A survey of Press Gazette newsletter subscribers has found a third of industry professionals fear severe financial impact and even bankruptcy or insolvency from the coronavirus crisis if the current situation continues for three months.
A further 34 per cent also expect to see negative financial impact during that time period, though less drastic.
- June 5, 2020
- June 5, 2020
- June 4, 2020
Just six per cent and ten per cent of respondents to the survey shared a positive or minimal impact outlook respectively.
Fifty-two Press Gazette subscribers responded to our survey seeking views on how the pandemic is hitting news media professionals. The survey (live from 20 March to 3 April) also asked readers to share any examples of learnings and best practice.
Many of the responses painted a bleak picture of how the impact of the shutdown is affecting businesses from news agencies, local newspapers and B2B websites to freelance journalists.
Respondents included reporters (30 per cent), editors and news editors (30 per cent), and chief executives/company owners (ten per cent).
Asked what the impact of three months of lockdown would be, one freelance broadcast journalist said they will “probably be homeless”, and others used words such as “drastic”, “disastrous”, and “dicey”.
Five – including those from news agency, B2B and media analysis businesses – specifically warned they were at risk of going bust in that time.
One editor at a small news and features agency in England said: “[There is] only one story in town which is devastating for a small agency like ourselves.”
Another agency news editor said they have less stories to sell to papers, adding their revenues will “shrink and depending on our clients’ ability to make money could be catastrophic if they start cutting fixed rates”.
The issue also affects freelances who sell stories to publishers, with one saying: “The virus is taking all of the pages so they buy less from me.”
But even publishers that are being kept busy are struggling to avoid financial challenges.
Some 37 per cent of respondents said their business had seen increased web traffic, compared to six per cent who have seen traffic go down. But 27 per cent said ad revenues had dropped while 12 per cent said print circulation was down.
Respondents were split on the impact on online subscriptions, with six per cent each saying they had increased and decreased.
Gavin van Marle, founder and managing editor of supply chain and logistics industries B2B website The Loadstar, wrote: “We have been absolutely overwhelmed with stories for the last six weeks [and] also inundated with requests for interview from broadcasters and national newspapers.
“But at the same time the huge decline of advertising revenue on which we largely depend has left us very financially vulnerable.”
He added: “If it goes on for more than three months, supply chains will be turned upside down; it will mean more readers for us but we will also probably be heading towards insolvency.”
Nevertheless some remained positive, with one B2B website editor covering the finance and tax industry saying they hope to grow the business over the next three months as it is subscription-based. Their traffic has increased ten fold, they said.
Some 40 per cent of respondents to the survey said they had launched, or were planning to launch, a new product or service in response to the crisis.
They included coronavirus-specific live blogs and landing pages online, a magazine restructuring to focus on taking a more upbeat tone and highlight home-based activities, new video features, webinars to partially offset lost events revenue, and introducing free website access.
One B2B news editor said: “From an editorial perspective we have introduced regular coronavirus features, but new products, sites or services are beyond our already stretched capacity.”
Another B2B owner said that if nothing changes soon “revenue from event sponsorship is inevitably going to be down”.
“We have a cash buffer and debtors that will see us through but have to hit autumn ready to pay venues if events resume.”
Despite widespread recognition that local newspapers are playing an “absolutely vital” role throughout the pandemic, many have been badly hit by the financial implications.
The free Purbeck Gazette, which owes all of its revenue to advertising, is one of many titles that has been forced to temporarily suspend publication and furlough staff for an indefinite period until the outlook starts to look brighter.
Its editor wrote: “We have immediately lost 80 per cent of our advertisers, leaving us with no possibility of printing and distributing as we could not possibly cover the costs.
“I can publish online but this is of no help to those in our community who still do not use social media or websites. If we are on furlough then we are not legally allowed to work. If we are not on furlough there is no revenue coming in to pay wages as we are only funded by advertisers.”
At The News in Portsmouth, owned by JPI Media, one journalist said they could foresee ad revenues plummeting to “unsustainable levels”.
But in Brighton, local TV station Latest TV’s owner is remaining positive as it sees “huge” numbers watching as well as increased traffic online.
Editor and owner Bill Smith said: “Local is needed…. we are doing more not less. Showing what is going on, not talking about it as far as possible.”
Smith also said he believed the crisis would “show people the importance of local and community collaboration” as he called for print, online and broadcast businesses to work together more.