Can journalism survive without advertising revenue?

Over 2000 journalists lost their jobs in January and February, after several digital and print media outlets such as BuzzFeed, VICE, Gannett and Huffington Post announced that their companies were scaling back the number of reporters in their newsrooms due to heavy losses in advertisement revenue.

Reporters losing their jobs at newspapers is not uncommon in the digital age. Between 2008 and 2017, the number of newsroom jobs in local and regional U.S. newspapers dropped by 45 percent to 39,000, according to the Pew Research Center.

But the heavy cutbacks to purely digital media outlets that grew quickly as startups like BuzzFeed and VICE are a warning sign for other online publishers to think seriously about their business models and how they plan to adapt them. Podcasts, newsletters, subscriptions and special events are all ideas that outlets are implementing to try and make up for the massive loss in ad revenue.

The Seattle Times reported in January 2019 that its digital subscriber base grew 38 percent to 40,000. Don Shelton, executive director, created two “mini publishers” in 2017, which are editors that work in tandem with business intelligence teams to identify what kind of content readers are loyally reading. The first two teams concentrated on local politics and The University of Washington football.

In 2018, Shelton expanded the number teams and devoted them to other subscription drivers such as the Seattle Seahawks and Mariners, opinion, real estate, outdoor and travel and local food and drink.

Ken Doctor, media analyst, said even with The Seattle Times’ success to accumulate subscribers, the publication still needs to add up to 50,000 digital subscribers to make up for the declines in online advertising.

Many publishers already know that commercial internet makes profitable journalism incredibly difficult. Now, they are seeing in many cases, it is almost impossible.

Smart phones, apps and social media outlets have drastically changed the media consumption habits of people.

Around 68 percent of adults in the U.S. receive at least some of their news from social media platforms, and the majority of adults said they chose Facebook as their primary source, according to the Pew Research Center.

Right now, Facebook’s evaluation is above $470 billion and Google’s market value has risen from $200 billion in 2012 to almost $800 billion in just six years.

Facebook and Google own the digital advertising market, but Amazon will soon chip away their power hold.

While it is still relatively small in the digital ad industry, Amazon is among the companies, who have emerged as a legitimate competitor to the duopoly of Facebook and Google.

As of now, eMarketer has Amazon as the fifth-largest digital ad platform– possibly gain 2.7 percent of the U.S. market this year, according to The Wall Street Journal. But by 2020, the firm expects Amazon to jump to third place, passing Verizon Communication Inc.’s Oath and Microsoft Corp., with $6.4 billion in digital ad sales in the U.S. alone.

In the same week that BuzzFeed announced its job losses, Facebook reported record revenues close to $17 billion for the last quarter of 2018, yet the record revenues come despite a year of negative publicity for the social media giant.

The United Nations blamed Facebook for furthering the genocide in Myanmar, there were serious questions concerning users’ data and privacy with the Cambridge Analytica files and the company received heavy criticism for its role in the 2016 presidential elections.

One of the chief mistakes most digital publishers made was to believe that platform companies, and particularly Google and Facebook, had any serious interest in helping them save their publications.

Platform companies collect and control a large amount of data. Far more than any other publisher. It enables them to offer more efficient advertising than any publisher, and the business of making online content profitable is engineered against anyone who wants to run even a sparingly resourced newsroom with experienced reporters.

In the 2018 fiscal year, the University of North Alabama paid Google over $300,000 for advertising. They paid $23,000 for advertising with local newspapers in Northwest Alabama.

Facebook and Google have begun to fund news at the local level to increase reporters and newsroom resources through programs such as Report for America, according to The Guardian.

Between the two, the digital duopoly has committed to spend $600 million for the next three years on supporting journalism, but involvement of big tech corporations in serious reporting is both ethically difficult and currently ineffective.

The long-term future of journalism is unpredictable and the short-term will be difficult, but journalists must continue to press on to serve the public.

The First Amendment may protect the press from government control, but it does not protect it from powerful corporations.

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