The local news crisis will be solved one community at a time
Though the collapse of community journalism is real enough, we believe that its causes are only partly understood. Researchers generally focus on the changes wrought by technology over the past quarter-century — changes that tell an important story, but not the whole story.
It’s true that classified ads offered by Craigslist, a mostly free service, wiped out what had accounted for about 40% of newspaper revenues overnight. And yes, Google and Facebook dominate digital advertising, leaving news organizations to fight over scraps.
Our view, though, is that these challenges would be manageable if it weren’t for corporate greed. Starting in the 1970s, publicly traded chains began taking over newspapers, extracting massive profits and cutting back on coverage, leaving the business unprepared for the deluge that was to come. More recently, hedge funds have moved in, bleeding newspapers of their last remaining revenues rather than investing in the future. Compounding all this is that, in many cases, corporate owners take on massive amounts of debt to build their chains and then extract revenues from their newspapers to pay it down.