Sara Fischer: Media cuts persist amid ad market slowdown

August 6, 2024

Source: AXIOS

Written by: Sara Fischer

This piece is by WWSG exclusive thought leader, Sara Fischer.

A slew of cuts announced Tuesday suggest the media industry’s struggle to regain the advertising and subscription momentum lost during the Biden era will persist for the foreseeable future.

Why it matters: The rapid rise of AI-riven search engines and an unpredictable economy only threaten to disrupt the ecosystem even further. Publishers are trying to get ahead.

Continued cuts, even amid one of the most unpredictable elections in modern history, suggest media companies can’t be saved by a busy news cycle.

Driving the news: The Tampa Bay Times on Tuesday said it needs to reduce payroll by 20% as part of a wider set of cost-cutting measures. The newspaper will offer buyouts to its roughly 270 full-time employees, it said, which includes about 100 journalists in the newsroom.

Axios said on Tuesday it’s laying off 50 employees, around 10% of its staff, according to an internal memo from CEO Jim VandeHei. It’s the company’s first sizable round of cuts since it was founded in 2016.
Future on Tuesday said it plans to shutter the print magazines and newsletters for Broadcasting & Cable, Multichannel News and NextTV and replace them with one newsletter and a section on nexttv.com.
GameStop last week said it would shut down Game Informer, the oldest gaming magazine in the U.S., and laid off staff.

Zoom in: Layoffs and various cost-cutting measures impacting jobs have impacted nearly every major publication this year, including CNN, Warner Bros Discovery, The Messenger, Sports Illustrated, Los Angeles Times, Wall Street Journal, Engadget, Intercept, Bustle Digital Group, Vice Media, The Daily Beast, BuzzFeed, NowThis, Paramount, Disney, TechCrunch, Forbes, Insider and others.

The big picture: A slowdown in the ad market has had an outsized impact on publishers who can’t compete with Big Tech on low-cost advertising placements.

Publishers have struggled to retain the same level of subscriber interest around political news that they saw during the Trump era.
Social networks, mainly Meta, have pulled back on distributing news content, causing traffic to crater.

Between the lines: More newsrooms are trying to cut costs while shifting focus to premium products, like events, that don’t compete with Big Tech firms for ad dollars.

The rise of AI-driven search engines has also forced more companies to consider new licensing deals with AI firms.

The bottom line: “Media companies of the future will be leaner, more demanding of distinctiveness, more indispensable to their audience and advertisers,” VandeHei wrote in a staff memo. “There will be no market for mediocrity, or widely known, or fine-but-not-essential content or work.”

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