By Michael Shapiro
These are tumultuous times for publishers. In the past two months, there has been a steady stream of headlines about job losses, hedge fund takeover bids and consolidation, all leading to a broader conversation about the viability of news as a business.
Local news, in particular, has been in sharp focus as Gannett announced that it was the target of a hostile bid by Digital First Media, owned by Alden Global Capital, a hedge fund known for slashing costs and thinning out newsrooms. Gannett, which owns local and regional newspapers around the country, itself is cutting newsroom jobs in an effort to boost profits. A successful takeover by Digital First Media would result in more of the same, further increasing the void in critical local coverage.
This all leads back to a frighteningly familiar question – can local news also be a viable business? I believe it can be.
A recent study by the University of North Carolina’s School of Media and Journalism showed that at least 1,300 communities had lost all local news coverage since 2004. Many local hardcopy papers have perished as a result of a confluence of factors. Readers moved online, subscriptions dropped, ad revenue stagnated and the overhead became too heavy a burden. Others have been acquired by multinational corporations, hedge funds or private equity, which then gut newsrooms to squeeze out a profit. Still others are trying to survive by regionalizing their coverage to meet financial burdens while commensurately reducing the amount of local news reporting in each town or city in its coverage area.
Curiously, little of what has happened in the industry is a result of lack of demand for local news. People still want to know what is happening in their community, from town council meetings to the scores of local high school sporting events. The real problem is scale.
We need to rethink our approach to the business of local news. We have at our disposal the vast potential of the internet, not only as a tool to distribute content, but also to foster collaboration across the globe. I am optimistic that the opportunities the internet has presented have yet to be fully realized.
Digital-first outlets need not get bogged down with the overhead of maintaining physical offices in expensive real estate markets or bricks and mortar infrastructure. The internet has given us the opportunity to develop and provide local news outlets with on-demand tools, administrative support and the ability to offer local ad products at scale, so they can focus on doing the work of journalism and do it profitably.
While technology has created opportunity, it has also created something of a mirage. It has given rise to the idea that media companies can be compared to the next Google or Amazon and must be run top-down, rather than bottom-up. From a distance, it made sense, but up-close the realities of running media businesses have become apparent, serving up disappointment to the investors who thought they were chasing the next great tech unicorn. Then, a story we’ve regrettably heard many times over unfolds. Cut costs and strip newsrooms to squeeze out every last penny.
The good news is, there is a difference between building a sustainable, profitable business and chasing unicorns. There is hope for local news. To give local news a fighting chance the answer may be deceptively simple. Let’s stop putting local journalism in the vise-grip of unrealistic expectations.
Michael Shapiro is CEO and publisher of TAPinto.net, a network of more than 80 independently owned and operated local news websites in New Jersey, New York, Pennsylvania, South Carolina and Florida. This post originally appeared on Medium at https://lnkd.in/ez7K63M, and is re-posted here with the permission of the author.