The non-substitutability of local news?Advertising and the decline of journalism's umbrella market model

Abstract

This article addresses the challenges facing local newspapers as the digital economy transitions to artificial intelligence (AI). We interview five CEOs of Scandinavian newspaper corporations, representing small, mid-sized, and large newspaper chains. The analysis focuses on three main factors emerging from the interviews – technological transformations, digital advertising markets, and corporate enrolment – and how they relate to business model disruption and the non-substitutability of local news. The analysis is set within the framework of the digital transformation, which, for the purpose of this study, we argue consists of two phases: getting online (until about 2014), and algorithmic adaptation (the introduction of programmatic advertising and audience metrics from about 2014). The analysis concludes that as non-substitutability is lost on the advertising side of the market, this challenges the umbrella model of newspaper publishing.

Blind spots and diversity in a local media landscape

“…From 2011 to 2019, the number of Norwegian journalists reduced by 20%, and this downsizing also affected the local media (Bjerke et al, 2019). The need for cost adjustment to withstand the loss of advertising is crucial for many media companies (Sjøvaag and Owren, 2021), and with fewer journalists and resources, complicated issues demanding knowledge and insight might be dropped from the news agenda. Thus, characteristics of the professional roles of local journalists, as well as the structural framework of journalistic practice, might contribute to how the agenda-setting process is carried out and which blind spots occur.…”

“…The media structure in Norway is described as an umbrella, underlining the prevalence of newspapers at four geographical levels of coverage: national newspapers, regional newspapers, local dailies and local weeklies (Høst, 2005). The umbrella model describes how information segments media markets according to geography (Sjøvaag and Kvalheim, 2019: 303; Sjøvaag and Owren, 2021). In addition, the national broadcaster NRK consisted of 48 local or district offices throughout the country in 2018, all of this making local media sources the backbone of the media structure (Høst, 2005).…”

“…In the contemporary journalism ecosystem, social media plays a vital role in facilitating interconnectedness and the sharing of journalistic content (Napoli et al, 2015: 16). In addition, the internet and the use of algorithms have challenged the business models of local media, which have more or less lost their advertising market to Facebook and Google (Sjøvaag and Owren, 2021).…”

La participación y la generación de valor en medios independientes online en Colombia

“…El pago de suscripciones es una de las prácticas más recurrentes en la industria periodística en Internet, superando incluso los ingresos por publicidad (Syarizka, 2022;Beckett & Mansell, 2008;Sjøvaag & Owren, 2021). Este modelo suele apelar esencialmente a la vinculación de clientes leales a un servicio específico y al acceso a contenido de valor (Sjøvaag & Owren, 2021). Asimismo, contempla modelos de pago parciales para contenidos premium en plataformas gratuitas (freemium) (Tejedor & Pla Pablos, 2020).…”

A Erosão da Proximidade: Questões e Desafios do Jornalismo Local na Sociedade Contemporânea

“…For Sjøvaag and Owren (2021), local journalism has suffered particularly acutely from the failure of its "umbrella" market model -which guaranteed it a share of the advertising market from advertisers looking for local targets. The introduction of algorithmic and programmatic processes in advertising was a major blow to the sector.…”