This has been the journalism industry’s worst week in recent memory, with around 1,000 people losing their jobs. Layoffs at Gannett cost dozens of jobs at newspapers across the country, from the Indianapolis Star to the Tennessean to the Arizona Republic. Verizon announced it was cutting seven percent of its total workforce, leading to significant cuts at HuffPost, including the elimination of its entire opinion desk and distinguished investigative reporters. On Friday, BuzzFeed began laying off 15 percent of its staff, including its entire national desk and national security desk.
This industry is broken. Print outlets, particularly local newspapers, have been decimated for years—first hamstrung by the loss of their classified advertisement monopoly, and then ultimately undone by a lethal combination of digital disruption, mismanagement, and private equity. But now web outlets, once held up as the future of news, are also struggling to survive. “It’s clear that we have a digital content bubble,” Rasmus Kleis Nielsen, the director of the Reuters Institute for the Study of Journalism at Oxford University, told the Guardian. “There’s no question we’re going to see more cuts, both in legacy media and digital-born ones.”
The blame increasingly has been laid on two culprits: Facebook and Google, whose ad duopoly presents an existential crisis for the industry, starving digital and print media outlets of essential revenue. “The problem seems to be that it’s gotten harder and harder for news outlets to make money off of the readers they have because such a huge share of advertising spending is sucked up by Facebook and Google, with what’s left increasingly going to Amazon,” Slate’s Ben Mathis-Lilley argued, noting that many of the outlets hit by layoffs, including BuzzFeed and Vox Media, have hundreds of millions of readers.
There’s no question that breaking up Facebook and Google would have a number of positive social and economic effects in America and around the world. While it would clot some of the bleeding in print and online journalism, though, it won’t save the industry. That will require much more ambitious and holistic acts: public funding, philanthropy, and increased taxation, particularly of internet service providers.
The arrival of the internet, and Craigslist in particular, was devastating to newspapers and magazines, which had enjoyed a longstanding monopoly on print ads, classified, and otherwise. But this disruption merely accelerated existing trends. Newspapers’ market penetration began a moderate decline after the advent of television in the 1950s, while print circulation began to dip during the Reagan administration, years before the digital revolution.
Surveillance has been the key to the rising dominance of Google and Facebook. The old model could only offer a localized readership: If you were a shoe store in Scranton, Pennsylvania, you would advertise in the Scranton Tribune and hope to reach people looking for new Air Jordans. Today, Google and Facebook can provide detailed information about millions of users, allowing national outlets to micro-target sneakerheads. These sites, as Mathis-Lilley notes, have also become the source of news and information for hundreds of millions of people:
Moreover, many people now use the two tech giants’ sites/apps as their “front page” for finding news—all told, for example, Google and Facebook users click links to Slate about 18 million times every month. And the tech giants get to show users ads next to those links, ads that relate to the stories’ subject matter. News sites don’t get a cut of that either, and they can’t bargain for it by threatening to make their sites inaccessible from Google and Facebook because doing so would instantly cut their audiences in half if not more.
This is a big problem for just about everyone hoping to reach a paying audience—with Facebook and Google essentially taking a finders fee for all online advertising. But it’s especially tricky for news outlets, who struggle to monetize stories that appear in Facebook and Google. Breaking up their ad duopoly would undoubtedly help, as it would add more competition to the online advertising space—though a ban on tracking, and therefore making advertising less efficient, would probably also have to be implemented. This would create a more equitable economic arrangement, but there’s no reason to believe that this alone will solve the journalism industry’s financial woes.
Other changes will be necessary, such as increased regulation of hedge funds and private equity and a commitment of public investment, particularly for local journalism. Some large-scale digital companies like BuzzFeed can make the case to investors that scale will lead to profitability—even if they may be incapable of producing the level of returns that venture capitalists demand. But smaller outlets, especially those tied to a geographic area, face a host of greater hurdles: diminishing readerships, a decline in small businesses (and thus in the advertising base), and the increasing centrality of New York and Washington, D.C., which drain talent and investment from elsewhere.
Last year, New Jersey took a miniscule step in the right direction, pledging $5 million to fund local news. Facebook and Google have also taken minor, mostly inconsequential steps to boost local reporting: Google’s Bulletin provides crowdsourced news, while Facebook pledged to put more local news into its News Feed. But what’s needed is sweeping reform and an allocation of billions to help fund local reporting. CJR’s Emily Bell has suggested that tech companies spend billions funding journalism, in part as a kind of reparations for the economic harm that they’ve caused. “What independent journalism needs more than ever from Silicon Valley is a significant transfer of wealth,” she wrote. “If, instead of scrapping over news initiatives, the four or five leading technology companies could donate $1 billion in endowment each for a new type of engine for independent journalism, it would be more significant a contribution than a thousand scattered initiatives put together.”
Given the increased scrutiny Google and Facebook have received, and the latter’s growing hostility to the media, this seems unlikely. Thus far, with the exception of The Washington Post, which is owned by Amazon founder Jeff Bezos, investments in journalism from techno-capitalists have been insignificant.
There are some signs that Congress and the FTC will act against the tech giants in the coming years, but few Democrats (and even fewer Republicans) seem to have the stomach for the sweeping reforms that would yield a massive impact for struggling news organizations. More states may take action to fund local reporting. But there is no momentum on the federal level for such funding, or really for anything meaningful to help this hemorrhaging industry. In the time it will take to build such momentum, many organizations will fold entirely. We can only hope that, once there’s a plan in place to save American journalism, The New York Times and The Washington Post aren’t the only ones around to report on it.