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As the reporters, photographers, editors, and designers at the Seattle Times report on a community stricken with the coronavirus, their paper is also battling another serious threat. In just a few weeks, its local advertising business has all but disappeared.
A cruel irony of the pandemic, which in the United States has grown to more than 42,000 cases and killed 573 people, is that while journalists may be performing an essential business, the business of journalism is facing an extinction-level threat.
“Virtually all entertainment advertising is gone, restaurants gone. Automobile advertising is starting to get impacted,” Alan Fisco, the president and CFO of the paper, told BuzzFeed News.
The freefall in advertising comes amid a precipitous rise in readership. The paper's “online traffic has been at times off the charts,” according to Fisco, and subscriptions — which account for more than 60% of the company's revenue — are rising. But those revenues don’t make up for the nearly total collapse of local ads. It’s unclear if or when they will return to pre-pandemic levels.
“If you go back to events in the past where you've seen some big impacts [to ad spending], does all of it come back? It hasn't,” he said.
The toll of the coronavirus on the news media could be worse than the 2008 financial crisis, which saw newspapers experience a 19% decline in revenue, according to Ken Doctor, a news industry analyst with Newsonomics. “[Newspaper] advertising revenue is getting just wiped out," Doctor told BuzzFeed News, saying it’s already "worse than in 2008 and 2009.”
For some publications, “this seems like for them truly it is the full extinction event. I don't know how they come back,” he said.
Some outlets are better positioned to survive. Like the New York Times, the Washington Post, and the Wall Street Journal, the Seattle Times has a base of subscription revenue that can help it withstand the crisis. But other local newspapers and digital outlets in the US and Canada are unlikely to survive.
“I think there we will unfortunately see more closures of newspapers, more news deserts as a result of this,” Fisco said.
Doctor said many newspapers are already distressed businesses, and publicly traded chains like Gannett, which owns USA Today and more than 250 local papers, are saddled with debt.
“These companies, many of them were now just in survival mode” before the coronavirus hit, he said.
Alternative weeklies in the US and Canada have laid off staff and curtailed print editions. In the UK, the Time Out and Stylist magazines announced a temporary halt to print editions. So did a group of 19 local papers in Michigan, and one in Rhode Island. In New Orleans, the merged Times-Picayune and Advocate newspapers furloughed a 10th of their staff and have the rest working four day weeks. A newspaper in Vermont laid off 20 of its 42 staffers, and papers in West Virginia, California, and Florida also had layoffs. Even the New York Times warned in early March that its ad revenue would take a hit. On Monday, Digiday reported that 88% of legacy and digital publishers surveyed expect to miss their business targets this year.
Digital-only outlets are also struggling. On Saturday, Jim Spanfeller, CEO of G/O Media Group, emailed its staff to warn the company would “experience some pain,” according to the Daily Beast. “We are indeed entering a uniquely bad environment for the revenue side of our business,” Spanfeller wrote in a message with the subject line “Brace For Impact.”
A spokesperson for BuzzFeed declined to comment on revenue but said the company is working to avoid layoffs.
"BuzzFeed's leadership team is exploring a range of ways to support employees while protecting our business,” said Chief Communications Officer Carole Robinson. “Our goal is to avoid layoffs, with an alternative plan that requires some sacrifice from all of us — and especially those on the executive team — ultimately allowing us to remain a strong company over the long-term.”
While some advertisers have halted their online spending altogether, others have turned to keyword blocking to stop their ads from showing up next to articles about the coronavirus. As a consequence, publishers can’t turn the surging traffic into revenue as easily, and when they do, ad rates are lower than would be otherwise expected. Fisco said the amount the Seattle Times receives for ads placed via online exchanges is now 40% lower than normal.
For now, the signs are that the crisis will only worsen. On Monday afternoon, two local Australian papers, the Yarram Standard and the Great Southern Star, announced they would be shuttering in the face of sharp drops in ad revenue.
“Yarram Standard has been in publication for more than 120 years,” tweeted Australian journalist Kellie Lazzaro.