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Local Journalism Faces Crisis as Layoffs Continue, but Innovative Solutions Emerge

-Editorial

Devastating layoffs at the LA Times and many other news outlets, along with growing news deserts, are fueling growing uncertainty about the future of local journalism — even about the future of news itself. The amount of advertising to local newspapers declined 82% – a $40 billion drop – since 2000, according to the Pew Research Center. An Ethnic Media Services briefing will explore current initiatives to rescue local journalism through various forms of taxpayer support and other public policies.

The landscape of local news is undergoing significant changes, marked by closures and reduced coverage in various regions. Despite the surge in new developments, they often occur in different areas than the closures, leaving communities with a notable information gap.

Steven Waldman, Founder and President of Rebuild Local News and Co-Founder and former President of Report for America, a national service program that places journalists into local newsrooms across the U.S. said that despite these challenges, ethnic media emerges as a potential game-changer in shaping public policy discussions. Recognizing the limitations of government support as the primary pillar for news sustenance, there’s a growing consensus on the need for alternative strategies.

He said that one approach gaining traction is the redirection of government advertising funds towards community journalism. California’s ethnic media services have spearheaded this effort, mirroring a successful model in New York City where the City University of New York secured a significant shift in advertising funds towards community news organizations.

Another avenue being explored is a series of tax credit proposals at both federal and state levels. The “Community News and Small Business Support Act” proposes an employment tax credit for local reporters and editorial staff, providing substantial subsidies to news organizations. This bill, having passed the US House of Representatives, holds promise for potential legislation.

Furthermore, the act proposes a tax credit for small businesses advertising in local news, fostering a symbiotic relationship between Main Street businesses and local media. This innovative approach relies on advertisers determining the worthiness of news organizations, thus avoiding direct government influence.

Additionally, the “886” bill, known as the Journalism Protection and Conservation Act, draws inspiration from the Australian model. This legislation aims to compel tech giants like Facebook and Google to compensate news organizations, a concept gaining traction in California and other regions.

California’s fellowship program, modeled after Berkeley’s initiative, is also garnering attention. States like Washington and New Mexico are exploring similar programs, showcasing a multifaceted approach to address the challenges faced by local news outlets.

A unique proposal from the District of Columbia introduces a “media coupon” that residents could spend on local media. While still in the experimental phase, this innovative idea aims to empower residents by enhancing their purchasing power for local news.

Lastly, the intersection of broadband and news sustainability is considered. Advocates argue that a portion of the existing broadband funding, allocated for digital equity, should support community and ethnic media. This includes initiatives for digital literacy and, more radically, the provision of local journalism in underserved communities.

As the media landscape evolves, these diverse proposals underscore the urgent need for creative solutions to preserve and strengthen local news, ensuring its vital role in serving communities.

Ryan Adam, Vice President of Government and Public Relations for the Toronto Star who was actively involved in gaining enactment of Canada’s Online News Act (Bill C-18), a bargaining code that helps secure tech company compensation to publishers for their content said that in the ever-evolving landscape of media, The Toronto Star reveals its transformation in response to challenges posed by tech giants like Google and Meta. Traditionally, the Toronto Star’s business model relied on an 80% revenue stream from advertising and 20% from subscriptions, proving successful over the past 15 years.

The influx of Google and Meta, utilizing content to drive advertising, has significantly impacted the 80% advertising revenue stream. To address this, the Toronto Star explores solutions, acknowledging a European model marked by substantial government involvement and subsidy.

In a recent discussion, the Toronto Star highlights Australia’s approach, implementing a bargaining code that compelled tech platforms to sign lucrative content deals with media organizations. This not only saved but propelled the Australian media industry, setting a precedent for other nations.

In response, Canada pursued its solution with the Online News Act (Bill C-18), compelling Google and Meta to compensate content creators and news media organizations for the use of their content. Although the Toronto Star already had deals with tech platforms, the act ensures consistency and supports its business model.

The Toronto Star emphasizes the success of Australia’s bargaining code, urging the Canadian government to minimize interference in revenue streams. They highlight existing government supports, including a digital subscription tax credit and a journalism labor tax credit, which, despite their presence, have not shielded the industry from financial instability.

The digital subscription tax credit, allowing 15% of subscription costs to be tax-deductible, incentivizes Canadians to invest in local news. Additionally, the journalism labor tax credit, recently increased to 35%, provides relief for corporations employing journalists.

While acknowledging the necessity of government intervention to pass laws like the Online News Act, the Toronto Star emphasizes a preference for a free-market deal. They argue that compelling tech platforms to compensate content creators without extensive government involvement ensures a more stable and lasting business model.

The Toronto Star urges the government to exercise caution in meddling with journalists’ revenue streams, emphasizing the risk of changing political landscapes. Instead, they advocate for a solution where tech leaders recognize and compensate for the value of real, fact-based journalism, essential for democracy and societal cohesion.

 

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