Local news media remains important for many news consumers,111 but attracting advertisers and getting audiences to pay for content remains a challenge. According to Mark Zusman, editor and publisher of Willamette Week, a Pulitzer Prize–winning weekly serving Portland and the Willamette Valley, the key challenge local news organizations face is “sorting out the business model.” This underpins all other e orts explored in this report.
As John Costa of the Bend Bulletin (Oregon) reminds us: “The business model is very important. You cannot have an artistic success without a financial one, not for long…. But the purpose of that business model is to make sure that you’re doing high-quality content because you have to collect readers/viewers in our business to stay vital.”
Achieving that goal, however, is not always easy. As Pew noted in its 2016 “State of the News Media” report, the trend lines for newspaper revenues and circulation are not pretty:
In 2015, the newspaper sector had perhaps the worst year since the recession and its immediate aftermath. Average weekday newspaper circulation, print and digital combined, fell another 7% in 2015, the greatest decline since 2010.
While digital circulation crept up slightly (2% for weekday), it accounts for only 22% of total circulation. And any digital subscription gains or traffic increases have still not translated into game-changing revenue solutions.
In 2015, total advertising revenue among publicly traded companies declined nearly 8%, including losses not just in print, but digital as well.
Those are the sobering statistics. But they’re also aggregated figures, so it’s worth noting that these headlines hide a myriad of experiences, including the view
that many small community papers have weathered the storm better than their metropolitan counterparts.
Nonetheless, all publications—large or small—are being shaped by a number of underlying factors that have had a profound impact on the traditional revenue streams local media has historically tapped into.
These factors include:
- Publishers receive “digital dimes” for what were previously “print dollars.”Newspapers have typically found that in the digital arena, they cannot
charge prices akin to the print monies of yesteryear. New channels for online advertising (such as Craigslist, Yelp, Google, and Facebook), coupled with new advertising practices, such as programmatic buying and targeted advertising, have changed the playing eld.
- Changes on Main Street have reduced the local advertising pool.Former Gannett Editor Kevin Anderson described this evolution in Sheboygan, Wisconsin, noting the reduced number of local traders: businesses that used to advertise in their local papers. “The shift from local businesses to national chains started long ago, and it had a profound impact on local media,” he observed, highlighting a nationwide trend.
- Online channels can deliver more targeted ads.Digital platforms that can reach audiences searching for a specific product, experience, or passion may be a better route for some businesses than general advertising. Their potential precision—as well as a scalable cost model —can also be appealing. Subsequently, the maxim (attributed to Henry Ford and others) that “half my advertising is wasted; I just don’t know which half,” no longer quite rings true.
What this means, as Zusman explains, is that publications need to “identify other sources of revenue that are consistent with our core competencies but will allow us to continue to finance journalism, which is basically the reason for our existence.”