Hammered by coronavirus, local media outlets look to find new revenue sources

Hammered by coronavirus, local media outlets look to find new revenue sources
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Readers are devouring news in record numbers. Journalists are putting in long hours to cover stories about coronavirus testing, layoffs in their city, business losses, and health risks. But the virus is also clobbering advertising revenue that sustains local media, from local newspapers to popular radio and TV stations.

Interest in local news, it seems, has never been higher. So outlets are looking to new revenue streams to support themselves.

A few days after the U.S. elected its first black president in 2008, Glenn Burkins left his job as deputy managing editor at the Charlotte Observer to launch QCity Metro, an outlet focused on issues in Charlotte’s African-American community. Weeks later, Burkins sent a few of his first employees up to Washington to cover the inauguration of Barack Obama. “It was kind of a heady time to launch a black website,” Burkins says.

At the time, the country was in the midst of a recession that resulted in millions of jobs lost. Like other papers, the Observer saw its revenues plummet. The paper slashed jobs and its parent company, McClatchy, implemented a year-long salary freeze.

It was a precarious but critical time for local journalism. It is now, too.

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We’re months away from a presidential election, and we’re in the throes of a global pandemic that has killed 80,000 Americans and cost more than 20 million their jobs.

Back in March, though, Burkins was the first Charlotte journalist to start pushing county officials for answers on why the coronavirus is disproportionately harming black residents. Since the story ran, the county has increased testing in and communication with black communities in Charlotte. QCity Metro has more than doubled its online readership, Burkins says. But revenue — real dollars coming in — has plummeted as advertisers pull back.

“Like everyone, it’s in the tank,” Burkins says of advertising revenue. “A large percentage of revenue came from helping other organizations promote events. For the most part, that has dried up. We have gotten some health care advertising.”

Burkins, who’s been proactive about receiving grants and other sources of revenue, hasn’t cut any staffers or salaries. But other outlets have.

According to a New York Times analysis, at least 36,000 people who work in news media have been laid off, furloughed, or had their pay reduced because of the coronavirus. In Charlotte, the damage stretches across a range of outlets.

One of the city’s most popular personalities, WCNC meteorologist Brad Panovich, was furloughed. He still provided updates on severe storms for his large social media audience — nearly 90,000 twitter followers — but he made clear he wasn’t doing it as part of his job.

“I’m just saying just like many people, some people are being forced to take a week off with no pay,” Panovich said during a Facebook live broadcast. Panovich tells the Agenda he’s not supposed to discuss the furlough. Instead, he was instructed to direct questions to the stations’ public relations department.

Charlotte radio station WFNZ laid off a handful of employees last month. Its parent company, Entercom, saw steep revenue declines as a result of the coronavirus shutdown. “We are doing everything in our power to minimize the number of layoffs through shared sacrifice across the organization,” Entercom CEO David Field said in an email to staffers, according to the Radio and Television Business Report.

An Entercom spokeswoman declined to provide specifics about the local layoffs. On Twitter, producers Ryan Chell and Julian Council confirmed they were among those who lost their jobs.

Also in radio, Beasley Media group cut 38 jobs in Charlotte because of COVID-19. Beasley operates a number of well-known stations in Charlotte, including Kiss 95.1, Power 98, and Country 103.7.

The notice Beasley filed with the state’s Commerce Department indicates these are “permanent layoffs and furloughs.” It’s unclear whether Beasley will bring any jobs back after the outbreak. Beasley human resources director Gloria Wrenn declined to comment.

WFAE, the local NPR affiliate, has lost about $500,000 in revenue because of the outbreak, says the organization’s chief financial officer, Jean Zoutewelle. The lost revenue includes corporate sponsorships, a suspension of the March fund drive, and the postponement of a May 12 annual dinner with NPR host Kai Ryssdal.

At the Agenda, we’re not immune to the financial challenges the outbreak presents, either. Audience is high (we now reach more than 1 million people each month), but our revenue has declined. We will not have layoffs, though.

For newspapers, coronavirus has accelerated revenue declines that were already straining chains such as McClatchy.

Over the last several weeks during the pandemic, digital readership numbers of the Charlotte Observer soared. The Observer took down its paywall, and still saw digital subscriptions increase, Observer executive editor Sherry Chisenhall tells the Agenda. It’s heartening, Chisenhall says, to see the community stepping up to support local journalism.

A few weeks ago, the Observer and other McClatchy-owned newspapers put paywalls back up on their coronavirus-related news stories in an effort to grow digital subscriptions. In a recent column headlined “Dear readers: The Observer needs your help,” Chisenhall asked readers to subscribe to the paper. She wrote that advertising revenue for local papers nationwide has fallen amid the pandemic.

“It’s really painful for us. It’s painful for a lot of media across the city,” Chisenhall says.

McClatchy spokeswoman Jeanne Segal declined to provide Charlotte-specific metrics affected by the coronavirus. She said local trends track with the company’s overall subscription growth. Also, she added, traffic “has surged” as a result of the outbreak.

“We have not disclosed the impact of COVID-19 on ad revenue other than to say that we are seeing lower volumes like everyone else in the news industry,” Segal said in an email.

Like other newsrooms, the Observer is looking to supplement its revenue with outside grant money. This year, the paper will have two reporters in the newsroom through the Report for America project. The Observer is asking readers to help with matching funds for the positions. Launching public campaigns for reader support, long a strategy exclusive to NPR stations, is no longer taboo for any local outlet. (Through partnerships with other nonprofits and local news organizations, WFAE also got three positions through the RFA project.)

Last month, McClatchy, which filed for bankruptcy in February, furloughed about 115 employees, mostly in advertising, and laid off four executives. But despite the financial challenges the coronavirus has presented to the Observer, the local paper has not had to implement pay cuts, layoffs, or furloughs in its newsroom.

“We’re very fortunate to be in that place right now. There are folks who have worked really hard to make that happen,” Chisenhall says.

Queen City Nerve, an alt-weekly paper, saw its revenues nosedive as the outbreak began. That first week, revenue plummeted 90 percent, publisher Justin LaFrancois says.

Advertisers pulled out and events, which make up 30 percent of annual revenue, canceled, LaFrancois says.

Queen City Nerve usually distributes at cafes and delis and other retailers, all places that shut down in March. LaFrancois says when he realized the paper would cut distribution by nearly two-thirds, he quickly decided to put into action a plan he’d been considering for a while: Subscriptions and home delivery.

The paper has always been and will continue to be free. But the response to the delivery so far has been strong, with a few hundred people signing up early on. Queen City Nerve recently partnered with several area artists to kick off a coloring book project. Half of the sales will go to artists; half will go to the paper. So far, sales have reached about $5,000.

On top of those initiatives, the Nerve recently won a $5,000 Facebook Local Journalism Grant, which it’ll use to bolster its freelance budget.

The paper is getting creative with how it’s making money, so it has avoided layoffs and furloughs. 

“We’re definitely a DIY and fly-by-the-seat-of-our-pants at all times kind of organization,” editor Ryan Pitkin says.

At QCity Metro, Burkins says it’s been encouraging to have readers contribute financially during the pandemic. The outlet also recently received a Facebook grant of $100,000. (La Noticia, qnotes, and the Charlotte Ledger all also received Facebook grants.)

Burkins says he’s still deciding how the company will use the funds. He’s considering bringing on a full-time staffer.

Smaller news companies might not have the financial heft of major news corporations. But being smaller has its advantages, too. A dip in revenue won’t set off a chain-wide panic at QCity Metro like it would at a newspaper chain, for instance.

“There’s not the pressure of having outside investors demanding huge returns,” Burkins says. “We can look for ways to tighten without overreacting.”


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