At the height of the COVID-19 pandemic in America, daily newspapers enjoy their largest readership in years, but an eroding ad-based business model seems to be washing away altogether.
To fathom the depth of the collapse, ponder this: Gannett, the nation’s largest news chain after merging with GateHouse Media, has lost more than 90% of its market value in less than three months.
The publicly traded chain, whose Arkansas dailies are the Southwest Times Record in Fort Smith, the Pine Bluff Commercial and the Baxter Bulletin in Mountain Home, had a market capitalization of $897.8 million on Jan. 17, based on a share price of almost $7 a share. (And that was after GateHouse paid more than $1 billion for Gannett in November.)
At market close last Tuesday, capitalization was $86.46 million, with stock at 64 cents a share. The company announced unpaid furloughs or salary cuts of 25% or more last week.
The main news sections of several random regional papers also registered pain on Sunday, April 5: The Philadelphia Inquirer’s news section had eight pages, zero ads; the Chicago Tribune, 14 pages, two ads; the Baltimore Sun, 10 pages, one ad. The Arkansas Democrat-Gazette that day had 16 pages in its first two sections and just one paid ad.
The Los Angeles Times, announcing cutbacks on daily sections, said that “most advertising” has halted for now.
Other papers have cut days of publication, taking a cue from the Democrat-Gazette, which went all-in on a digital replica of the paper on weekdays and cut home delivery of actual printed copies to just Sundays.
“We’ve been hit with quite a few advertising cancellations, but circulation revenue is holding steady for now,” Democrat-Gazette President Lynn Hamilton told Arkansas Business last week. The paper has not altered operations, other than allowing office employees to work from home. But Hamilton noted “there are fewer pages in some parts of the paper,” including smaller sports sections reflecting a lack of games to cover and “a lack of events to cover in High Profile, and a decrease in preprinted sections, etc.”
Website traffic has shot up, he said, with 35% more unique visitors and 25% more page views, “in part due to people at home with time to read and high interest in our free COVID-19 coverage.”
Like many news organizations, the paper has exempted its coronavirus coverage from its paywall, which usually restricts access by nonsubscribers. While the gesture is noble, former newspaper editor Howard Saltz wrote in a Poynter.com commentary last week that it also “makes no sense.”
The news is more essential than ever, but so are groceries, and supermarkets aren’t giving those away, he wrote. “The newspaper industry seems to think that public service can’t coexist with revenue. That’s a mistake — at a time when the beleaguered industry can’t afford to make one.”
The Associated Press reports that 2,100 American towns and cities have lost a paper in the past 15 years, a consequence of mass defections of advertisers to modern digital titans like Google, Facebook and YouTube. And while global brands like The New York Times have shifted their models to rely on revenue from millions of far-flung online subscribers who don’t expect coverage of their local communities, most papers have no such option and still rely on ads.
The Tampa Bay Times, owned by the nonprofit Poynter Institute for Media Studies, cut five days of its print edition and announced furloughs for nonjournalists.
Closer to home, the Log Cabin Democrat in Conway is cutting out its Sunday print newspaper and turning from vendors to mail delivery for its papers Tuesday through Saturday, according to Publisher Frank Leto, who took command of the paper in late January after it was purchased from GateHouse by Paxton Media Group of Paducah, Kentucky. The paper will also cease print publication on all Postal Service holidays.
Garrick Feldman, publisher of The Leader, which now covers North Little Rock, Jacksonville and beyond, reports that his team is “still gathering the news and taking care of print customers,” though he didn’t get into details of lost advertising. “We’re just hoping everyone stays healthy,” he said in an email.
Hamilton said the Democrat-Gazette newsroom suggested making COVID-19 coverage free to nonsubscribers and that management agreed, determining that the coverage was just too vital to withhold from all.
He offered “no predictions on how this will play out,” saying that like everyone else he’s hoping for a quick economic recovery. “Maybe we’ll all have a better feel for this by early May.”