Amid downturn from COVID-19, Alabama Media Group tries a new tactic
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First came one wave of devastation. Then swiftly came another.
That’s not the precise story of the coronavirus, though in the end it may turn out to be. But it is the story of newsrooms getting piled on by adverse conditions.
Lost advertising put the journalism industry into a decade-long spiral of closures, layoffs and diminished products that was still happening at the time of the virus outbreak. COVID-19 halted events, shut down businesses, and savaged advertising even further. News companies around the nation responded as they always had, with yet more slashing of expenses in the forms of permanent layoffs, temporary furloughs, and pay cuts that they present as temporary but which are likely to become permanent.
Some sad examples from around Alabama, all within the past few weeks:
The Tuscaloosa News (owned by Gannett) laid off its executive editor and sports editor.
The Gadsden Times (also Gannett) laid off three people, according to poynter.org.
The Anniston Star lost three journalists, including its immensely respected executive editor (and a former colleague of mine) Anthony Cook, who volunteered to leave because he said the community needed reporters on the street more than it did managers in an office.
The North Jefferson News (owned by CNHI) essentially folded by merging with the Cullman Times.
Alabama Media Group (owned by Advance Local) implemented one-week furloughs and temporary pay cuts from 2% to 20%, with higher salaried personnel taking the higher percentage reductions. Other Advance Local properties took similar steps.
In mid-April Advance Local took another step that I found remarkable. The company that has resisted the industry trend of requiring a paid subscription to access online content launched a campaign asking readers to voluntarily buy a digital subscription for $10 per month. No extra content comes with that. In Alabama, all the content on AL.com remains free to everyone. The company is in essence asking willing individuals to help sponsor the cost of its journalism. It’s a wise time to ask, as the need for pandemic news has spiked online readership around the country.
Alabama Media Group (full disclosure: I used to work there) believes its content, especially during the pandemic, offers value that’s worth paying for. That’s a reader by reader judgment, of course. I bought a voluntary subscription for multiple reasons, only one of which is that they do some good work. I’m also highly empathetic to the idea of, in essence, donating money to sustain a vital civic purpose, especially knowing that some people who need news would never be able to afford it if it became for paying subscribers only.
On the other hand, there’s a legitimate, more hard-ass view that any seller of anything just needs to make its product so indispensable that people will pay without any element of civic charity thrown in. AMG’s ask of its audience, I think, is a tough one, partly because money is tight for some people right now. It also still matters that corporate HQ did a disservice to its local communities (Birmingham, Mobile and Huntsville) in 2012 by changing daily newspaper publication to three days a week. Further, at least in Birmingham, a substantial decline in neighborhood coverage and some other kinds of grassroots coverage sacrificed a measure of community good will that might have translated into voluntary subscriptions today. Social media reaction following AMG’s subscription launch in mid-April was generally unkind, for reasons both fair and unfair.
Kelly Scott, Vice President of content, alabama media group
Kelly Scott, AMG vice president of content, told me in an email that she couldn’t discuss the number of subscriptions purchased so far (Advance Local is a private company) but “we are grateful for the response.”
I don’t know for sure, but my inclination is that Advance Local’s push for voluntary digital subscriptions is a precursor to mandatory subscriptions that will put most content behind a soft paywall. A “soft” paywall means readers get a certain number of free articles but must buy a subscription to get more than that. Advance Local began doing this in one market, Syracuse, New York, in late 2018. The company often tests ideas in one market before deciding whether to expand them elsewhere. In the rollout of its subscription campaign, two words stood out in a Frequently Asked Questions post: “For now, your support of AL.com is voluntary” (italics are mine).
Scott cautioned, however, that Advance Local’s voluntary subscription effort “was a different decision than one day moving to a paywall business model.”
Subscriptions mean more money but they run the danger that a chunk of audience will refuse to pay and instead seek their information from other, free online news sources. Reducing “traffic” to websites and social media channels cuts at the heart of any revenue strategy that relies on advertising. Advertisers insist on eyeballs and they pay according to the numbers.
AMG has done remarkably well with this kind of strategy. Not well enough to avoid sending more than half a newsroom of talent out the door in recent years, but still relatively successful. An investment in video – and not just news video – has helped, as have other revenue sources such as books, events and marketing consultation. And crucially for advertisers, AL.com is “one of the largest local websites in the country,” Scott pointed out, referring to traffic metrics.
But the bulk of the evidence nationwide has been and will continue to be that any news company leaning too much on advertising is going to topple over. Google and Facebook pose too much competition. Ad rates are too low. Website visitors hate ads (unsurprisingly, AL.com denies access to content if you have an ad blocker). And advertising is too subject to the whims of economic downturns and viruses.
Advance Local may be figuring out that it’s going to need another revenue source in its collection. Then we will see who among us thinks AL.com is worth paying for.