Reinvigorating Local News through a Digital Advertising Tax
Date
2024-08
Authors
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Publisher
SNF Ithaca Initiative
Abstract
Independent local journalism is the backbone of a healthy democracy: it informs citizens, holds local leaders accountable, and fosters social cohesion. Local newspapers focusing on community matters help dilute political mega-identities and reduce polarization. Unfortunately, industry consolidation and the economics of social media have undermined local journalism's availability, focus, and democratic utility. Social media platforms, particularly Facebook, often emphasize national over local news and culture wars over public policy, neglecting crucial civic needs. Local news organizations have become increasingly "platform dependent," relying on social media for audience reach and adopting its logics to compete. Despite Meta's claims of "reinvigorating" local news through donations, internal memos from 2022 reveal a shift away from news towards videos and content creators. This shift has exacerbated misinformation and political divisiveness, as users' desire for community aligns with the dynamics of Facebook pages and groups. This white paper documents how social media, especially Meta, contributes to the decline of local journalism. It highlights the lack of financial transparency, allowing tech companies to promote their investments in local news without accountability. The paper proposes a digital advertising tax (DAT) on social media ads targeting users based on online data. The revenue would fund robust independent journalism through a non-profit consortium of local news organizations, researchers, non-profits, and funding entities. As journalism scholar Victor Pickard notes, "the journalism crisis is a policy problem." This paper outlines a policy approach to addressing it.
Description
Keywords
Local journalism, News, Social media, Advertising tax, Digital advertising tax, Public policy
Citation
Young, Dannagal G. 2024. Reinvigorating Local News Through a Digital Advertising Tax. SNF Ithaca Research Scholar White Paper. No. 2. Newark, DE. Stavros Niarchos Foundation (SNF) Ithaca Initiative.