COVID-19 has accelerated the shrinkage of journalism.
Why it matters: If it could happen to The Atlantic, where 68 staffers were laid off today, it could happen to any media company.
- Hundreds of local, national and even international newsroom jobs have been axed, and student internships and fellowships have mostly been canceled.
The big picture: 2.4 million Americans filed for unemployment last week, reports Axios' Courtenay Brown.
- The pre-COVID record number of filings was set in 1982 at 695,000.
- New York state's Labor Department told reporters this week it has paid out 4.5 years' worth of unemployment benefits in just over two months.
Between the lines: The coronavirus hit diversified publishers on multiple fronts.
- Advertising: Publishers who enjoyed record COVID-19 web traffic weren't able to monetize it, as ad rates collapsed.
- Events: In-person events, where The Atlantic focused considerable attention and where publishers can command a premium, are currently out of the picture. Virtual events are on the rise, but they don't command the same price point.
- E-commerce: Amazon and big mass retailers have cut affiliate fees, cutting commerce revenue from many publishers.
- Subscriptions: Many publishers have pivoted toward subscriber models, but with a few exceptions, those gains aren't even close to enough to compensate for the lost ad revenue.
What's next: Layoffs like this in crisis usually happen in waves, so a fall coronavirus resurgence could bring another round of job losses.
- In the future — as more companies integrate remote work into their culture — other jobs will begin to get eliminated too, like in-person sales teams or teams that help produce print products that will not come back.
The bottom line: The Atlantic's troubles, combined with the struggles at other billionaire-backed publications like the Los Angeles Times, serve as an important reminder that the industry has few sustainable paths forward without viable business models.
