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The Patriot Act: The News Industry is Being Destroyed

Hasan Minhaj nails it on the crisis facing local news and the weakening of investigative journalism. Watch it for the lolz, but here are the top 14 facts everyone needs to know, now more than ever.

29 June 2020

The destruction of journalism and the news industry

1) 73% of Americans say they trust their local newspaper, while only 55% have confidence in national TV news.

2) Newspapers account for 25% of all US media outlets (others are radio ~50%, TV ~15%, online ~10%), but produce 47% of all original reporting.

3) Local newspapers are key to keeping powerful people accountable, e.g.
the BostonGlobe v Catholic Church; Williamette Week v former Governor of Oregon; Harrisburg Patriot News v Jerry Sandusky; Indiana Star v Subway Jared & v Larry Nassar; Chicago Sun-Times v R. Kelly; Miami Herald v Jeffrey Epstein.

4) Local newspapers are facing serious financial trouble, leading to layoffs and closures. Since 2004, US newspaper revenues have fallen 57% and over 2,000 local newspapers have shut down.

5) One of the causes is a loss in ad revenues, with a major shift in ad dollars going to Google and Facebook. More than 80% of news-related ad revenues now go to these tech giants instead of news outlets.

6) Instead, local newspapers have to rely on inefficient and unfriendly online subscriptions and paywalls, which only major outlets like the New York Times, Wall St Journal, and Washington Post are really making work.

7) Another issue, spotlighted by Taylor Swift and Alexandria Ocasio-Cortez, is private equity: firms buy up local papers with huge loans, load the debt on the paper, then squeeze it for profit through layoffs, asset sales, and management fees. If the paper goes bankrupt, they don't owe a thing.

8) Specifically, private equity firms that go after struggling businesses are called "vulture funds", and 30% of all US newspapers are controlled by two major vulture funds: Fortress Investment Group & Alden Global Capital.

9) The difference can be significant in terms of lives affected. From 2012-2018 local newspapers lost on average 32% of their workforce. Those owned by vulture funds lost >70% of staff.

10) Whereas a successful paper might have a ~10% profit margin, vulture-fund owned papers have between 14-30% profit margins due to the stripping down of costs (e.g. staff, assets) that eventually make the paper unsustainable as a business.

11) In 2018 a University of North Carolina - Chapel Hill study revealed that ~7% of counties in the US (225 out of 3,141) have 0 local papers and ~50% only have 1 local paper - describing these areas as "news deserts".

12) With so many cuts, only 30% of papers have someone covering the local statehouse, creating serious gaps in the 4th Estate's ability to hold officials accountable.

13) In the vacuum of original, investigative reporting we get a social media storm of bots and misinformation, leading to increasingly partisan politics and polarized societies.

14) So if you want to live in a world where facts are checked and power is held accountable, we need local news reporting and investigative journalism, and we need new business models to sustain them, e.g. tax-funded trusts, non-profits, and new payment platforms.

These are some of the principles that underpin the work we do at StreemPay. We are building a new payment platform so all the journos, writers, bloggers, video and podcast makers, gamers, and course providers can earn the money they deserve from the content they create.

We're 100% bootstrapping, indiehacking right now, but with your help, we can get this off the ground and give local papers the support they need! If you're interested in supporting our work, join the waitlist!

Catch the full video here:

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