It’s a familiar story: “Hedge fund buys paper, guts newsroom.”
Countering that narrative is another, much less familiar, but increasingly common one: “Local paper gains ground, wins subscribers.”
The financial reality of the newspaper business is daunting. It’s not a get-rich-quick opportunity. But that doesn’t mean that newspapers can’t or don’t make good money. In fact, some are doing just that.
The vast majority of recent reporting on the news industry has emphasized the ways in which it is declining. The New York Times reported that more than one in five papers has closed over the past 15 years. The Pew Research Center published a study showing that newsroom employment has fallen by nearly 60 percent since 2008. The website FiveThirtyEight.com reported that readership dropped from over 55 million households to just 38 million between 2000 and 2018. And the Nieman Lab at Harvard suggested “unbundling” local news — that is, shifting towards niche publications because readers are no longer interested in newspapers that cover the whole community. While much of that is true, a big part of the story is missing.
“When we talk about the local news crisis, there are two parts,” said Dan Kennedy, Northeastern University professor, media critic, and author of the blog Media Nation. “One is real, and one is artificial.”
The real crisis, Kennedy said, is the way Facebook, Google, and other digital behemoths siphoned away advertising from local news outlets. The artificial crisis is the acquisition of papers by corporate chains and hedge funds, which “squeeze out the last drops of revenue before they turn and walk away.”
That second issue, of ownership, is one “we can do something about,” said Kennedy.
One solution is to start an independent local paper, like the New Haven Independent, founded in 2005, or Harvey County Now (formerly Newton Now), a more recent upstart in Newton, Kan. Another is to buy papers back from corporate chains and revive them. Joey Young, who publishes Harvey County Now, did that with his other three Kansas newspapers.
On Nantucket, the Inquirer and Mirror, known as the Inky and celebrating its bicentennial this year, was independently owned from its founding until 1990. It went through a series of corporate owners until 2020, when Gannett, the nation’s largest newspaper conglomerate, sold it to a group of local owners.
The problem with much of the national reporting on the news industry is that it focuses on papers run by hedge funds and private-equity firms, and only “on names that America recognizes” like the Denver Post, said Young. “The truth is that most newspapers are owned by people like me.”
Young’s papers compete with Gannett properties, but Gannett’s have far fewer resources. Add the constant turnover in Gannett-owned papers, and the resulting loss of institutional knowledge, and “it’s a lot easier for us to produce high-quality content,” said Young.
Gannett’s strategy is fairly simple, he said. The company buys papers that have strong, valued brands and are largely monopolies in their communities, and then “lives off of that reputation.”
Gannett continues to sell ads and simultaneously slashes expenses by cutting newsroom staff, thus artificially inflating profit. Then, “they take those artificial profits and they invest them in other family papers so they can do it again.”
When a paper is no longer profitable, Gannett looks to sell it. If there aren’t any interested buyers, they’ll close it, said Young.
But a fair number of local papers have remained independent. The Falmouth Enterprise is one, said editor Bill Hough, whose grandparents bought the paper in 1929. Hough’s Enterprise has expanded into four print editions covering four towns. Meanwhile, Gannett recently shut down its three Upper Cape weeklies.
Most for-profit papers rely on advertising revenue and, to a lesser extent, circulation revenue. Many also rely on revenue from other services such as digital marketing. The Inky on Nantucket relies on other publications, including a magazine and newsletter, said editor and publisher Marianne Stanton.
“It’s never been a bad time to be in print,” said Kevin Slimp, a media critic and book publisher. Anyone who says otherwise is taking that stance for their own benefit, he said.
“The reality is that a lot of newspapers are doing very well,” said Slimp, who gets frequent requests to consult on the redesign of print papers and train staff.
Slimp points to a recent study that predicted a 12- to 14-percent rise in print ad revenue over the next year, compared with a 10-percent rise in digital ad revenue. Print advertising works because it’s friendlier and less annoying than digital ads. “Smart advertisers know that,” said Slimp.
Slimp’s most recent research found that millennials don’t have much interest in getting news electronically. Are you seeing more junk mail again? Slimp asked. “That’s because print advertising isn’t dead.”
The Falmouth Enterprise gets about 70 percent of its revenue from print ads, said Hough.
Depending on a paper’s readership and community, each business will differ. For the Christian Science Monitor, for example, which publishes online daily and weekly in print, subscriptions are the focus. But that wasn’t always the case, said editor Mark Sappenfield. Eight to 10 years ago, the Monitor was getting 45 million page views a month and digital ads brought in dollars. It was among the first news platforms to make an online play in 2009, and “we really were the first to try to figure out how you get clicks,” he said.
That strategy was “a blunt instrument,” said Sappenfield: pump out more content and learn search engine optimization and the use of keywords in headlines. But as larger publications like USAToday and the Washington Post made plays online, the Monitor struggled to compete. Page views became “receding goal posts,” said Sappenfield.
So, the Monitor changed tack from rushing to publish stories online to giving each story the best attention possible. You have to ask, “Who is your audience?” said Sappenfield. “How are you serving them in a unique way?”
National coverage of the news industry often presents it as monolithic. But “there’s not just one answer,” said Paul Bass, founder and editor of the New Haven Independent. Papers around the country are finding success through different business models.
“People will support local journalism that’s high quality,” said Bass. “I think we’re seeing the beginnings of the rebirth of local journalism.”