How important is local news, and how do we save it? Well, let's talk about that.
Before we start, I just want to make something very clear. Local newspapers are exceptionally important for our society and, don't just take my word for it, it's actually something that we can measure.
For instance, back in May, we heard about a study from the University of Notre Dame and the University of Illinois at Chicago that had looked into the cost of the local municipalities in places where local newspapers had closed. What they found was that the local governments saw a rising level of cost, which hinted at a higher level of mismanaged or poorly conducted local projects.
And by comparing this to places with and without local newspapers, they noticed a statistically significant difference between them. So the conclusion was that local newspapers served a very important role in local societies.
Revenue bonds are commonly issued to finance local projects such as schools and hospitals, and are backed by the revenues generated by those projects. General obligation bonds, on the other hand, are typically used to finance public works projects such as roadways and parks, and are backed by local taxes and fees. Revenue bonds should be subject to greater scrutiny because of the free cash flows that those projects generate, and these bonds are rarely regulated by the state government. A local newspaper provides an ideal monitoring agent for these revenue-generating projects, as mismanaged projects can be exposed by investigative reporters employed by the local newspaper. When a newspaper closes, this monitoring mechanism also ceases to exist, leading to a greater risk that the cash flows generated by these projects will be mismanaged.
So, the importance of local newspapers is something we can directly measure, and because of this, we need to protect them and make sure that they continue to exist.
Right?
Well, this is where we have a problem. And in this article we will talk about why and how local newspapers need to adjust their models to a world where the newspaper no longer fits in.
So what is really happening?
Well, first of all, it's important to remember that what we call 'local newspapers' has a very wide definition. There are massive differences between countries, there are huge differences between cities. For example, a local newspaper in Boston USA has the same potential audience as the entire country of Denmark (where I live).
Defining a local newspaper for a city with millions of people is very different to a local newspaper in a small town with only a few thousand people.