🗞️Context Collapse: Journalism Is A Flaming Money Pit. WTF Now? Part 1

Don't mourn, don't get self-righteous. Look forward to what's next instead. CC #276

In this issue: We rant about stupid business decisions by media companies because there have been so many and we try really hard to figure out what the hell journalism is.

Photo by jamie muller on Unsplash

Welcome to Context Collapse, the world’s best comms newsletter. I’m Neal Ungerleider. I run Ungerleider Works and used to work as a reporter for Fast Company, write op-eds for the LA Times, and work as a senior copywriter for R/GA. This newsletter helps readers navigate the weird new world of media and gleefully ignores all the conventional wisdom about journalism, public relations, marketing, and advertising.

In case you haven’t heard, journalism is having a rough time right now. On January 23, 2024, the Los Angeles Times announced plans to lay off a third of their newsroom—their biggest job cuts in history (Obligatory disclosure: I am a former op-ed writer for the Los Angeles Times¹). Sports Illustrated just lay off most of their staff after being sold to a company who mostly wanted their brand for licensing opportunities and music snob site Pitchfork, which has always punched above its weight among people who mostly never would have been caught dead reading the old Sports Illustrated, has been more-or-less sunsetted by Conde Nast. There have been a ton of other media layoffs in late 2023 and early 2024.

It’s a grim situation.

According to Derek Thompson and Bryan Curtis over at The Ringer, the internet basically destroyed the old media monetization system:

I grew up in Washington, D.C. The Washington Post had a local advertising monopoly for car ads, for apartment listings. Those monopolies are absolutely destroyed when the internet comes along and you can just go to Edmunds or cars.com to figure out what car to buy. You don’t have to buy a bundle that has news about Fallujah and also car advertisements in the back.

And, speaking of the Washington Post, all-things-internet-culture Post reporter Taylor Lorenz has a video on TikTok about the “potential collapse of journalism” (hyperbole, but again—important!) that you should really watch.

Note that she posted it in video, on TikTok, and did not write about it for the Washington Post, the newspaper where she works. This is important.

@taylorlorenzIs journalism collapsing?! Major layoffs across the industry are happening and national news brands are shuttering. Just today, the Los Angeles Times laid off 115 people. This follows layoffs at myriad other outlets. The rise of independent journalism on social media has been great, but it’s increasingly hard for independent journalists to sustain a business online, and their work is often shadow-banned and demoted within tech company algorithms. Anyone hoping billionaires might save the media will be disappointed. As the New York Times recently reported: Jeff Bezos, the founder of Amazon, bought The Washington Post in 2013 for about $250 million. Dr. Patrick Soon-Shiong purchased The Los Angeles Times in 2018 for $500 million. Marc Benioff purchased Time magazine for $190 million in 2018. But it increasingly appears that the billionaires are struggling just like nearly everyone else. Time, WaPo and The LA Times all lost millions of dollars last year and the difficulties facing the companies are getting only more severe. Web traffic has waned for many publishers as referrals from search engines like Google ebb, and the rise of new applications powered by artificial intelligence has the potential to erode readership further. “These vitally important news publications still find themselves ‘transitioning’ from print to digital — with major ongoing legacy business costs — as they build brick by brick a mainly digital future,” said Ken Doctor, an analyst and media entrepreneur. Mr. Doctor said the billionaires in the news industry were showing “greater signs of fatigue,” stemming from challenges including “news anxiety and avoidance and fierce advertising competition.” “The very rich find it very difficult to lose money year over year,” Mr. Doctor said, “even if they can afford it.” 👉🏻 Follow me @taylorlorenz for more tech and online culture breakdowns 👈🏻 #news #journalism #media #latimes #nyt #washingtonpost #jobs #journojobs #gaming #popculture #music #sports #contentcreator #creator #influencer #journalist #apps #internet #onlineculture #internetculture #socialmedia #technology #elonmusk #commentary #justchatting

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So, yeah. Shitty time for journalism. Let’s talk about it.

I. Let’s Define Journalism!

When we talk about “journalism” we talk about a lot of different things. Your definition of journalism will be a tell about your socio-economic status, education level, political affiliation, geographic location and a whole bunch of other things. You may have strong feelings about what you consider journalism to be.

But let’s zoom out.

Journalism encompasses a whole bunch of things. The local daily newspaper reporting on zoning board meetings and high school sports teams. Huge media empires like the New York Times or CNN which generate revenue from things besides news coverage (CNN’s money-maker is opinion and it’s part of a much larger corporate entity. The New York Times makes money from casual gaming and cooking sites. This is the 2020s, roll with it).

Journalism is hard news, political coverage, features, sports, pop culture, and a million things in-between. It can be consumed as text, video, or audio on a million different platforms. Journalism means coverage of things you care deeply about and things you don’t give a shit about. Media outlets can strive to be neutral, can have open biases, can have hidden biases or anything in-between.

Media outlets—who publish and bundle the journalism we consume and give helpful services like editors (who help make a finished product that’s polished and which won’t repel audiences), distribution (getting content in front of audiences), legal assistance (to help make sure that reporters can cover corruption, crime and sensitive topics), and salaries and compensation (making sure that the people covering the news are able to make a living from their work as opposed to a hobbyist/trust funder passion project). These are all things that have to be done at scale and can’t be done by Joe and Jane Content Creator.

Except it turns out that media outlets are extremely shitty at making money. I’ll write more about this later, but bad business ideas and inefficiencies are everywhere in the smaller journalism and larger media worlds. This is the reason why hedge funds like Alden Global Capital have been so attracted to print newspapers—the waste and missed moneymaking opportunities at many media outlets is staggering on the business side even as many reporters struggle for the resources they need to cover stories.

That’s the end of Part 1. Stay tuned for Part 2: What creators can (and can’t) do, and the 3 magic keys for unfucking shitty journalism economics.

1. I wrote op-eds for the Los Angeles Times in the 2010s as a freelancer whose columns appeared in the newspaper repeatedly. Pretty nifty for a high school dropout from a crummy corner of bridge-and-tunnel NYC like me.