Yahoo Finance's Editor in Chief Andy Serwer breaks down the impact the coronavirus crisis is having on the overall media landscape. He says subscriptions are "the holy grail" during this time.
ALEXIS: Well, it is not just small businesses that are feeling the brunt of this shutdown. The media is also getting hit pretty hard with layoffs and furloughs there from a number of news organizations both large and small. Our editor-in-chief Andy Serwer is joining us now. And Andy, good morning. I know you wrote about this issue over the weekend. And you point out, ironically, that media companies are hurting at the very time we actually need news and information possibly more than ever.
ANDY SERWER: Yeah, that's right, Alexis. And not only do we need news and information more than ever, but many of us are turning to these news organizations to get information. So in other words, traffic to websites and on regular television and even traditional newspapers is soaring. It's sky high. But at the same time, advertising is plunging.
And that's because advertisers don't want to put their ads up next to stories about coronavirus. And you see this historically. This is what happened in the wake of 9/11, that even though people were turning to TV and the web sites to find out what was going on, advertisers pulled their ads because they just didn't like it up next to those images.
So while the traffic is up, the ads are down, meaning the businesses are doing poorly. And that is the case across the board, except for a very select few of the most profitable, the biggest news organizations, like the Wall Street Journal, Dow Jones, NBC, and companies like that. And so news organizations have been laying people off, furloughing workers, cutting salaries.
BRIAN: Andy, what about some of these alternative revenue streams for media, whether it's subscription or even the conference business? The past five years, we've seen an explosion in conference businesses. What happens to that?
ANDY SERWER: Yeah, it's interesting. I mean, first of all, just to dig deep into-- get into the advertising business a little bit more and then I can pivot back to what you were saying about the other sources of revenue-- you would think that, you know, digital advertising might be better because the customers are there. But in fact, digital is down more than traditional newspapers, Brian. And that's because advertisers can pull their ads immediately from digital, where it's harder to do that with TV or newspapers because you got longer programs you're committed to.
But getting back to your question about other sources of revenue, conferences, which have been a big deal for a lot of news organizations, are now over. I mean, they're just not happening at all obviously. So that source of revenue has completely dried up.
My old employer, Fortune magazine, used to get a lot of revenue that way. And those conferences are not happening for the time being. And they did some layoffs.
The real holy grail here, Brian, is subscriptions. And that's what news organizations, smart ones, they've been moving towards increasingly. You have seen the New York Times doing that, the Wall Street Journal.
And there's sort of two sources. One is a paywall. And the other is having consumers pay directly, say, for newsletters.
It's consumers paying directly for news. That's actually what's been saving news organizations. The ones that have been able to do that, that's been the saving grace.
ALEXIS: Yeah, you know, Andy, what I have noticed though, is some places that would charge you to look at their news, they're actually waiving that now, saying, you know, we believe that information is more critical now than ever. We want you to be able to have it. And pay shouldn't-- shouldn't be an issue. But I also want to bring up with you what's happening in Australia--
ANDY SERWER: Right.
ALEXIS: Because the government there is telling Facebook and Google they have to pay media companies for news content there. If we saw something like that happen here, could that possibly save some of these media companies?
ANDY SERWER: Yeah, interesting. Just a quick point about the coronavirus content being free on the paywall at sites-- and the New York Times, which has a paywall now, they're putting their coronavirus up for free. It's seen as a public service, number one. And number two, of course, it's a good way to get new audiences. So you kind of get a double whammy there.
But getting back to your point about the news this morning we're seeing coming out of Australia, which is the Australian government saying that they're going to be making Google and Facebook pay for content, and the companies Google and Facebook have responded and said, well, they're not too happy about that. I mean, we've seen this before in some other countries like Spain. And Spain told Google they were going to make them pay, have them pay for content.
And Google simply pulled out of Spain in terms of their news feed. So you can do a search in Spain. But there's no news, no Google News there.
So this could be a solution. I think it would be very hard for the United States, again, in the business of doing this. But I think that there are going to be regulators in America looking very, very closely at this.
And by the way, this thing that's happening in Australia, with them making Google and Facebook pay, which would take one of two forms, either direct payments or revenue share off of revenue that comes from the ad, that comes from news stories on their sites, this is a very real deal. This comes from the highest levels of the Australian government. So Facebook and Google need to take this very seriously.
ALEXIS: Yeah, I'd say, and see if other governments use that as a blueprint. Andy Serwer, thanks as always.
ANDY SERWER: Thank you.