Wednesday Edition

We're trying something new today.

We’re trying out something new today as we bring you an all-media edition of Bubba News. It may be a little wonky to look so closely at media, but as someone who helped build several media companies over the years, I’ve always thought understanding what’s going on at the content factories helps frame up the news you consume.

We’d love to hear your feedback. And as always, we appreciate you sharing Bubba News with others. Special thanks to Power Line Blog for featuring us on their site.

1. An Industry in Decline

While there are a handful of success stories, traditional media companies are generally struggling these days. (CNN)

The latest: Earlier this month, Washington Post publisher Will Lewis revealed the storied newspaper lost $77 million last year and experienced a 50% drop in audience since 2020.

Lewis to staffers at a company meeting: “To speak candidly, we are in a hole, and we have been for some time.”

The Post's issues reflect a wider industry trend:

  • Weekday circulation of newspapers (including print and digital subscriptions) is down 8% from 2021 and 32% from five years ago, according to a Pew Research Center study from November.

  • Digital traffic to top 50 news sites has been declining for two years and fell 20% in Q4 2022.

  • Advertising revenue has plummeted since peaking in the 2000s.

Chart: Pew Research Center

Bubba’s Two Cents

Supply of content is as high as it’s ever been, and AI is just starting to get used. This drives down the value of a click, which is what a lot of these publications have been chasing in the digital age. It’s not that they don’t do good work, it’s that a ton of the work they do is like hollow calories to social media or search engine audiences that don’t really care. Media should be either functional (useful), or deep in expertise. With operations built to produce content that momentarily steals your attention, and savvier audiences tired from 15 years of clickbait, we’re seeing a bit of a reckoning in media.

2. One of the Biggest Problems With Today’s News

News has always leaned negative, but in the social media era it’s gotten even worse. (Briefing Book)

Chart: Briefing Book

The latest: A new study conducted by Stanford researchers found news coverage of gas prices spikes when they’re high, but remains flat when they’re low.

  • “High versus low gas prices have equal and opposite impacts on consumer pocketbooks, and could in principle be equally newsworthy events. In reality, the media only covers gas prices when prices are above average,” the researchers noted.

  • Each $0.50 increase above $3.50 raises coverage by 7.5 percentage points.

  • 70% of gas price coverage is negative in tone.

Bad news has gotten more common: According to a 2022 study, “headlines denoting anger, fear, disgust and sadness” increased from 2000 to 2019, while “emotionally neutral headlines” decreased over the same time period.

Online news outlets are incentivized to be doomsayers: A study published in Nature last year found “negative words in news headlines increased consumption rates (and positive words decreased consumption rates).”

  • In fact, researchers learned that each additional negative word in an average-length headline made users 2.3% more likely to click on it.

American media may be uniquely negative: According to one study, 91% of COVID-19 stories from major U.S. media were negative, compared to 54% from non-U.S. news sources and 65% from scientific journals.

The media makes polarization worse: News and social media have played a role in Democrats and Republicans becoming more hostile toward each other.

Bubba’s Two Cents

One thing we’ve learned about sensationalism and negativity is that sure it works to drive eyeballs and get attention, but a) there’s only so many times you can keep going back to that well before you see diminishing returns and b) it’s not the best way to build a product people are going to be loyal to.

3. Checking In on Local Media

The media industry's decline has hit local outlets especially hard. (Cato Institute)

The latest: Two new California bills aim to tax social media giants like Google and Meta, which have been blamed for the decline of local news, and use the funds to support local media.

UC Berkeley School of Law dean Erwin Chemerinksy: “When news organizations vanish, there is no one to go to the city council meetings or do the investigative reporting to uncover corruption or report on local elections. Google, Facebook and Instagram do not have newsrooms to do so and they are not going to create them.”

Many state governments are taking concrete steps to save the sputtering local news industry.

  • California: Assembly Bill 179 provided $25 million to support local reporting in underserved areas and put 120 journalists in the field by 2025.

  • New Jersey: In 2018, New Jersey created a consortium to distribute public funds for local news coverage.

  • New Mexico: The state’s Local News Fund has been approved for $200,000 in government funding.

The scale of the problem: About 2,500 local news operations have closed over two decades (360 since the COVID-19 pandemic began).

  • 70 million people live in areas with one or no newspapers.

4. A Major Trend in the Business of Media

Traditional media's struggles have opened doors for right-leaning newcomers to serve overlooked groups. (Axios)

The latest: The Daily Wire may be a conservative media company, but it made $22 million last year selling products and merchandise.

  • Jeremy's Razors: $19 million in 2023, up from $10 million in 2022.

  • Daily Wire’s merchandise store: Over $3 million.

  • Mayflower Cigars: Surpassed $2 million since its November 2023 launch.

From Axios’ Sara Fischer:The Daily Wire launched its Jeremy's Razors brand in March 2022 after direct-to-consumer razor company Harry's Razors pulled its ads from the Daily Wire's 'The Michael Knowles Show,’ citing ‘misaligned values.’”

Bubba’s Two Cents

Daily Wire knows they have an audience that feels so strongly about the way things are going in America that they’re willing to pull out their wallet and change their habits if given the option — and they have built in distribution for advertising with their own media. It’s hard to see CNN, Fox, or NYT pulling this off.

5. The Future of News?

AI companies are partnering with news publishers to strike deals that may shape the industry's future, but partisan sites are being excluded. (Semafor)

OpenAI has inked a five-year content licensing deal with News Corp. for AI training, adding to its partnerships with key media players.

The companies that are in on the deal mostly range from center-left to center-right:

  • The Associated Press

  • Politico

  • Axel Springer (Business Insider)

  • The Financial Times

Bombastic, partisan sites that used to drive huge traffic on social media are on the outside looking in:

  • Breitbart

  • The Daily Caller

  • HuffPost

  • The Daily Wire

Tani on what’s at stake: “The rapid evolution and progress of generative AI has frightened many media companies. The Wall Street Journal reported late last year that search accounted for nearly 40% of publishers’ traffic, much of which will likely be cannibalized by AI-fueled news summaries and other tools in the coming years, meaning declines in ad and ecommerce revenue.”

Bubba’s Two Cents

AI is only as smart as what it’s fed - so where do you draw the line on what makes the cut and what doesn’t? Sure, it’s easy to say this or that site shouldn’t make the cut, but drawing a line is fraught with peril. The media environment is already heavily skewed to the left because of the mainstream, so can we trust that AI will be balanced? I wouldn’t be betting on it. Unfortunately, no one is smart enough to tell you exactly what will happen when news comes out the other side in unforeseeable ways.

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