The death of local news and why it matters

Dan Kennedy, journalism professor at Northeastern University in Boston, Mass., former media critic for the Boston Phoenix and author of several books, spoke to an online audience at the Peabody Institute Library (via Salisbury’s Scoville Memorial Library) on Thursday, June 24, about the future of local news.

Kennedy concentrated on newspapers, and said, bluntly, that local newspapers “are not doing well.”

Some 200 counties in the U.S. have no local newspaper, and 1,540 have just one, usually a weekly.

He called these areas “news deserts.”

It gets worse. In the last 16 years 2,100 papers have closed, and there are more “ghost papers” with “little or no reporting capacity.”

In that time, 6,000 newspaper jobs have disappeared.

Readers are covering more costs

Kennedy said the loss of classified advertising revenue to online services like Craigslist was a major factor in the demise of the newspaper business.

Papers typically counted on classified ads for 40% of their revenue.

Kennedy noted that Craigslist has perhaps 35 or 40 employees worldwide, while the Boston Globe media group employs 300 journalists.

“So news organizations are far more expensive to run.”

Facebook and Google also hurt newspapers in the area of display ads, which accounted for another 40% of revenue.

“Papers used to get 10% of revenues from readers,” Kennedy said. “Now readers are covering 50% of costs.”

And then there are the corporate and/or hedge fund owners who buy up struggling papers and commence “squeezing out revenue by cutting the newsroom.”

Newspapers with local ownership “can figure out strategies,” Kennedy said. But papers bought up by corporate owners have no choice but to follow the owners’ instructions.

The downside of no news 

This matters, Kennedy said, because local news is more trusted “in a time of polarization” than national news organizations.

Lack of coverage tends to lead to more corruption. Kennedy said financial institutions have noticed this, charging higher interest rates to municipalities without local newspapers.

And “we need an informed citizenry. If you don’t know anything about local government except what you read on Facebook, it’s harder to cast an informed vote.”

Funding alternatives

Kennedy then ran down a list of independent newspapers, some with print editions, some all-digital, and all trying various nontraditional business models.

The Colorado Sun, for instance, was formed by former Denver Post employees. The digital paper is a “public benefit corporation,” and it is growing. Kennedy said the Sun, with the help of a group of philanthropists, is considering buying a chain of small newspapers.

The Mendocino Voice started off as a for-profit website and is now a co-op, owned by the employees and readers/members. Kennedy said that the Voice will soon have 10 or 12 staffers, an adequate staff for the California county of about 50,000 people.

Closer to home, Kennedy wrote a book (“The Wired City”) about the New Haven Independent, which is a news website and radio station.

Kennedy offered some ideas for helping the newspaper business. 

He observed a recent move in Australia to force Facebook and Google to pay for news. A proposal for a $250 tax credit for local news subscriptions or donations “might help at the margins.”

He floated the idea of tax incentives — or disincentives — to encourage local newspaper ownership.

“Imagine if chains could enrich themselves by selling to local owners.”

There have been serious proposals for direct government funding of news organizations, which Kennedy said he was uneasy about.

“That’s a fraught situation.”

He did note that in New Jersey the state government established a fund that local news organizations can apply to for funds to do “certain kinds of reporting.”

Kennedy was asked if print newspapers are going to survive.

“I thought print would be gone by now,” he replied. “I think we’ll see big papers cut back on print days, with one weekend edition, or Sunday only, because print ads still have some value.”