Local news is in terrible shape. Or is it?
Two prominent industry observers are divided on the state and future of local news in the technology-driven information age.
Joshua Benton, director of the Nieman Journalism Lab, goes with terrible. His pessimism encompasses both local print and digital news. Matt DeRienzo, interim director of the Local Independent Online News Publishers (LION) association, agrees that local newspapers are in bad shape, but his outlook on independent local news sites is optimistic.
Benton is normally an optimist about all things news. But in a column last month, he said: “…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.” He concludes on an equally downcast note: “…it’s entirely unclear…how most local communities — the cities and towns where we live, work, and play — will find the information they need to thrive.”
DeRienzo, in an article he posted on Medium about the emergence of a new local news ecosystem, was more upbeat: “…there’s good news about what is likely to and already is starting to replace [local newspapers] — a diverse and eclectic mix of small, independent local journalism startups that are deeply rooted in the communities they serve. It’s not an easy or simple story for media watchers to tell, because there’s no single model or narrative, or big flashy company to write about.”
Benton and DeRienzo are both so intent on nailing their arguments that they ignore what local newspapers and their group owners have belatedly started doing to improve their digital platforms editorially and turn them into revenue machines with a chance to secure their financial future.
The Pessimistic View
Benton makes a point of noting that “newsroom employment dropped more than 10 percent in 2014 — the largest decline since the financial crisis.” But as his source, the American Society of Newspaper Editors (ASNE), said in its last employment survey, “some of the census questions do not match the work categories of journalists in cross-platform, multi-organizational and interdisciplinary newsroom settings.”
Many legacy newsrooms are being transformed by technology that is making news gathering more efficient, which means fewer reporters and editors are needed to produce the same and even sometimes better content. Until ASNE factors this newsroom restructuring into its surveys, something it says it will do for its next census, editorial employment numbers may not be that revealing about the health of local news.
Benton’s biggest worry is the new distribution platforms for news in general, like Facebook Instant Articles, Snapchat Discover, and Apple News. Local news sites, Benton says, don’t have the scale to benefit from whatever revenue the big platforms could send their way. But local news sites can create and benefit from scale through partnerships where advertisers buy millions, even billions, of impressions that are assembled on a single dedicated programmatic trading desk from the myriad local inventory. That is beginning to happen at the Local Media Consortium, whose members include more than 60 publishers with upwards of 1,600 desktop and mobile platforms. It’s too soon to call this effort a success, but Benton doesn’t even mention it.
Benton also ignores how local newspapers are pushing into alternate sources of revenue or seeking innovative ways to share costs without sacrificing coverage. One alternative revenue source with considerable promise is events. Utah Media Group, the agency that oversees revenue, production, circulation, and other non-editorial functions for Salt Lake City’s two newspapers, the Tribune and the Deseret News, grossed more than $3 million in sponsorships for its 12 events in 2014, LocalMediaInsider estimates.
The GateHouse Media chain of 78 dailies has created a “Live and Virtual Events” division headed by Jason Taylor, the fast-rising new president of its Western U.S. publishing operations and publisher of its Las Vegas Review-Journal.
On the cost-sharing side, the San Francisco Chronicle has turned to crowdsourcing to raise money for some of its high-cost investigative reporting. The paper is in the midst of a $15,000 campaign with crowdfunding platform Beacon to finance editorial coverage of how immigrants have fared in trying to win temporary H1-B visas for computer and other high-tech jobs in the Bay Area. Halfway through the drive, it has raised more than $7,000.
Benton is right to worry about whether communities are getting the information they “need to thrive.” But the news is not all bad. After years of staffing cutbacks that left its daily papers editorially crippled, Gannett is trying to reinvent local news with stories that focus more on the “why” than the “what” in their coverage of the chain’s 81 U.S. communities. Last year, I wrote about how this sea change was bringing new life and stronger community connection to the formerly sliding Asheville (N.C.) Citizen-Times.
That said, not all local newspapers and their corporate owners are writing comeback stories. The event revenue in which the Salt Lake Tribune shares may not be enough to save the paper, whose second-party owner, Alden Global Capital, has been trying to unload the property from its besieged Digital First Media (DFM) chain of 76 daily and Sunday papers. Benton’s grim prognosis for the local newspaper seems mostly informed by the continuing weak performance of chains like DFM than what’s happening at groups whose financial circumstances are not desperate, like Hearst or Gannett.
The Less Pessimistic View
LION leader DeRienzo’s grim outlook on the future of local newspapers parallels Benton’s. DeRienzo arrived at his dark view through personal experience — as editor and publisher of DFM’s papers in Connecticut. Unlike Benton, he says the “flailing business models” of the corporate legacies are creating digital space for entrepreneurial publishers to succeed.
DeRienzo cites many entrepreneurs whose sites are performing quite well from both an editorial and revenue perspective. He shows how “indie” publishers are using innovative approaches to increase revenue outside the display-ad box, like San Angelo (T.X.) Live CEO Joe Hyde, who is generating $10,000 per month from ads in Live’s daily e-newsletter.
But DeRienzo’s jeremiads against scale and venture capital are misplaced, especially when, as my analysis of the new Michele’s List shows, more than half of the “best” indie sites generate $50,000 or less in annual revenue. There’s no way such low-revenue sites will have the resources to achieve their potential even if they’re in strong markets.
The new generation of publishing entrepreneurs, some of whom migrated from legacy publishers, have created startups with their personal credit cards or by taking out a second mortgage. But is this a long-term business model? It didn’t help Mike Fourcher, one of the earliest entrepreneurial local news publishers, save his two highly regarded neighborhood sites on Chicago’s North Side from running out of money and closing in late 2012, nor did it help David Boraks save his two suburban Charlotte, N.C., sites, also highly regarded, from closing for the same reason earlier this year.
For all the risks of expansion, some entrepreneurs are venturing into their own, cautious versions of scale. Examples are ARLnow, with its four sites in metro Washington, Corner Media Group with its eight sites in Brooklyn and Homepage Media Group with its four sites in metro Nashville. The publishers of these mini-networks are not averse to outside investment, and some of them have already reached out and obtained such financing.
I don’t share Benton’s bleakness about the future of local news, regardless of the publishing source, nor DeRienzo’s Manichean view where self-financed entrepreneurs will prevail over corporate legacies that must satisfy “out-of-town stockholders.”
There’s room in the local news space for venturesome innovators whether they’re in publishing corporations that have finally moved beyond the cost-cutting syndrome or part of the admirable tradition of entrepreneurial community publishing. I’m rooting for both.
Tom Grubisich (@TomGrubisich) writes “The New News” column for Street Fight. He is editorial director of hyperlocal news network Local America, and is also working on a book about the history, present, and future of Charleston, S.C.