Coronavirus: How the media is suffering through the crisis

On the face of it, newspapers should be far from hardest hit by the lockdown measures required to contain and beat the coronavirus. They aren’t empty restaurants, deserted high streets or silent pubs. Reading the news is, for the most part, a solitary activity.

Even online, taking in the news isn’t particularly social, at least until you rush to share it on Facebook, Twitter or WhatsApp. Indeed, given most people now get their news via the internet, you might think the industry would be one of those least impacted by social distancing and self-isolation.

But in reality, newspapers are more exposed to the economic shock the virus is causing than most other businesses. There are serious doubts about how many will actually survive the lockdown and its aftermath.

Early signs come from the country’s biggest news organisations, two of which this week announced they are furloughing hundreds of staff, and asking many others to take pay cuts.

Reach, which owns the Mirror, Daily Express, Daily Star and scores of local papers is furloughing almost 1,000 staff, and asking its other staff to take a 10 per cent pay cut – 20 per cent for better-paid senior managers.

Meanwhile, DMGT, which owns the Daily Mail and Mail on Sunday, free paper Metro and the recently acquired i, has asked everyone earning over £40,000 to take a graduated pay cut in return for shares in the company. The Evening Standard, The Independent's sister title, has also furloughed a number of full-time employees, with all other staff having their pay reduced by 20 per cent for two months, down to a floor of £37,500.

The measures aren’t that unusual in these unusual times. But those putting them in place will be well aware that times will remain tough even long after the virus is beaten back and the lockdown is eased.

So why are newspapers facing such a hit when, in such an all-consuming crisis, our hunger for information and diversion has never been greater? The answer is about where most still make their money: advertising and print.

The impact on print is pretty self-explanatory. Popping down to the corner shop each morning to pick up the paper and a pint of milk is now a no-no. One trip to the shops once a week disrupts that habit, and the fact that the most vulnerable to this disease – the elderly – make up a disproportionately large number of those who still buy print newspapers. Most outlets reach far more people online than via their print products, but print readers are, for the most part, contributing more financially than their digital counterparts.

The hit to the other source of income that funds newspapers may be felt even more severely, and for longer, than simple physical sales. For many news publishers, advertising is still the main source of income, and for almost everyone else it is a major contributor. Print advertising tends to bring in many times more money per reader than digital, so declining print readership is a double whammy, though digital is far from immune.

In fact, much digital advertising has disappeared completely during the crisis. Innovative outlets that promised new forms of digital ads may have been struggling before the crisis, but some, such as US site The Outline, have already received a fatal blow from the outbreak.

There are two linked problems for digital ads here. One is that advertisers have long tried to avoid putting their ads against depressing or controversial content. That had already led to farcical situations such as attempts to bar ads from appearing next to articles about terrorism by blocking “IS”, inadvertently taking in the other more common instances of those two letters being paired.

Now, specific bans on adverts appearing next to articles using the words “coronavirus” or “Covid” may avoid a similar mix-up, but in the current environment, there isn’t a lot that meets that coronavirus-free criteria being produced. Indeed, some outlets have tried to ramp up production of sports content that does not even mention the outbreak, even as it grapples with the cancellation of the events it is built around. Outlets including The Independent called on brands to stop blocking their adverts appearing alongside coronavirus content last week, warning that use of “blocklist” technology would otherwise cost publishers £50m over the next three months.

More fundamentally, advertising spending is closely linked to the overall state of the economy and we are headed towards, or probably in, the worst depression since the Great one almost 100 years ago.

That will be a huge hit to newspapers for however long the economy takes to recover, but it is also likely to be felt in the news business long after.

Following the 2008 financial crash, much of the money that flooded out of news as the economy crashed flowed back in bits and bytes to other digital outlets, in particular Facebook and Google, rather than the websites of newspapers. The odds of similar happening again are very high.

Those running newspapers and other news organisations do know, or at least should know, all this. The key issue for them is: will the rest of us care?

Hunger for information – about the virus, about its impact, about what is happening and will happen – has never been stronger. The test will be, quite simply, whether people are prepared to pay for news. If that advertising money fails to return, more and more news organisations will accelerate their plans to charge for news and other content online, with subscriptions and paywalls. Some – such as The Independent and The Guardian – have already been encouraging readers to support them through donations.

The question will be whether, once we can go back to pubs, shops and sports, enough of us remember the organisations that kept us informed while we were stuck in our homes. Will enough of us get out our wallets and pay to keep them alive?