Over the past two weeks, an estimated 2,100 journalists and other staffers have lost their jobs across the media industry, after BuzzFeed, HuffPo, Yahoo, Gannett, AOL, Vice, and others announced lay-off. As I detailed in a long piece last week, a lot of people (ahem Dave Rubin, Donald Trump) have blamed this on “bad journalism,” but the reality is that it has less to do with the quality of the product than the model of the business: Not only do classified ads (which, pre-internet, were about 40 percent of newspaper revenue) no longer exist (thanks Craigslist), Facebook and Google have scooped up an estimated 80 percent of online advertising revenue. The impact of this on the media cannot be overstated.
Case in point: Facebook recently released the company’s fourth-quarter earnings for 2018, and the company’s annual revenue last year was a whopping $55.8 billion. That’s up from $40.6 billion the year before.
It’s not hard to see why advertisers are drawn to Facebook. The company has access to an immense amount of user data. Not only does it know demographic information and who you are friends with, we voluntarily tell the company what we like, which allows Facebook, as well as Google, to precisely target consumers in a way most media groups just can’t.
Of course, there is a cost to this, and not just because it’s creepy to get Facebook ads for shoes you just bought. There’s also a real cost to the free press, and I’m not just talking about digital outlets like BuzzFeed and HuffPo. Local newspapers all over the country have either closed down or have been scooped up by national brands like Gannett and McClatchy, companies that tend to care less about the product than returns for stakeholders, and they often make drastic cuts to local newspaper budgets and layoff staff. Thanks in part to the decline in advertising, between 2003 and 2014, circulation of local papers declined by 27 percent. At the same time, statehouse reporters were cut by 35 percent. And this has an impact on how cities and states function: A study published last year found that when local media declines, that government spending increases.
Despite some very public missteps, Facebook keeps growing, and as of this year, now has a reported 2.3 billion monthly users. And there are repercussions for this, for people working in media, for local news organizations, and for government and communities. Fifteen years after Facebook was founded, we’re still learning what the rise of this one company will do to us.
