May 5, 2020 - Economy

Western governments pressured to save local news from coronavirus strain

Illustration of a hand controlling the earth like a puppet master

Illustration: Aïda Amer/Axios

Governments in Western democracies are being pressured by the news industry to come up with relief plans to support local media companies upended by the coronavirus pandemic — and some have already begun implementing small aid programs.

Why it matters: Most experts agree these efforts are not sustainable in supporting the local media ecosystem long-term.

  • In Canada, the federal government said it's planning a $30-million COVID-19 awareness advertising campaign, as well as possibly implementing tax credits for newspapers in light of the pandemic.
  • In the U.K., the government has been directing more advertising dollars towards local publishers.
  • In the U.S., there have been calls to do similar redirections of ad dollars by members of Congress, as well as calls to make it easier for news companies to apply for small business relief funds.
  • In Australia, the government unveiled a plan to force Facebook and Google to pay for news. While the plan had been in the works for a while, unveiling it during the pandemic can be seen as an effort to address local news' woes during the crisis.
  • In Ireland, news publishers are urging the government to take similar action by implement a 6% “windfall tax” on tech giants, with proceeds going to the news industry that's being impacted by the pandemic.

Be smart: While these measures could pose some risk to the editorial independence of local outlets, experts say local media is left with few options at this point to really consider denying the aid.

  • "As long as there’s a culture where a local station takes the ad money but still investigates government actions, I think it’s ok," says University of New Haven professor Matthew J. Schmidt. "But it’s always a judgement call about where that line is."

The bottom line: "These types of policies make a lot of sense. Where there is market failure in a sector that has an important civic function, then it's always appropriate for the government to step in to help maintain those public services," says Rodney Benson, chair of NYU's Department of Media, Culture, and Communication.

Go deeper...Scoop: Congress' local news bailout push

Go deeper