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Local news is suffering. So are underserved communities

March 2, 2021 | By Rande Price, Research Director – DCN @Randeloo

Local news outlets have been on the ropes for a while, and this year is no different. Competition for digital advertising has been fierce, and it is well documented that two technology companies eat the lion’s share of the revenue.

In fact, just this month, HD Media LLC, a news publisher, filed a federal antitrust lawsuit against the duopoly, Alphabet Inc.’s Google and Facebook Inc. The lawsuit asserts that the two companies are manipulating the digital-advertising market, making it difficult for the Charleston Gazette-Mail and others to survive.

Exacerbating the financial implications is the way in which these two tech companies disintermediate news distribution and consumption. Given this reality, how can local news organizations successfully compete and manage a successful audience relationship?

Local news study

Sarah Stonbely’s research, from the Center of Cooperative Media, identifies news ways to answer this question. Stonbely maps local news organizations (LNO) to their coverage area, using New Jersey as a proxy for other local news markets.  She then applies demographics characteristics to these maps in a first step to understand which communities are served and to what degree. Importantly, studying the local news ecosystem offers insight into the needs and interaction of information producers, content, and their audiences.

This study includes local news outlets such as newspapers, local television, and radio stations and digital native news outlets in New Jersey. In total, 779 local news providers are part of the analysis.

Overview

Stonbely’s mapping of local news outlets shows that communities characterized by less education and located in rural areas are less served. Further, the research also shows that Hispanic communities are particularly underserved by local news.

In contrast, communities with higher income and located in the suburbs are served by more local news organizations. Interestingly, education is not a significant variable. The level of education does not necessarily correlate to whether a community is more or less likely to have a greater number of local news originators.

Economic divide

More affluent municipalities are more likely to have a greater number of local news providers serving them. And, in turn, a community in the lowest income bracket (median household income of $25,000 to $50,000) is more than twice as likely to be a news desert as a news oasis.

It is not surprising that local news organization coverage correlates to a higher median household income. Increasingly, local news outlets are supported by those able to pay for their content. While, the audience-revenue model is key to sustainability, the author’s findings suggests that this model does not serve lower income communities because they may lack the ability to pay for news access.

And even for those supported by advertising, more affluent communities are likely to boast more potential advertisers as well as present appealing demographics to those advertisers. In either case, less affluent communities are not able to sustain local journalism, which in turn can expand the economic divide.

Ethnic outlets

Municipalities with the greatest percentage of Hispanic residents are most likely to be news deserts. In fact, the likelihood of having a higher number of local news outlets increases as the percentage of the population that is Hispanic decreases.

As such, the research reveals that New Jersey’s largest minority is underserved (ethnic outlets were not available to map). While there are certainly some Hispanic news organizations, additional investment in local news would better support local markets.

Municipal spending

Local news also helps keeps a watch on municipal spending. Stonbely reports that New Jersey municipalities spent $15,1 billion the year this research conducted. Almost half, $7.4 billion, was spent in municipalities with zero to two local news originators. Community journalism’s coverage of municipal spending is important in maintaining a transparent and honest local governance.

Road to sustainability

The findings here align well with the Local Journalism Sustainability Act introduced in July 2020 by Representative Ann Kirkpatrick (D-AZ), which offers an alternate revenue model to fund local news. The bill allows individual and business taxpayers tax credits in support of local newspapers and media. In addition, the bill allows for philanthropic funding to be put toward local news operational costs.

Stonbely’s work offers a granular and comparative view of New Jersey communities served by local news coverage. The work provides insights into how mapping local news organizations to communities can highlight opportunities for improvement and growth. This study reveals gaps that news outlets can fill to fuel new audience relationships. It also provides a stark look at the realities of finding a model that both sustains local journalism and the interests of the communities these outlets serve.

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