The dis-economies of scale for small town newspapers (and the rise of local indie players)

This post originally appeared on The Media Briefing. It was announced on 16 June, 2017, that The Media Briefing would be shutting down after the purchase of its parent’s company media events business, which did not include the content side of the business.  I wish the excellent staff there the best. If you’re in the UK looking for some great journalists, editors and analysts, let me know. 

In the last 15 years, more than half of the jobs at newspapers have disappeared, down from 412,000 to 174,000, according to the Bureau of Labor Statistics. While I don’t want to reflexively equate newspapers with local journalism, there is no way to ignore such a tremendous loss in local media capacity, especially in small towns and cities.

Three years ago, the Sheboygan Press, where I was Executive Editor,had three full-time reporters, two sports reporters, a photographer, a local news editor, a night editor and a digital editor to cover a city of 50,000. We shared an opinion editor, a features editor and a sports editor with one other site, and they were player-managers who helped provide local reporting and content. Now locally, there is only a news editor, two reporters and a photographer. That’s it. That’s the decline in only three years. Yes, there are shared resources across an 11-newspaper group, but it is rare for those staff to provide truly local coverage.

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Major metros, second- and even some third-tier cities often have three or four TV stations to provide local coverage, but thousands of smaller communities and millions of Americans have lost local news coverage, sometimes entirely. The Columbia Journalism Review focused on these local journalism losses this month and said cuts and newspaper closures are creating “news deserts”.

This crisis is just starting to get the attention that it deserves, but a lot of the conversation is still focused on major metros or cities with more than 100,000 people. Yet in thousands of smaller communities, the crisis looks very different, and the strategies and the business models needed to save these local news sources are very different. The industry is consolidating, but large newspaper groups are treating all markets as if they are the same. Instead of saving papers like the ones I used to manage, the chains’ strategies are creating dis-economies of scale that threaten to wipe out small community newspapers.

Strategies that don’t scale down

In its coverage of the local journalism crisis, CJR called Gannett the “last great local hope”. I disagree. Large groups like Gannett are now running regional strategies that don’t deliver dramatic cost savings at smaller sites and damage their ability to deliver truly local content. Indeed, strategies designed for the metros caught us coming and going: the cost efficiencies didn’t really amount to much for us, while the ad strategies often priced us out of the local market. So any savings were quickly offset by declines in revenue because we had fewer sales staff selling less ad space, and new digital strategies didn’t scale down to our communities.

For example, Gannett, like many other publishers, has centralised newspaper design in a handful of centres. Gatehouse has taken the model to the an extreme with a single centralised design centre for all of its 125 daily newspapers and hundreds of “community newspapers”.

 

While I appreciate the need to make the print production process as efficient as possible, this kind of streamlining has to be done only when it makes sense, especially economic sense.

 

Our contribution to the design studio budget would have hired two designers locally so not only were our cost savings minimal to non-existent, a lack of local market knowledge sometimes led to poor design decisions. For example, the designer usually used huge front page illustrations, like this one from a Gatehouse newspaper but our readers interpreted to mean that we didn’t have content to fill the page. It sent entirely the wrong message.

Ad strategies that didn’t work for smaller sites

Gannett’s centralised digital marketing services didn’t work for smaller sites either. The floor to engage the service was a $5000 monthly spend and, in smaller markets like mine, that was the annual spend for a lot of our advertisers. Fortunately, I worked with amazing local commercial staff and managers, and we came up with our own digital ad solutions.

Research by the Center for Cooperative Media at Montclair State University in New Jersey found a decline in ad blocks of 34 to 40 percent across the four newspapers they reviewed in that state after they were acquired by Gannett. The researchers said:

“This could indicate a variety of things; there could be fewer resources committed to garnering ads from local businesses, local businesses may have decided to pull their advertising for some reason, or it could be some kind of strategic decision on the company’s part.”

Needless to say, fewer ads means less revenue. Less revenue has meant a download spiral that Gannett is struggling to check.

‘Wistful self-delusion’

Gannett says that it is a “local-to-national network”. While that acknowledges the nationalisation of vast parts of the US ad network, it actually doesn’t make either economic sense or often journalistic sense for small-town news services unless they are little more than one reporter bureaux that feed a regional product. With two reporters left in the sites that I used to manage, in reality they aren’t far from this. Once they are reduced to bureaux, Gannett’s 50 or so small sites will have ceased to be local in a way that my communities define it.

The upside is that Gannett now has retreated from these small towns to such an extent that local competitors are rising to take their place. Sadly for the staff still at those sites, this is putting additional pressure on small Gannett properties.

There is no silver bullet solution to the crisis in local journalism, but as for hope, I don’t look to the large chains in the US. Their consolidation and cost-cutting strategies have run their course.

Rather, I look to local journalism entrepreneurs to create a range of truly local experiments that explore new ways to serve their communities and new ways to generate revenue. I think for local journalism, the days of mass print are over. We are returning to a much more distributed model as we enter the local digital era.

Some advice to people thinking about studying journalism

Through my notifications, I spotted this on Reddit, a senior in high school thinking about studying sports journalism. The Redditer is concerned that jobs are scarce and that the pay would be crap unless he lands a gig at ESPN. In my 20-year career in journalism, part of me wants to say twas ever thus, but here is my response:

As someone who has worked in journalism for the last 20 years but now “does things to support my journalism habit” and am looking for a second act for the second half of my career, I would say that you can do this, but think of two things (at least): A) Transferrable skills B) a double major that gives you solidly marketable skills outside of the exceedingly competitive sports journalism market. That second major could be sports marketing or simply marketing. (Or if you’ve got the resources and the drive, get a master’s degree outside of journalism. You’ll have a better sense of what you want to do once you’re at university.)

Also, if you really want to go the sports journalism route. Get writing and doing video as soon as possible. It was true 20 years ago when I was starting and it’s ten times more relevant now that you need to start building your personal brand and portfolio immediately.

And a little context, my last full-time job in journalism lasted 21 months as a regional executive editor for one of the major US newspaper groups. The last round of cuts a month ago by the group in the region where I used to work wiped out half of the local sports staffs.

Let me end on a positive note. I may not be working full-time for a news organisation now, but I have had an utterly amazing career. I got my start as a cub reporter in western Kansas in the mid-90s. Four years after I started, I landed in the BBC’s Washington bureau as their first digital journalist outside of the UK. I moved to the UK in 2005. I worked for the BBC a little longer and then moved to the Guardian in 2006. In 2010, I took a buyout. It gets a little less predictable after that, which is the story for a lot of journalists my age.

But now, I have my own little media consultancy. Who am I kidding, I’m a one man consultancy. This year, I’ve written a report on newsroom innovation management for the Reuters Institute at Oxford. I’ve traveled to 11 countries already this year doing workshops, conferences and consulting with media companies and industry groups. I informally advise digital media start-ups and do some fundraising for them. It’s a lot of work. It’s a lot of fun, but it is a lot of create your own adventure too. Best of luck!

I’m not going to say that this is the end all and be all of advice. It’s an exciting time to enter journalism, but I think this Redditer also understands the inherent risk in the industry right now. It used to be that journalists graduated from junior reporting positions that paid two cents more than f*&k-all to gradually either well paid senior writing positions or leadership positions. At the moment, that career path is broken. Now journalism has a rise or retire system similar to the US military, well apart from the pretty good retirement benefits.

Most of the regional journalism jobs that are have disappeared in the US over the last ten years will not come back, and most of the digital jobs are in high-rent cities — New York, Washington, SF and LA.

We’re in a moment when what was is being slowly dismantled, and we’re not entirely sure what will be in the future. That’s exciting, but the ride is a little bumpy, to say the least.