Lack of Trump bump adds to pressures on US media

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Election years are typically boom times for the industrial complex of cable channels, newspapers and local TV broadcasters that make up the US news media.

Yet with only five months to go to the vote for the White House, the industry is far from thriving. Instead, all around the US news business, red signals are flashing.

An array of outlets have suffered shrinking audiences while large players including NBC News, the Los Angeles Times and The Wall Street Journal have cut jobs. Even rightwing media that might have expected to see an election-related boost have suffered from falling reader traffic.

Without a “Trump bump” or once in a generation pandemic to inflate audiences, the US media has been left to confront the structural challenges that have battered it for decades, while staring down the latest potential threat: artificial intelligence. 

The hardest hit are those publishers that depended on big tech companies to siphon audiences to their websites. Google has been making changes to its search engine algorithm that has hit web traffic for some publishers. Meta, meanwhile, has in effect exited the news business, having last year de-prioritised news in its feeds. Outlets that were wholly reliant on attracting big traffic numbers, such as BuzzFeed News, have been wiped out entirely.

Last month, Google introduced AI-generated answers to queries in its search results. The transition has not been smooth, with the site coming under fire for erroneous and absurd responses, such as advising users to glue cheese to pizza. 

But the change is already having an impact on news outlets that have relied on their stories being prioritised in Google’s search results. In an internal memo last week, Business Insider chief executive Barbara Peng told staff that traffic from Google had been “especially volatile” over the previous month. “The path ahead will be difficult,” she warned. BI’s website drew 105mn visitors in May, which was down 9 per cent from the prior month, according to Similarweb data. 

In comparison, in 2020, when the Covid-19 pandemic and the first Biden-Trump showdown kept Americans glued to the news, BI’s site was consistently drawing around 150mn monthly visitors, according to Similarweb. 

Other large news outlets have suffered similar falls from their 2020 highs. brought in 564mn visitors in May, down 30 per cent from the same period in 2020. The drop-off was even steeper for The Washington Post, which drew 132mn visitors to its site in May, a 46 per cent decline from four years ago — a fact recently cited by chief executive Will Lewis, who rattled staff by telling them: “people aren’t reading your stuff”

Artificial intelligence has, in the very short term, become an unexpected financial boost to those publishers who have struck deals with OpenAI in recent months. Rupert Murdoch’s News Corp last month agreed a deal that gave OpenAI access to its news archives in exchange for $250mn. The Financial Times, the Atlantic and Axel Springer have also made deals with OpenAI in recent months. 

But there remains a great deal of uncertainty as to whether AI will ultimately harm news publishers by cannibalising audiences, and if so, how deep the damage will be. “No one has a clue”, said a senior executive at one of the publishers who has made a recent deal with OpenAI. 

Some executives in the business expect that in the next year or two, a proper payment structure for news copyrights and AI will be established. This framework could be achieved through legislation, lawsuits or negotiations. Notably, the New York Times is currently suing OpenAI and Microsoft

As it battles OpenAI, The New York Times remains a very large exception to the broader pain felt in the industry. The paper, which is publicly traded but is controlled by the Sulzberger family, has gone from strength to strength as it expands into a modern media company with cooking, games and other offerings. The NYT’s stock is up by more than 35 per cent over the past year. 

But for most other media groups, the competition is brutal. Local news in the US has long been in crisis, with a steady flow of papers closing. And if real competition was not hard enough, political operatives are inventing fake rivals for attention. This week, the NewsGuard announced a fresh milestone: the US has more “pink slime” websites — which masquerade as local news outlets but are actually funded by political groups — than real local daily papers.


Business Asia
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