As the world turned digital, people were quick to drop their Sunday papers and pick up their smartphones for news. Advertisers followed suit as digital platforms became more valuable real estate than print newspapers, leaving California news outlets desperate to find ways to stay profitable and relevant.

Supporters — including the California News Publishers Assn. and the Media Guild of the West which represents journalists at the Los Angeles Times — believe Assembly Bill 886, will give the industry a greatly needed boost by requiring online platforms like Google to pay news outlets when linking to their content. News outlets must spend at least 70% of the received funds on their staff.

A second bill being considered by California lawmakers, Senate Bill 1327, would charge Amazon, Meta and Google a “data extraction mitigation fee” for data they collect from users. The funds would go toward supporting local newsrooms.

California has lost one-third of its newspapers since 2005, according to a 2023 Northwestern Medill School of Journalism report. The number of journalists in the state has dropped 68% since then, and despite shifting efforts to digital, news outlets are struggling to attract readers and subscribers.

The Los Angeles Times cut more than 20% of its newsroom in January, representing one of the largest staff cuts in the newspaper’s 142-year history. Since L.A. Times owner Patrick Soon-Shiong sold the San Diego Union-Tribune to a hedge fund in July 2023, its staff has been cut by an estimated 30%. LAist is also facing “a significant budget shortfall” over the next two years and has offered voluntary buyouts to journalists ahead of a potential round of layoffs.

Americans are turning to social media for news, citing its convenience and speed. The share of Americans using social media for news increased from 27% in 2013 to 48% in 2024, according to the Reuters Institute for the Study of Journalism’s Digital News Report 2024.

But concerns about unreliable sources and misinformation have been growing. Four in 10 Americans who get news from social media say they dislike the inaccuracy, up from three in 10 in 2018, according to a 2023 Pew Research Center survey. After the 2016 presidential election, about a quarter of Americans said they shared fabricated news stories, knowingly or unknowingly.

As conspiracies and misinformation spread and exacerbate polarization, local newsrooms meant to hold officials accountable and keep community members well-informed are becoming fewer and farther between.

As the two bills make their way through the state Legislature, here’s what you need to know about California’s shrinking news industry and evolving media advertising scene.

Sunday circulation for some of the largest newspapers in California, including the Los Angeles Times, Orange County Register and San Diego Union-Tribune, has dropped at least 30% since 2015. The Fresno Bee has seen the largest percentage decrease in Sunday newspaper circulation, down 79% in just eight years. Its daily average of 110,400 papers in 2015 plummeted to 23,000 in 2023.

“There’s no mistaking that this is a brutal moment for journalistic employment,” Gabriel Kahn, USC professor of professional practice of journalism, said. “Jobs are shrinking, and local coverage is disappearing.”

The San Francisco Bay area saw the largest drop in journalism employment per 1,000 jobs in the state since 2009, according to U.S. Bureau of Labor Statistics data. In 2009, one out of 1,000 employed people worked as a journalist. In 2023, only a half of those jobs remain.

While the Bay Area saw a sharp decline in the number of journalists in the early 2010s, journalism employment has been inching back upward since 2015.

Kahn said the number of journalists in the Bay Area is dependent on the national relevance of Silicon Valley, which in recent years has consistently found headlines with topics like social media and artificial intelligence and tech figures like Elon Musk.

“Coverage about glitzy topics whether its celebrities in L.A., tech or politics … can gain national audiences, so there will always be demand for people to produce that kind of journalistic content,” he said. “Silicon Valley has always had ways to grow, and as they grow, journalists are added on to cover that surge.”

Journalism jobs continue to be concentrated in metropolitan hubs such as Los Angeles, San Francisco, San Diego, Sacramento and San Jose. The number of journalists in Los Angeles and Orange County increased 34% in the past decade while the number in San Jose and San Diego remained roughly unchanged.

The number of journalists in the state’s capital, however, notably plummeted 57% in the last decade. The Sacramento area saw the largest drop in total journalism employment since 2013.

McClatchy, the publisher of the Sacramento Bee and dozens of other news outlets across the country, filed for bankruptcy in 2020 and was acquired by a New Jersey hedge fund later that year. TV stations have also consolidated news coverage in Sacramento by doing the same with less, Kahn said.

“The truth is, this is still the place where a $300-billion budget gets approved [and] lots of business [gets] transacted,” he said. “I’m surprised there’s not more [coverage].”

As social media and search engines dominate the advertising business that once fueled the journalism industry, many California news outlets that have stuck to old business models are watching money go down the drain, Kahn said.

National digital advertising expenditures in California increased 54% since 2018 while print media advertising decreased 27%, according to Borrell Associates.

The most popular social media for California registered voters for election-related news is YouTube, followed by Facebook, Instagram, X and TikTok. And as more Americans experience news fatigue and turn to social media for news and comedic relief, news outlets continue to lose digital readership.

Ten major California news websites, including latimes.com, sfchronicle.com and ocregister.com, have seen at least a 35% drop in total unique visitors since January 2021.

The OC Register’s website saw one of the largest percentage decreases in the past three years at 72%.

Kahn attributed some of the digital readership loss to difficulties optimizing journalism content for search engines.

“One of the major woes that journalism is feeling is that their audience is dependent on Silicon Valley giants and their algorithms,” Kahn said.

A poll from the UC Berkeley Institute of Governmental Studies conducted from May 29 to June 4 found that California registered voters rely on Google and other search engines almost as much as newspapers and magazines to get news about election-related issues.

Digital advertising has become a major business for Google’s parent company, Alphabet, with revenue nearly quadrupling in the past decade. Google advertising, which includes Google search, YouTube ads and other networks, racked in an unprecedented $237.8 billion in 2023.

The U.S. Justice Department and eight states, including California, brought a landmark antitrust case against Google in 2023, accusing it of abusing its power to monopolize the digital advertising market.

“Any money falling into these [journalism] institutions is going to be positive, because they have basically been watching the water drain out of the bathtub for the past decade and a half,” Kahn said.

It’s no secret that Californians pay more than the rest of the country for many goods and services — gas, housing, food, you name it. That’s part of the high cost of living in this state.

What’s less well known, though, is that consumers may be paying higher prices than their neighbors pay.

Tech firms and consultants have been offering companies the ability to set “personalized” prices online based on a customer’s ability or willingness to pay, using algorithms and artificial intelligence to sift through mountains of data to help maximize sales and profits. Advocates say the technology simply takes the principle of efficient pricing to its logical extreme; critics say it’s unfair, discriminatory and a perversion of free-market capitalism.

On Tuesday, the Federal Trade Commission launched an investigation that aims to determine how widespread this kind of “surveillance pricing” has become and what its effects have been. The five commissioners voted unanimously to order eight financial, tech and consulting companies to reveal what pricing services they offer, what data they collect to power these services, who is using their services and what effect that’s having on consumer prices.

FTC Chief Technology Officer Stephanie Nguyen said in an interview that the agency knows companies “are collecting massive amounts of data about consumers,” including very detailed, sensitive data about their demographics, where they go, what they look for and what they buy. The agency also knows that companies are able to use these data to specifically target information to individuals or groups.

Its new inquiry, she said, aims to determine whether, how and how often such data are being deployed to set prices. She added that the agency is just gathering information at this point, and that none of the companies are being accused of any wrongdoing.

Privacy advocates welcomed the investigation.

“This study is such a critical first step in a really important conversation about what we think the rules should be around pricing — what we think the norm should be,” said Lindsay Owens, executive director of Groundwork Collaborative, an economic policy think tank.

Rather than setting prices based on supply and demand, surveillance pricing looks at indicators of your ability and willingness to pay, such as your credit card and bank balances, or “whether it’s late at night and you’re looking for an Uber home,” said Lee Hepner, senior legal counsel for the American Economic Liberties Project.

“We have heard allegations that some companies are now able to charge you a different price based on how close you are to your next payday, or if you just got paid,” he said.

The eight companies ordered to submit information to the FTC are financial industry titans Mastercard and JPMorgan Chase, consultancies Accenture and McKinsey & Co., and tech companies Revionics, Bloomreach, Task Software and PROS.

JPMorgan Chase said Tuesday that it hadn’t heard from the agency yet. Mastercard said it would cooperate in the process, and the other six companies did not respond to requests, or could not be reached, for comment.

The unanimous vote of the commission reflects a bipartisan interest in exploring the issues around pricing based on personal data, which in turn mirrors public sentiment about online privacy. A survey last year by the Pew Research Center found that 81% of respondents were concerned about how companies use the data collected about them, and 67% had little to no understanding about what companies did with their data.

One of the threats posed by surveillance pricing is that it gives companies an incentive to collect even more data about customers because the information might be useful in these pricing systems, said R.J. Cross, the director of the consumer privacy program at the U.S. Public Interest Research Group.

“The overcollection of data already comes with security and privacy issues,” she said; the more data that’s collected, the more likely it is that the information will be exposed in a breach or hack. “It’s just going to add fuel to a fire that may have big, negative consequences for all of us down the line.”

Owens said another issue is how surveillance prices erode the longstanding practice of having a public price, which emerged when retailers stopped haggling over everything and started putting price tags on their goods. Public prices are important, Owens said, because they help ensure fairness and are transparent and predictable.

The absence of predictable prices, Hepner said, makes it hard for people to budget for what they need.

George Slover, senior counsel for competition policy at the Center for Democracy & Technology, said “bespoke pricing” amounts to an extreme reversal of a system that has worked for consumers since the advent of the price tag. Instead of sellers offering goods and services to anonymous buyers, he said, “the seller knows everything about the buyer, and what they are likely, willing and able to pay” — while keeping the buyer in the dark about what the seller is charging everyone else.

“It inverts, or you might say perverts, the assumptions at the very foundation of the justification for the free market,” he said.

The use of AI to power surveillance pricing systems is a potential hurdle to the FTC’s inquiry, observers say, because the systems’ inner workings may be difficult to unpack and understand.

“It makes the job a lot harder if the people who are making the AI systems can’t even clearly articulate why a system is making a decision,” Cross said. “That really puts regulators at a disadvantage.”

The legal landscape is murky, too.

There are federal laws that prohibit charging discriminatory prices in certain circumstances — for example, when people are charged different rents or mortgage interest rates based on their race — but Hepner said surveillance pricing may represent “a new frontier in price discrimination” not reached by those statutes.

The FTC may have the power to rein in surveillance pricing, though, if the agency determines that it violates the federal law against unfair and deceptive practices. And in Owens’ view, it is by nature deceptive because it’s done in secret — you don’t know you’re paying more online than someone else for the same goods, so “you have no idea that you should be upset.”

“Isolation and obfuscation,” she added, “are really essential to the practice.”