Media on the mend
About 963 newsroom jobs have been lost so far this year — down 91% from the 10,576 cuts through the same period last year, according to new data.
The big picture: Other factors, like record advertising growth and the speedy return of live events, suggest the media industry is rebounding quicker than it originally anticipated.
Why it matters: A year ago, media companies were reeling from the early effects of COVID-19 — scrambling for loans and laying off thousands while hoping to make it through a possible recession.
- Now, things are looking up, mostly because the economy didn't collapse.
Driving the news: New data from Challenger, Gray & Christmas, Inc. suggests that while many media jobs are still being lost, hundreds are starting to be added.
- So far this year, media employers have announced 725 new hiring plans, compared to just 12 this time last year.
Advertising is exploding. Global ad spending is expected to grow by $78 billion in 2021 to $657 billion, an all-time high, according to a new mid-year forecast from advertising firm Magna.
- That follows a decline of 2.5% in 2020, which prompted dozens of media outlets to implement sweeping layoffs and pay cuts last spring.
- Today, many publishers say their ad revenues have fully rebounded or even increased following last year's tumultuous turn of events.
- Looking ahead, the U.S. advertising market is expected grow by $34 billion to reach $259 billion this year — its strongest growth rate in 40 years.
Be smart: The adoption of new digital products, like virtual events, e-commerce, and online courses, has also pushed media companies and newsrooms to diversify their revenue, and for some, make even more money than before.
Yes, but: There are still some setbacks that will impact the industry this year, especially at the local level.
- Donald Trump's exit from office means that subscription revenues for many publications aren't growing as fast as they did last year. Traffic for news sites is mostly down across the board, according to data from SimilarWeb.
- Local newspapers continue to face headwinds as private investment firms look to consolidate local titles even further post-pandemic.
- Even though SPACs (special purpose acquisition companies) are seen as strong investment vehicles for many media companies, concerns about the SPAC market cooling means that not all firms will be able to raise the money necessary to go public through a blank-check company.
Bottom line: The anticipated collapse of the economy drove media companies to take drastic measures in the first half of last year to avoid going under. One year later, the media industry broadly is on the mend.