Credit: AP Photo/Steven Senne, File
Gannett reports dismal second quarter earnings. What does this mean for the newspaper industry?
LISTEN: Keith Herndon, a journalism professor at the University of Georgia, discusses the economic challenges newspapers face.
The media company Gannett, which operates newspapers in Augusta, Athens, and Savannah, reported dismal second quarter financial results earlier this month.
Gannet said revenue from digital subscriptions grew, but other important revenue sources were down, leading to a net loss of $54 million.
Gannett confirmed with GPB in an email Friday that the company is laying off staff.
"We've been transparent about the need to evolve our operations and cost structure in line with our growth strategy while also needing to take swift action given the challenging economic environment," Gannett Chief Communications Officer Lark-Marie Antón said in an email. "These staffing reductions are incredibly difficult, and we are grateful for the contributions of our departing colleagues."
From an analog to a digital economy
The financial report from Gannett did not surprise Keith Herndon, a journalism professor at the University of Georgia. He said it’s part of a decades-long decline in the newspaper industry, as newspapers, like many parts of society, transition from an analog economy to a digital economy.
"Advertising, particularly on the digital side, is just not enough dollars to make up the loss of the huge amount of print advertising that was there,” Herndon said. “So newspapers have tried to change their economic mix so that they can get at least half of their revenue from digital subscriptions, or from subscriptions. And that's a really tough sell.”
It’s tough, he said, because so much news and information is considered to be free.
Newspapers, like many parts of society are in a transition phase from an analog economy to a digital economy. "And that digital economy has casualties," Herndon said.
Some news companies are doing better at transitioning than others. Newspapers with national brands, like The New York Times and The Washington Post, have been successful at selling the value of a digital subscription. Regional newspapers with smaller audiences have a harder time, Herndon said.
A bigger challenge
The challenge that Herndon said concerns him more, in terms of digital media, is its ability to amplify and spread disinformation and misinformation.
“If we’re going to be on these digital platforms, how do we educate our citizenry to understand the difference between fact and fiction?” Herndon said.
News literacy courses is one path to a solution. He also said he thinks the traditional news industry has an obligation to help curb the spread of misinformation and disinformation.
“But when you’re fighting for your own economic survival and you’re in the midst of this transition,” Herndon said, “it’s really hard to prioritize the larger societal good, sometimes.”