This industry never recovered from the last recession.
The reckoning that’s taken place over the last decade was bound to happen sooner or later. Even before the Great Recession, newspapers were clinging to an outdated model, and many conglomerates were weighed down by enormous debt and mounting pension obligations.
Then the bottom fell out.
When the economy collapses, businesses cut costs, and the first place they look is advertising. (Some other time, I’ll show you my PowerPoint on why this is a bad idea.) Revenue cratered. Newsrooms were cut in half, then in half again. As dailies became shells of their former selves, readers canceled subscriptions; they could read what they wanted for free online, anyway. Papers tried to replace lost print revenue with digital revenue, but it never quite worked. They erected paywalls, which helped, but then they lost digital advertising to behemoths like Facebook and Google. (Many alt-weeklies have faced the same advertising issues but without the option of a paywall.)
If there’s one good thing about the Trump presidency, it’s that his constant gaslighting and authoritarian tendencies have made clear the necessity of a free press to a threatened democracy. This urgency, however, has generally worked out better for national outlets—The Washington Post and The New York Times—that have racked up millions of digital subscribers by competing for Hot Trump Scoops than for local ones digging into zoning issues at City Hall.
And now, after an 11-year expansion, with local journalism still precarious, we find ourselves on the precipice of another recession, with the coronavirus poised to lay bare the underlying fragility of an economy propped up by consumer spending: declining growth, overleveraged corporations, low-wage hospitality jobs, a trade war that crushed manufacturing and led corporations to slash investment.
Compounding matters, there’s little room for the government to act: Thanks to Trump’s tax cuts, the deficit already exceeds a trillion bucks a year, and the Fed can’t cut rates much lower than it already has. The White House is considering a payroll tax cut and bailouts for airlines and hotels. Who knows if that will be enough to stave off what’s coming when consumers stop spending.
This industry never recovered from the last recession. I fear what will happen to it after the next one.
Contact editor in chief Jeffrey C. Billman at jbillman@indyweek.com.
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