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Local news has been in decline since the start of the digital boom. Its traditional economic model, heavily reliant on advertising for revenue, has been disrupted by tectonic shifts in the media and technology landscape as streaming proliferates. Social media, big tech, and digital video platforms began capturing the lion’s share of media consumption and advertisers followed—leaving little market share for traditional local news. E.W. Scripps (“Scripps”) COO Lisa Knutson recently discussed the streaming phenomenon and influx of consumer choices with our U.S. Co-Head of Media Jeff Goldstein.
The growing pressure on the industry has triggered consolidation, leading to less diversity, variety, robustness, and community-centric news. As local news fades in pockets across the U.S., entire communities are left without essential coverage. These headwinds have also triggered a nascent period of reinvention in local news, in which the traditional business model can evolve with new ideas and approaches.
This year will be a period of transformation and renewal for local broadcast news, as networks focus on high-quality, relevant, and engaging programming.
A market correction for peak TV content will extend to local TV broadcasting, and network affiliates will look to streamline operations and balance content volume with quality and relevance. A greater focus on hyperlocal and personalized content will be a differentiator that fosters a strong connection with local communities. Cox has introduced "Neighborhood TV," an innovative streaming news service that delivers hyperlocal, niche content to small zones around a six-to-eight-mile radius in Georgia and North Carolina. Scripps has also invested significant resources into improving its local news initiatives, as the company’s SVP of Local News Sean McLaughlin told our Director of Technology, Media, and Telecom Ade Obatoyinbo.
Expanding reach through digital channels will accelerate as more linear TV channels become available on free, ad-supported TV (FAST) and live-streaming models. Embracing a multiplatform distribution model is table stakes for retaining traditional broadcast audiences and reaching fragmented audiences. For example, local broadcasters tapping into traditional over-the-air, as well as CTV, mobile, and internet platforms, can claim a larger share of political ad spend during the 2024 elections.
However, a commitment to multiple platforms can dilute local news products and contribute to journalist burnout. According to Scripps CEO Adam Symson, supporting a multiplatform approach requires a shift from traditional operations and processes and a renewed commitment to quality journalism. During the first half of 2023, Scripps leadership aligned on an ambitious four-point plan to reinvent and reinvest in local news:
- Emphasize beat reporting and community-relevant issues.
- Leverage technology to reallocate resources to journalism.
- Invest in the future of journalism by investing in its people.
- Integrate Scripps News coverage more deeply into its local news products.
As a core part of its objective to provide fact-based news coverage with deeper context, Scripps will add 250 resources to local reporting teams and invest $10 million to increase journalist compensation. The fuel to reinvest in these areas was largely funded through tech modernization, allowing Scripps to shift production resources towards more reporters and news-gathering staff.
Local newspapers and publishers face a gloomier outlook. However, business model innovation and a push to revitalize local journalism will help offset declines.
The problem could get worse before it gets better as large owners of local newspaper subsidiaries warn about a further reduction to the number of outlets aimed at serving local communities. While shared resources and economies of scale result in cost savings, local news outlets struggle with significantly lower digital subscription revenues vs. print. Intense competition from various free alternatives and social media further erodes revenue, forcing for-profit news organizations to pivot to survive.
Although the future of local journalism may appear bleak, there is room for optimism, especially with the emergence of new philanthropic models. We anticipate more news organizations will transition from private businesses to nonprofit models such as cooperatives or community-based organizations.
In some cases, new outlets are emerging to replace local papers that have shut down. In Marblehead, MA, the legacy local paper dropped local coverage in favor of wire service content, but three new outlets emerged with varying go-to-market approaches. One of the two print-and-digital news sources is a non-profit collective. A third is a digital-only volunteer-run organization. This diversity in approach indicates an environment rich with experimentation to find sustainable solutions.
This article is an excerpt from our 2024 Media and Entertainment Predictions Report. You can view the full report here.
