$500 million for local news?
Plus, Meta plans to add fact-checking to Threads
Hi there,
Last week, we learned that several philanthropies, including The Knight Foundation and The MacArthur Foundation, are considering a joint investment in local news, with the figure rumored to be as high as $500 million over five years.
It’s helpful to put this number in perspective:
Between 2006 and 2020, annual U.S. newspaper revenue fell by around $40 billion, from ~$60 billion to ~$20 billion.
U.S. foundations have given around $1.5 billion per year on average in media grants, between 2009 and 2021. (Annual philanthropic funding roughly doubled between 2009 and 2015 as the local news crisis first accelerated.)
In 2019, The Knight Foundation, the Facebook Journalism Project, and the Google News Initiative each committed $300 million ($900 million across all three).
Over the past decade or so, this philanthropic funding has been critical for the industry. It provided direct support to hundreds of local publishers and helped catalyze a generation of organizations supporting news, including the American Journalism Project, Report for America, and NewsMatch.
Today, nonprofit models are a key piece of the local news ecosystem. The Institute for Nonprofit News now counts nearly 400 outlets as members. And as the big local chains continue to cut jobs, these nonprofits are increasingly filling important coverage gaps. As one example, nonprofit newsrooms now employ 187 full-time statehouse reporters, up from just 48 in 2014. These reporters account for 20% of the country’s total statehouse press corps.
As it grows, the nonprofit funding landscape is changing. In 2021, NewsMatch saw giving from local foundations eclipse national foundation dollars as its largest source of matching funds – and then grow by 38% in 2022. Individual donations, though, have declined in each of the past two years after peaking in 2020. Separately, Meta and Google appear less committed to the space, and much less likely to commit another $300 million each.
Amid this change, $500 million would have a significant impact. As Sarah Alvarez, the founder and editor in chief of Outlier Media, wrote about the potential investment: “More money from philanthropy won’t be enough to help transition local news into the service it needs to be… But right now philanthropy is a necessary bridge to help us build networks and models that can make local news a dependable community service.”
And here’s the latest news in digital media:
Meta plans to add fact-checking to Threads. At an Australian government hearing yesterday, Meta’s head of public policy for the country previewed some upcoming features: “Areas such as labels for state-affiliated media and fact-checking are all areas where we see a lot of value, and it's our aspiration to build that out expeditiously.” Separately, Threads is planning to add branded content tools so marketers can begin experimenting with paid promotion on the platform.
More on publishers:
WaPo hired Vineet Khosla, previously at Uber, as its new CTO.
Morning Brew is ending its Money Scoop newsletter, which had over 350K free subscribers.
The LA Times now has about 550K digital subscribers.
More on platforms & AI:
A US judge ruled that Microsoft can close its acquisition of Activision.
Microsoft launched AI-generated ad headlines and descriptions.
Shutterstock announced a six-year partnership with OpenAI.
AI startup Anthropic released a new version of its chatbot, Claude.
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What do you think of Twitter’s Community Notes as an alternative to traditional third party fact checking? Do you think Threads will consider this approach?