 1970s, where there was one paper in town and you got all your news from it.

    What would be nice is to be able to pay into a “personal news fund”, which would then be doled out according to what I actually read.

    One does not mind paying for news if it’s reasonably priced and there is a practical way to do it. But this arrangement does not seem to exist at the moment.

    Reply
    1. PaulHarvey0swald

      I’ve been thinking about this for some time. It seems like there is room for (and I hesitate to say it) a middleman here. Something like PayPal, but for micro purchases. It might work like this: I set up an account, put $50 in it. On the other end the content provider attaches to the middleman. They charge 10 cents for some content. A song, an article, even an image or video. The vendor gets paid by the middle man, the middleman takes a cut, and I don’t have to register with a couple dozen content creators. Maybe that’s out there, but I haven’t found it. If this was available I’d be interested in it – on both ends. Like you brought up XXYY, news providers should be thinking about this type of subscription model, instead of only the “all or nothing” approach. I say there is room for both. I dabble with financial news and I land on the FT site occasionally. A full subscription is too much, but once in a while I’m interested. (This is poor example since a simple registration is all they require, but you get my point.) Same for the NYTimes, WaPo, LATimes, and scores of others. On the other hand, I do subscribe to Tom Tomorrow, and the NIb because I don’t want to miss anything they put out. And the “this is your 1st of 3 free articles this month” is just shooting themselves in the foot. I use one device at work, and a second at home. I don’t game this method on purpose, but it can’t be all that hard.

      Reply
      1. Jeremy

        Clear your cache and cookies and use a VPN and you’ll always beat the “this is your 1st of 3 free articles this month” !!

        Reply
  10. sam

    +100 to your last para: we are increasingly reliant on a few national papers and concentrated media networks, supplemented by monopolistic online platforms. I am of the age that still reads the NYT every morning and watches PBS news every evening and I am constantly outraged by their outright falsehoods (much of the Russiagate coverage), selective reporting that amounts to lying by omission and suppression of many important stories that can only be found here or other independent sources. That’s far better than nothing but how long will it last before Google standard setters succeed in silencing all who don’t echo the official narrative? The First Amendment applies only to government action so will be a dead letter when all public discussion is subject to direction and self censorship by a few media powers.

    Reply
  11. Pelham

    “If your business depends on a platform, you don’t have a business.” True.

    But newspapers do have a platform (or medium), in print. The problem, IMO, is that they’re not using it properly. To begin, newspapers across the board should have absolutely zero presence online other than subscriber services. Then they should copyright all original material and sue the pants off any party online that copies it. Next, they should collectively work to destroy the online platforms by repealing Section 230 of the Communications Decency Act, thus subjecting the platforms to the same laws that every other publication is subject to.

    However, it may be too late for such mild measures. We may need to decide whether we want journalism (greatly flawed though it is) or the internet. Personally, I think the world would be better off if there were no public access to the internet, which would once again be confined to use by scientists and engineers for research purposes. And this is one genie that, with some effort, could actually be stuffed back in the bottle. I wonder how popular this would be with the broad public.

    Reply
  12. flora

    Thanks for this post.

    My midsize town still has a print newspaper, thank goodness. It’s gotten smaller over the past several years but still does good work reporting local stories.

    It’s reported on controversial redevelopment proposals, misguided attempts to re-designate truck routes from street A to street B (amazing how little people know and don’t ask about how a town/city actually functions), unsafe construction practices, questionable school board actions, financial budget allocations by city hall.

    The local newspaper is part of the town’s ‘immune system’ against questionable govt or private sector practices going unnoticed for too long.

    The paper also reports the local club and school sports results, business openings and closings, childrens clubs activities, winners of the summer county fair divisions – including best apple pie and best strawberry jam – and local elections, etc. This is important local news.

    Reply
    1. flora

      And of course it reports the local crimes, police reports, accidents, weddings, births, and deaths. Also important local news.

      An interesting thing is the people who subscribe to the print edition seem to have a better or more comprehensive idea what is going on in town than the people who subscribe to the digital only editions, or who only ready the free digital stuff. Maybe the print edition is laid out better, or is easier to find things in.

      Reply
  13. David in Santa Cruz

    There’s a reason why a free press is in the First Amendment: a democracy cannot function without accurate, quasi-unbiased, and widely-shared information about current events and government responses.

    But as Lambert likes to say, “Everything is CalPERS.”

    McClatchy, owner of the California Democratic Legislature/CalPERS house-organ the Sacramento Bee, has been in bankruptcy since February. Literally today, a group of bankruptcy creditors are suing in Federal court alleging that McClatchy entered into a fraudulent loan agreement with Private Equity sharks, Chatham Asset Management, to screw the other creditors — including former Knight-Ridder and McClatchy executives bought-out over the past decade of consolidation.

    https://www.mcclatchydc.com/news/nation-world/national/article243808737.html

    Does Chatham sound familiar? They are CalPERS’ partners in the still-not-quite-unwound ownership of the National Enquirer. But that’s not all: CalPERS is pushing legislation to exempt “private loans” from the California Public Records Act (AB 2473 — write your State Senator), and after a recent amendment to expand the exemption, the California Newspaper Publishers went “neutral” on the Bill (essentially tacit support). Why? Do you think that CalPERS wants to own the SacBee through one of these “private loans,” in order to guarantee that they can tamp-down any hint criticism at all from what is in effect their house-organ?

    Follow the money…

    Reply
    1. Ana

      I can say from personal experience that even if one can interest a reporter from Sacramento’s newspaper of record in a slam dunk story, editors will typically spike it.

      Not making local trouble is the standard of journalism here. I don’t doubt that ancient rule is in action regarding the pension fund.

      Ana in Sacramento

      Reply
      1. David in Santa Cruz

        I find it particularly ironic that Tony Ridder, scion of Knight-Ridder Group and the once-fearsome-to-Sacramento San Jose Mercury-News, is one of the former executives suing McClatchy.

        Tony flew Knight-Ridder into the side of the mountain and lost it to McClatchy and a Gates Foundation/Hearst Corp funded consortium because he didn’t understand that “if your business depends on a platform, you don’t have a business.”

        Reply
  14. Senator-Elect

    Good piece. Couldn’t help but think this plays into the “decline of Western civilization” trend. Journalism (especially investigation, the search for truth) is critical to democracy, and we have known that newspapers are in trouble for over a decade now. Yet our governments have done nothing or made it worse. Our elites are just totally incompetent and useless. And we’re cruising along happily addicted to our phones, reading the same shallow, Trump-related clickbait. Where is the urgency? Even journalists themselves are acting totally helpless. Where is the leadership?

    Reply
  15. Alex Cox

    Regarding squillionaires buying up media, I believe The Atlantic is owned by the widow of Steve Jobs. As with the Bezos Shopper, for oligarchs money is no object. And there is certainly an agenda there.

    Reply
  16. McWatt

    We have two local newspapers that come out once a week. One is part of a big chain of papers and the other
    was created by the local political party to be a mouthpiece for selling the party line. Neither of them fulfill the very important task of keeping things honest, down to the tiniest tiny parts of local government things are not honest. I don’t suppose in looking at local history they have ever been “honest”. Perhaps the strong impression from my youth that there was such a thing as honesty was really always an illusion.

    My Dad used to say “McWatt, you can’t fight city hall” and then go out and file a lawsuit against City Hall or the county or the state. Whenever he won a case, and he won quite a few, the law would later be conveniently changed so the illegal acts could now continue legally. But he never gave up, even into old age.

    There are an incredible number of people, at this point I’d have to say a vast majority, that don’t care about the main tenant of civil government; that everyone deserves to be treated equally before the law. The concept of no single person having more “rights” than any other. This carries through to all aspects of life; driving, biking, hiring, firing, walking, building, tearing down, living. As far as I can see, very few, anywhere, are generally obeying our laws.

    I may be old, and I may be cranky, but it is a true observation.

    Man the barricades, light the tires on fire, call me, I’ll bring the red banner.

    Reply

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