Local media consolidation and the rise of paywalls, both meant to combat a bleak ad outlook, could deepen the growing divide between America's information consumer haves and have nots.
Driving the news: Nexstar Media Group has agreed to acquire Tribune Media for $4.1 billion, as first reported by Reuters and confirmed by Axios' Dan Primack. This would make Nexstar the largest owner of U.S. local television stations.
- With the Nexstar acquisition, over $15 billion worth of local TV stations in the U.S. have changed hands since 2016. A lot more is on the way.
Why it matters: That gap is often defined by wealth and geography, rather than the public and reader interest.
Be smart: Most Americans prefer to get their news from television and local TV news is by far the most-watched form of TV news.
The big picture: Nexstar's acquisition comes on the heels of changes in decades-old media ownership rules that apply to broadcasters and newspapers, which are combining with new types of competition in news and entertainment to creating incentives for consolidation.
- A record number of newspaper sales and closures/mergers via the seven biggest newspaper investment owners have increased over the past five years.
- Only 17% of local news stories in a community are actually local, meaning they're about or having taken place within a municipality, per a study from Duke earlier this year.
- While more people say they are willing to pay for news, those with higher levels of education are more likely to do so, per a study from the American Press Institute.
Between the lines: Benson says finding ways to create a plurality in types of news ownership will help to decrease a growing information gap in the U.S.
- "You could have 20 outlets competing in a given market, but if they're all stock market traded and profit-driven above all else, they wouldn't actually provide that much diversity of news content."
- "You would probably be better off with just 10 outlets spread across a variety of ownership forms — including individual or family, nonprofit, and public (taxpayer-supported) ownership."
- Benson cites other Westernized countries that have less of an information gap because of widely-available publicly-funded broadcast television. Examples include the BBC in the U.K., SVT in Sweden or ZDF/ARD in Germany.
- The U.S. has public broadcast, but it's mostly funded by high-end donors, not taxpayer dollars. As a result, its audience share is significantly less than public media in Western Europe.
The bottom line: There's a real news and information divide between rural and urban/suburban communities as well as between the poor and rich in the United States. Consolidation and the rise of paywalls could make it worse.
Go deeper: We break down these trends in our deep dive on the Digital Divide.
