Why sustaining an advertising-driven business model is difficult for community newspapers

Where once a local business owner might support a community newspaper, those crucial advertising decisions are now being made in corporate offices located in larger urban centres, not locally. Innovation editor Rob Washburn reports in this three-part series on the value of community journalism. When a community newspaper closes, it is a great loss. Still,…

When a community newspaper closes, it is a great loss. Still, publishers will argue it is the economic reality of the times. Many scholars argue the importance of community journalism to democracy and citizenship, often separately from the business decisions. The historic tension between public service and economics is longstanding. But what if there is another set of lenses beyond journalism, political, economic, communications theory and other traditional disciplines to shed light on the significance of news media in rural Canada? This three-part weekly series will place community news media within the context of rural development.

Read part one on why we should care when a community newspaper shuts down.

By Robert Washburn, Innovation Editor

Rural economies face an unusual combination of pressures unlike major urban centres, where there is more diversity in economic drivers. These create a number of challenges for community newspapers.

Since the implementation of the North American Free Trade Agreement in 1994, rural Canada has undergone massive transformations, economically, politically and socially. Where once manufacturing, natural resources and agriculture were the mainstay of local economies, many of these primary sources are gone, in decline or under stress, leaving communities to face huge challenges. Scholars, politicians and economists seek to understand these forces and resolve these issues, as communities attempt to transform themselves with varying degrees of success.

There is also massive change in the retail and service sectors. Big-box retailers and franchises dominate the economic landscape, altering the relationship between advertisers and news media. Crucial advertising decisions are now being made in corporate offices located in larger urban centres, not locally. Where once a local business owner might support a community newspaper for reasons beyond just economic ones—loyalty, community-mindedness, personal relationships—this is becoming more rare. Sure, local media are the best way to reach a targeted audience, but the dynamic is more complex and promises to become even more complicated in the future.

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It also means the newspaper chains dominate the industry as independents vie for advertisers. Those publishers and owners who can offer large circulation figures across a diverse geography may find it easier to score major advertising accounts compared to those looking for local-only. No doubt the competition is fierce. This is mediated somewhat by community newspaper associations offering members support services, such as Ad Reach in Ontario, which allows buyers to purchase ads in all its member papers. Still, independents face hurdles. There are 275 independent publishers who own a single title out of the 1,029 community newspapers in Canada in 2012. That represents just less than one- third of the titles.

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While newspapers continue to generate revenue from flyers and advertising sales, technology and future business practices create more hurdles. New and emerging technologies can reach consumers even more directly with highly targeted marketing and promotions online through various platforms and tools, rejigging the landscape further.

What does the future hold for community newspapers in the context of these pressures in the long term? Will readership and demographics be sufficient to sustain an advertising-based business model? How will changing fundamental economic structures within rural communities affect community newspapers?

The capacity of rural communities to adapt and change, and in some cases even survive, depends on a concept academics call community resiliency. This is the ability of residents and groups for local action, allowing them to come together for a common goal. Through discussion and collective action, the community is able to ascertain assets and capital, including social capital, in hope of transforming itself. Rural communities that are not able to do this struggle along or collapse, according to scholars like Stacey Wilson-Forsberg.

There are many economic factors involved in determining community resiliency, such as physical capital, natural capital and financial capital. And the social processes are equally significant. Interactions between citizens, business and institutions are considered vital for long-term sustainability, building such things as human capital, social capital, political or civic capital.

To do this, networks and flows of information are essential in order for collective action to take place. The role of community journalism in this context can be significant.

The next installment of this community journalism series will appear the following Friday.

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Tamara Baluja

Tamara Baluja is an award-winning journalist with CBC Vancouver and the 2018 Michener-Deacon fellow for journalism education. She was the associate editor for J-Source from 2013-2014.