The Future of Local News Innovation Is Noncommercial

In February, Sen. Amy Klobuchar of Minnesota reintroduced the Journalism Competition and Preservation Act, which is designed to make Silicon Valley’s billionaires pay for the harms they’ve inflicted on the news industry.

“What does Big Tech’s dominance over the news mean for Americans?” Klobuchar asked during a recent hearing on the legislation. Her answer: “Less revenue for local news, fewer journalists to do in-depth high-quality reporting, more exposure to misinformation and fewer reliable sources.”

The decline of local news is a tale often told against the rise of Silicon Valley. But equating the shuttering of local newspapers with the flourishing ad business at companies like Google and Meta (formerly Facebook) doesn’t get the story entirely right.

The news-business model itself—rooted in the belief that journalism must live or die by the dictates of the marketplace—is a primary reason that tens of thousands of newsroom jobs have been lost.

It’s easy to see why some blame journalism’s demise on the rise of digital platforms. Between 2008 and 2020, more than a thousand newspapers ceased printing, and the number of newspaper newsroom employees shrank by more than half. But while these numbers are alarming, they reveal only a part of the problem. Free Press found that more than 40 percent of the jobs lost in the newspaper industry since 1990 occurred prior to 2008 and the boom years for online advertising.

In other words, local dailies were shedding jobs long before a few tech platforms reported ad revenues in the tens of billions of dollars. It’s a trend that points to a deeper problem with the business of local news—and to the need for solutions that don’t merely make Big Tech subsidize old ways of producing journalism.

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Solving the right problem

To be sure, the popular adoption of the internet and the way the platforms changed how we consume information undermined the local-news economy. But we can’t ignore the ways that conglomerate and hedge-fund media ownership subjects news production to the predatory demands of profit and growth. Decades of mergers and acquisitions also saddled consolidated media companies with sizable debts that their top executives chose to service not by cutting their own salaries but by downsizing local newsrooms.

We need to reinvent the news economy from one that serves a few owners to one that serves the needs of democracy—including holding leaders accountable, challenging disinformation, and exposing corruption—while supporting the jobs and content communities need.

No amount of tinkering with free-market mechanics can restore the business fundamentals that sustained local news in the twentieth century. This peak era for daily newspapers was due in large part to their unique ability to bundle local information with daily advertisements targeted to local audiences. This newsprint formula no longer functions in a media world where connections are instantaneous and attention is the main commodity.

To make matters worse, this digital marketplace down-ranks the kinds of journalism that inspire people to participate in community affairs, support local charities, or speak out against injustice. Researchers at MIT found that information that prioritizes sensationalism over accuracy is most effective at keeping eyes glued to your app or website. As such, platforms have a built-in commercial incentive to engage users with “low value” content that holds viewers’ attention—and not the often costly news reporting that bolsters civic participation and holds local officials to account.

It’s not clear how the Journalism Competition and Preservation Act will alter that basic equation or create a sustainable news model for the thousands of communities across the country where people have little to no access to credible and comprehensive local-news sources.

The legislation would give broadcasters, publishers, and other news producers an “antitrust exemption” to collectively negotiate for payments from powerful online platforms. Its primary beneficiaries would likely be national and international news conglomerates, the companies least in need of a bailout. When Australia implemented a similar rule—encouraging payment negotiations between news businesses and the platforms that sometimes feature or link to their content—the country’s largest media outlets were the first in line for payouts from Google and Facebook.

Rupert Murdoch’s News Corp is getting tens of millions of dollars a year from these arrangements, writes Nieman Lab’s Joshua Benton. “Meanwhile, the small fr[ies] in Australia media are getting bupkis.”

It’s no surprise, then, that the lobbyists representing consolidated media groups like News Corp, predatory hedge funds like Alden Global Capital, and consolidated broadcasters like Sinclair Broadcast Group are among the most vocal supporters of Klobuchar’s US legislation.

If news outlets are to survive over the long term, it won’t be because we’ve grafted their operations to digital enterprises that are more efficient at connecting advertisers to consumers—but less capable of separating fiction from fact, or disinformation from reporting that fosters democratic participation.

Doubling public funding is a start

Far too many of the bills circulating in Congress, including Klobuchar’s legislation, are designed to benefit existing media giants—many of the very same commercial operations that have gutted local newsrooms and profited from runaway media consolidation.

Clearly there’s a better way forward. Congress would better spend its time on bills that treat journalism as a public good. This is done by allocating public funds to support local innovations in noncommercial media.

The US hovers near the bottom of the list of advanced democracies when it comes to per-capita spending on federal funding for public-interest media. We spend about $1.50 per capita each year, while per-capita spending by Japan exceeds $50; per-capita spending in Germany and Sweden is more than $100. The concept of such funding for public broadcasting routinely receives high levels of bipartisan support in the United States.

As a start, Free Press has called for a doubling of public funds for noncommercial news and information. This kind of congressional commitment would recognize that propping up private industry alone won’t create a viable model for local journalism.

Dramatically increased public investment in locally engaged reporting would help support the wide array of new nonprofit outlets that are focused on meeting the information needs of communities that commercial media too often ignores.

To get there, Free Press has proposed a new tax on digital advertising to fund the kinds of innovative news production that’s now needed. A tax of 2 percent would generate more than $2 billion annually, enough to support new distribution models, especially those that don’t rely on data harvesting and targeted ads for revenue.

In New Jersey, Free Press helped conceive and create the New Jersey Civic Information Consortium, an independent nonprofit funded by a state-budget appropriation. The consortium, including representatives from public colleges and universities across the state, supports inventive local-news projects like the Newark News and Story Collaborative and the Bloomfield Information Project, which train local residents to report the news from their own perspectives.

This New Jersey experiment, which received overwhelming bipartisan support, could be replicated by other states to help put journalists on local beats from Key West to Anchorage.

It’s been encouraging to see the recent growth in other not-for-profit news models, especially those that amplify the voices of people of color. State and federal funding could also help spur the sort of attempts at hybrid commercial-noncommercial media that are being explored by dailies in Philadelphia, Salt Lake City, Seattle, and elsewhere.

These and other good ideas have been testing new strategies for news production. But they can’t fill the massive gaps left by the collapse of for-profit newspapers. One thing is certain: legislation that sends tax dollars to hedge funds or keeps an antiquated commercial model on life support isn’t the solution.

Lawmakers should provide comprehensive funding for noncommercial news instead of wedding a sputtering business to a Silicon Valley attention engine that can’t possibly foster the sort of journalism that is vital to civic health.

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Timothy Karr Timothy Karr is a senior director at Free Press Action, the national not-for-profit organization that advocates for just, equitable and democratic media.