Local news outlets struggle to survive coronavirus fallout

March 29, 2020 Media

A massive surge in online readership during the coronavirus outbreak is coinciding with a sudden drop in ad revenue that could cripple local news outlets already struggling to survive.

Several newspapers and alt-weeklies have announced pay cuts and layoffs, with some shutting down operations altogether. The turmoil has also brought fresh scrutiny on big tech platforms such as Google and Facebook, who critics say had already seriously weakened the news industry.

Federal and state lawmakers have opened more than a dozen inquiries into those companies’ business practices, scrutinizing possible anti-competitive behavior, including with Google’s search and ad business and Facebook’s advertising tools.

The efforts have included bipartisan legislation introduced in the House and Senate that would grant a four-year antitrust exemption to publishers, allowing them to collectively negotiate with Google and Facebook on the terms of how their content is distributed.

Rep. David Cicilline (D-R.I.), one of the co-authors of the House bill, said that the coronavirus pandemic is highlighting how urgent legislative action is. 

“Local news outlets were on life support before the COVID-19 outbreak,” Cicilline said in a statement to The Hill. “This public health crisis has highlighted the urgent need in communities across our country for accurate, trustworthy local news. At the same time, this crisis has pushed many newsrooms even closer to extinction.”

The bills, however, don’t address the underlying problems with the digital advertising model, said Sarah Miller, the executive director of the American Economic Liberties Project, an anti-monopoly advocacy group, in particular the ability of tech giants to target ads to specific consumers.

“Our fear is that you can’t have a vibrant democratic society if you just allow local and independent news to fall victim to Google and Facebook’s rapacious and pernicious business model,” Miller said, calling for banning the tech giants from selling digital advertising.

“If you don’t allow Facebook and Google to sell advertising, that will eliminate or at least mitigate substantially the shift of news revenue from local and independent institutions to [these companies],” she added.

Miller cited the loads of data Google and Facebook amass to enhance their ability to target ads, noting that they have the most sophisticated stores of data that other businesses can’t compete with. An advertising ban would send “revenue towards news sites that have more integrity,” she claimed.