By several measures, the state of the American news media improved in 2010.

After two dreadful years, most sectors of the industry saw revenue begin to recover. With some notable exceptions, cutbacks in newsrooms eased. And while still more talk than action, some experiments with new revenue models began to show signs of blossoming.

Among the major sectors, only newspapers suffered continued revenue declines last year — an unmistakable sign that the structural economic problems facing newspapers are more severe than those of other media. When the final tallies are in, we estimate 1,000 to 1,500 more newsroom jobs will have been lost — meaning newspaper newsrooms are 30% smaller than in 2000.

Beneath all this, however, a more fundamental challenge to journalism became clearer in the last year. The biggest issue ahead may not be lack of audience or even lack of new revenue experiments. It may be that in the digital realm the news industry is no longer in control of its own future.

News organizations — old and new — still produce most of the content audiences consume. But each technological advance has added a new layer of complexity — and a new set of players — in connecting that content to consumers and advertisers.

In the digital space, the organizations that produce the news increasingly rely on independent networks to sell their ads. They depend on aggregators (such as Google) and social networks (such as Facebook) to bring them a substantial portion of their audience. And now, as news consumption becomes more mobile, news companies must follow the rules of device makers (such as Apple) and software developers (Google again) to deliver their content. Each new platform often requires a new software program. And the new players take a share of the revenue and in many cases also control the audience data.

Those data may be the most important commodity of all. In a media world where consumers decide what news they want to get and how they want to get it, the future will belong to those who understand the public’s changing behavior and can target content and advertising to snugly fit the interests of each user. That knowledge — and the expertise in gathering it — increasingly resides with technology companies outside journalism.

In the 20th century, the news media thrived by being the intermediary others needed to reach customers. In the 21st, increasingly there is a new intermediary: Software programmers, content aggregators and device makers control access to the public. The news industry, late to adapt and culturally more tied to content creation than engineering, finds itself more a follower than a leader in shaping its business.

Meanwhile, the pace of change continues to accelerate. Mobile has already become an important factor in news. A new survey released with this year’s report, produced with the Pew Internet & American Life Project, in association with the Knight Foundation, finds that nearly half of all Americans (47%) now get some form of local news on a mobile device. What they turn to most there is news that serves immediate needs — weather, information about restaurants and other local businesses, and traffic. And the move to mobile is only likely to grow. By January 2011, 7% of Americans reported owning some kind of electronic tablet. That was nearly double the number just four months earlier.

The migration to the web also continued to gather speed. In 2010, every news platform saw audiences either stall or decline — except for the internet. Cable news, one of the growth sectors of the last decade, is now shrinking, too. For the first time in at least a dozen years, the median audience declined at all three cable news channels.

For the first time, too, more people said they got news from the web than newspapers. The internet now trails only television among American adults as a destination for news, and the trend line shows the gap closing. Financially the tipping point also has come. When the final tally is in, online ad revenue in 2010 is projected to surpass print newspaper ad revenue for the first time. The problem for news is that by far the largest share of that online ad revenue goes to non-news sources, particularly to aggregators.

In the past, much of the experimentation in new journalism occurred locally, often financed by charitable grants, usually at small scale. Larger national online-only news organizations focused more on aggregation than original reporting. In 2010, however, some of the biggest new media institutions began to develop original newsgathering in a significant way. Yahoo! added several dozen reporters across news, sports and finance. AOL had 900 journalists, 500 of them at its local Patch news operation. By the end of 2011, Bloomberg expects to have 150 journalists and analysts for its new Washington operation, Bloomberg Government. News Corp. has hired from 100 to 150, depending on the press reports, for its new tablet newspaper, The Daily, though not all may be journalists. Together these hires come close to matching the jobs that we estimate were lost in newspapers in 2010, the first time we have seen this kind of substitution.

A report in this year’s study also finds that new community media sites are beginning to put as much energy into securing new revenue streams — and refining audiences to do so — as creating content. Many also say they are doing more to curate user content.

Traditional newsrooms, meanwhile, are different places than they were before the recession. They are smaller, their aspirations have narrowed and their journalists are stretched thinner. But their leaders also say they are more adaptive, younger and more engaged in multimedia presentation, aggregation, blogging and user content. In some ways, new media and old, slowly and sometimes grudgingly, are coming to resemble each other.

The result is a news ecology full of experimentation and excitement, but also one that is uneven, has uncertain financial underpinning and some clear holes in coverage. Even in Seattle, one of the most vibrant places for new media, “some vitally important stories are less likely to be covered,” said Diane Douglas who runs a local civic group and considers the decentralization of media voices a healthy change. “It’s very frightening to think of those gaps and all the more insidious because you don’t know what you don’t know.” Some also worry that with lower pay, more demands for speed, less training, and more volunteer work, there is a general devaluing and even what scholar Robert Picard has called a “de-skilling” of the profession.

Among the features in this, the eighth edition of the State of the News Media produced by the Pew Research Center’s Project for Excellence in Journalism, is a report on how American newspapers fare relative to those in other countries, two reports on the status of community media, a survey on mobile and paid content in local news, and a report on African American media. The chapters this year have also been reorganized and streamlined: each is made up now of a Summary Essay and a longer, separate Data Section where all the statistical information is more easily searchable and interactive.

Read the full report at journalism.org.

What now?

Inside news companies, the most immediate concern is how much revenue lost in the recession the industry will regain as the economy improves.

Whatever the answers, the future of news ultimately rests on more long-term concerns: What are the prospects for alternative journalism organizations that are forming around the country? Will traditional media adapt and innovate amid continuing pressures to thin their ranks?

And with growing evidence that conventional advertising online will never sustain the industry, what progress is being made to find new revenue for financing the gathering and reporting of news?

The numbers for 2009 reveal just how urgent these questions are becoming. Newspapers, including online, saw ad revenue fall 26% during the year, which brings the total loss over the last three years to 43%.

Local television ad revenue fell 22% in 2009; triple the decline the year before. Radio also was off 22%. Magazine ad revenue dropped 17%, network TV 8% (and news alone probably more). Online ad revenue overall fell about 5%, and revenue to news sites most likely also fared much worse.

Only cable news among the commercial news sectors did not suffer declining revenue last year.

The estimates for what happens after the economy rebounds vary and even then are only guesses. The market research and investment banking firm Veronis Suhler Stevenson projects that by 2013, after the economic recovery, three elements of old media — newspapers, radio and magazines — will take in 41% less in ad revenues than they did in 2006.

(Who owns the news media? View an interactive database of companies that own news properties in the United States at journalism.org.)

For newspapers, which still provide the largest share of reportorial journalism in the United States, the metaphor that comes to mind is sand in an hourglass. The shrinking money left in print, which still provides 90% of the industry’s funds, is the amount of time left to invent new revenue models online. The industry must find a new model before that money runs out.

The losses are already enormous. To quantify the impact, with colleague Rick Edmonds of the Poynter Institute, we estimate that the newspaper industry has lost $1.6 billion in annual reporting and editing capacity since 2000, or roughly 30%. That leaves an estimated $4.4 billion remaining. Even if the economy improves we predict more cuts in 2010.

Network news division resources are likely down from their peak in the late 1980s by more than half — which amounts to hundreds of millions of dollars — and new rounds of cuts came in the last 12 months. Local television is harder to gauge, but one estimate puts the losses in the last two years at over 1,600 jobs, or roughly 6%. Staffing at the news magazines Time and Newsweek since 1983 is down by 47%.²

So what about the new media experiments growing around the country? There are certainly exciting things happening, from former journalists creating specialty news sites and community sites, to citizens covering neighborhoods, local blogs and social media.

In 2009, Twitter and other social media emerged as powerful tools for disseminating information and mobilizing citizens for purposes such as evading the censors in Iran and communicating from the earthquake disaster zone in Haiti. The majority of internet users (59%) now use some kind of social media, including Twitter, blogging and networking sites, according to a new PEJ/Pew Internet & American Life survey.

Citizen journalism at the local level is expanding rapidly and brimming with innovation. This year’s report includes a new study of 60 of the most highly regarded sites. The prospects for assembling sufficient economies of scale, audience and authority may be most promising at specialized national and international sites — efforts like ProPublica, Kaiser Health News and Global Post.

For all the invention and energy, however, the scale of these new efforts still amounts to a small fraction of what has been lost. While not all of the blogs and citizen efforts can be quantified, J-Lab, a project led by Jan Schaffer that studies new media, estimates that roughly $141 million of nonprofit money has flowed into new media efforts over the last four years (not including public broadcasting). That is less than one-tenth of the losses in newspaper resources alone.

Michael Schudson, the sociologist of journalism at Columbia University, sees the promise of “a better array of public informational resources emerging.” This new ecosystem will include different “styles” of journalism, a mix of professional and amateur approaches and different economic models — commercial, nonprofit, public and “university-fueled.”

Clay Shirky of New York University has suggested that the loss of news people is a predictable and perhaps temporary gap in the process of creative destruction. “The old stuff gets broken faster than the new stuff is put in its place,” he has written.

There is something important in these notions. As Schudson notes, the news industry became more professional, skeptical and ethical beginning in the 1960s. Many journalists think that sense of public good has been overtaken by a focus on efficiency and profit since the 1990s. However, some of the new initiatives have re-invigorated the journalism mission of public interest and have helped to connect people within the community more.

(Explore and answer questions about media coverage in 2009 with PEJ’s News Interactive at journalism.org. The data are based on more than 68,700 stories analyzed in PEJ’s News Coverage Index for the year.)

Yet the energy and promise here cannot escape the question of resources. Unless some system of financing the production of content is developed, it is difficult to see how reportorial journalism will not continue to shrink, regardless of the potential tools offered by technology.

And as we enter 2010 there is little evidence that journalism online has found a sustaining revenue model. A new survey on online economics, released in this report for the first time, finds that 79% of online news consumers say they rarely if ever have clicked on an online ad.

There was certainly more talk of alternative approaches to advertising in the last year. Entrepreneur Steve Brill and others launched JournalismOnline.com, which offers news sites a mechanism for charging, but at this point it is more a possibility than a business reality. Rupert Murdoch announced discussions with Microsoft about higher payments for searching his content and insisted that everything his company produces would go behind pay walls. Columbia University produced a report that explored nonprofit and public funding sourcing and assessed the state of start up new media. The New York Times announced it was giving itself a year to figure out a way to charge for content to “get it really really right.” And more new media startups were planned, a growing sign that as old media continues to shrink, the ecosystem is changing and some things are growing.

But if a new model is to be found it is hardly clear what it will be. Our survey, produced with the Pew Internet & American Life Project, finds that only about a third of Americans (35%) have a news destination online they would call a “favorite,” and even among these users only 19% said they would continue to visit if that site put up a pay-wall.

In the meantime, perhaps one concept identifies most clearly what is going on in journalism: Most news organizations — new or old — are becoming niche operations, more specific in focus, brand and appeal and narrower, necessarily, in ambition.

Old media are trying to imagine the new smaller newsroom of the future in the relic of their old ones. New media are imagining the new newsroom from a blank slate and news ecosystem.

Among the critical questions all this will pose: Is there some collaborative model that would allow citizens and journalists to have the best of both worlds and add more capacity here? What ethical values about news will settle in at these sites? Will legacy and new media continue to cooperate more, sharing stories and pooling resources, and if they do, how can one operation vouch for the fairness and accuracy of something they did not produce?

The year ahead will not settle any of these. But the urgency of these questions will become more pronounced. And ultimately the players may be quite different.

“I think the answer may come from places staffed by young people who understand the new technology and its potential and who have a passion for journalism,” said Larry Jinks, the highly regarded former editor and publisher who transformed the San Jose Mercury News a generation ago and who still sits on the board of the McClatchy Company.

Major Trends

In past years we have tried to identify major trends emerging in the coming year, and many of those still apply now. For 2010, we want to emphasize six points.

As we learn more about both Web economics and consumer behavior, the unbundling of news seems increasingly central to journalism’s future. The old model of journalism involved news organizations taking revenue from one social transaction — the selling of real estate, cars and groceries or job hunting, for example — and using it to monitor civic life — covering city councils and zoning commissions and conducting watchdog investigations. Editors assembled a wide range of news, but the popularity of each story was subordinate to the value, and the aggregate audience, of the whole. And the value of the story might be found in its consequence rather than its popularity. That model is breaking down. Online, it is becoming increasingly clear, consumers are not seeking out news organizations for their full news agenda. They are hunting the news by topic and by event and grazing across multiple outlets. This is changing both the finances and the culture of newsrooms. When revenue is more closely tied to each story, what is the rationale for covering civic news that is consequential but has only limited interest? The data also are beginning to show a shift away from interest in local news toward more national and international topics as people have more access to such information, which may have other effects on local dynamics.

The future of new and old media are more tied together than some may think. A new multi-university study released in this report finds that even the best new-media sites in the country still have limited ability to produce content. No doubt they will evolve. Yet their reportorial capacity ultimately will still depend on finding a revenue model far larger than what exists today or is projected to come from conventional online advertising. While there are some competing values and different reportorial cultures, in the end new and old media face the same dilemma and may be much more aligned in their search for revenue than many have thought. In some cases, there will be formal alliances or networks of new and old media. One concept that will get more attention is collaborations of old media and citizens in what some call a “pro-am” (professional and amateur) model for news. Yet how traditional news organizations cope with such partnerships, the rules for what is acceptable and what is not, remain largely uncharted.

The notion that the news media are shrinking is mistaken. Reportorial journalism is getting smaller, but the commentary and discussion aspect of media, which adds analysis, passion and agenda shaping, is growing — in cable, radio, social media, blogs and elsewhere. For all the robust activity there, however, the numbers still suggest that these new media are largely filled with debate dependent on the shrinking base of reporting that began in the old media. Our ongoing analysis of more than a million blogs and social media sites, for instance, finds that 80% of the links are to U.S. legacy media. The only old media sector with growing audience numbers is cable, a place where the lion’s share of resources are spent on opinionated hosts. One result may be the rising numbers in polling data that show 71% of Americans now feel most news sources are biased in their coverage and 70% feel overwhelmed rather than informed by the amount of news and information they see. Quantitatively, argument rather than expanding information makes up the growing share of media people are exposed to today.

Technology is further shifting power to newsmakers, and the newest way is through their ability to control the initial account of events. For now at least, digital technology is shifting more emphasis and resources toward breaking news. Shrinking newsrooms are asking their remaining ranks to produce first accounts more quickly and feed multiple platforms. This is focusing more time on disseminating information and somewhat less on gathering it, making news people more reactive and less pro-active. It is also leading to a phenomenon in which the first accounts from newsmakers — their press conferences and press releases — make their way to the public often in a less vetted form, sometimes close to verbatim. Those first accounts, sculpted by official sources, then can spread more rapidly and widely now through the power of the Web to disseminate, gaining a velocity they once lacked. That is followed quickly by commentary. What is squeezed is the supplemental reporting that would unearth more facts and context about events. We saw this clearly in our study of news in Baltimore, but it is reinforced in discussions with news people. While technology makes it easier for citizens to participate, it is also making giving newsmakers more influence over the first impression the public receives.

The ranks of self-interested information providers are now growing rapidly and news organizations must define their relationship to them. As newsrooms get smaller, the range of non-journalistic players entering the information and news field is growing rapidly. The ranks include companies, think tanks, activists, government and partisan activists. Some are institutions frustrated by the shrinking space in conventional media and the absence of knowledgeable specialists to cover their subjects. Others are partisans and political interests trying to exploit a perceived opportunity in journalism’s contraction. There are varying degrees of transparency about the financing and intentions of these efforts. Some are quite clear. Others present themselves as purely journalistic and independent when in fact they are funded by political activists, yet only by digging and cross-referencing websites can the agenda and financing be divined. In an age where linking and aggregation are part of journalism, news organizations must decide how they want to interact with this growing cohort of self-interested information players. Will they pick up this material and disseminate it? Can they possibly police it? Can they afford to ignore it? The only certainty is that these new players are increasingly vying for the public’s and the media’s attention, and their resources, in contrast to that of traditional independent journalism, are growing.

When it comes to audience numbers online, traditional media content still prevails, which means the cutbacks in old media heavily impact what the public is learning through the new. An analysis in this year’s report of online audience behavior, extrapolated from Nielsen Net Ratings data, finds that 80% of the traffic to news and information sites is concentrated at the top 7% of sites. The vast majority of the top news sites (67%), moreover, are still tied to legacy media financed largely by their shrinking end of the business.³ New media are growing, but their ranks among the most trafficked sites are still small. Another 13% of these news sites are aggregators, whose content is derived from legacy media. Only 14% of these sites are online-only operations that produce mostly original reportorial content rather than commentary. In short, the cutbacks in old media are not only drastically affecting traditional media but significantly impact online content as well.

SECTOR HIGHLIGHTS

NEWSPAPERS

Newspapers are not disappearing in droves. Only half a dozen of any size went out of business or cut back print publication last year and most of those were second papers in their market. But newspapers have seen ad revenues fall by nearly half in three years, staff cutbacks are dramatic, if not quite as large, and a coming issue now is that papers are at risk of becoming insubstantial, lacking the heft to be tossed up on the front porch or to satisfy those readers still willing to pay for a good print newspaper.

ONLINE

The state of online news heading into 2010 may best be described as a moving target. Digital delivery is now well established as a part of most Americans’ daily news consumption. Six-in-ten Americans get some news online in a typical day — and most of these also get news from other media platforms as well.

NETWORK TV

As 2009 began, viewership of the evening newscasts actually rose for three months straight, but more declines quickly followed. What is occurring in network evening news is erosion, not a collapse. And there are new worries about the networks’ morning news programs. For years after evening numbers began to fall, morning shows were a bright spot. That is now changed. In 2009 morning news audiences fell for the fifth straight year. We estimate that network news staffs had already been cut by roughly half from their peak in the 1980s.

CABLE TV

Cable news in 2009, in nearly every indicator, was more robust than the previous year. Much of this growth was on the back of Fox News Channel, which offset some struggles at CNN and MSNBC. Ideology and opinion, now a centerpiece of the medium, was a key factor in that growth equation.

LOCAL TV

Almost all the indicators for local TV are pointing down. Audiences continue to fall for newscasts across all timeslots. Revenue, too, was in a free fall. Looking ahead, most market analysts project revenues to grow only slightly, but that is hardly taken as good news given that it is a year that includes both the midterm elections and winter Olympic Games. Stations may be nearing a point where they can no longer add new newscasts or new revenue opportunities, such as sponsored segments, to their old ones.

MAGAZINES

In a tough year for magazines, news magazines were especially hard hit despite efforts by some to re-invent themselves. Newsweek announced it would focus on analysis, rather than news, and U.S. News & World Report converted to a subject-specific monthly. Both lost readers in droves. The biggest winners were British: The Economist gained circulation, again, and The Week gained in ad pages.

AUDIO

The dynamics impacting audio’s future are clearer with each year. Most people still listen to news, talk and music for at least a little while every week, and they do most of this listening through traditional broadcast, or “terrestrial” radio. This is where the audience is largest. Yet this is where the profit and revenue are under the most pressure. Many stations have left the air and some owners of multiple stations have entered bankruptcy.

ETHNIC

In a year that saw the inauguration of the country’s first black president and the arrival on the Supreme Court of the first Hispanic justice, the ethnic news media managed to stay in relatively good health, despite the worst recession since the Great Depression. Some segments fared noticeably better than their mainstream counterparts, but there were areas of trouble. Perhaps more than anything else, 2009 spoke to both the unique appeal and particular fragility of media outlets that appeal to specific ethnic groups.

Find detailed analysis of audience trends, economics and news investment for each sector by reading the full report at journalism.org.

<sub>1. Cable figures are based on estimated combined ad revenues for CNN/HLN, Fox News Channel and MSNBC for 2008 and 2009, provided by SNL Kagan, a division of SNL Financial LLC. Online figures are total online display ad revenues, from January to September 2009, compared with the same period in 2008, provided by eMarketer. Network figures are based on revenue estimates for network television ads from January to September 2009, compared with the same period in 2008, provided by the Television Bureau of Advertising. Radio figures are based on AM/FM advertising revenues from January 2009 to January 2010, compared with the same period in 2008-2009, provided by the Radio Advertising Bureau. Magazine figures are based on ad pages sold – not revenue – provided by the Publishers Information Bureau for six news magazines: Time, Newsweek, The Economist, The Atlantic, The Week, and The New Yorker. Newspaper estimates are derived by Rick Edmonds of the Poynter Institute based on data provided by the National Newspaper Association. Local TV figures are based on revenue estimates for local and national spot advertising on local TV from January to September 2009, compared with the same period in 2008, provided by the Television Bureau of Advertising.
2. These figures, derived from analysis of staff boxes, show staffing at the two magazines of 710 in 1983 down to 373 in 2009.
3. The top news sites among Nielsen’s list of 4,600 are those sites with 500,000 unique visitors monthly, or the top 199 sites after government, consulting and database sites that do not produce news are culled from the list. The first reference includes all 4,600 sites on Nielsen’s list, which includes some government, consulting and databases that are not news.</sub>

The state of the American news media in 2008 is more troubled than it was a year ago. And the problems, increasingly, appear to be different than many experts have predicted.

Critics have tended to see technology democratizing the media and traditional journalism in decline. Audiences, they say, are fragmenting across new information sources, breaking the grip of media elites. Some people even advocate the notion of “The Long Tail,” the idea that, with the Web’s infinite potential for depth, millions of niche markets could be bigger than the old mass market dominated by large companies and producers.

The reality appears increasingly more complex. Looking closely, a clear case for democratization is harder to make. Even with so many new sources, more people now consume what old media newsrooms produce, particularly from print, than before. Online, for instance, the top 10 news Web sites, drawing mostly from old brands, are more of an oligarchy, commanding a larger share of audience, than in the legacy media. The verdict on citizen media for now suggests limitations. And research shows blogs and public affairs Web sites attract a smaller audience than expected and are produced by people with even more elite backgrounds than journalists.

Certainly consumers have different expectations of the press and want a changed product.

But more and more it appears the biggest problem facing traditional media has less to do with where people get information than how to pay for it — the emerging reality that advertising isn’t migrating online with the consumer. The crisis in journalism, in other words, may not strictly be loss of audience. It may, more fundamentally, be the decoupling of news and advertising.

This more nuanced recognition is also putting into clearer relief what news people see as their basic challenge: Somehow they must reinvent their profession and their business model at the same time they are cutting back on their reporting and resources. “It’s like changing the oil in your car while you’re driving down the freeway,” said Howard Weaver, the chief news executive of the McClatchy Company.

In broad terms, the fundamental trends transforming how people acquire news continued in the last year. More effort keeps shifting toward processing information and away from original reporting. Fewer people are being asked to do more, and the era of reporters operating in multimedia has finally arrived. In newspapers, and to lesser extent in network television, an expanding list of buyouts and layoffs in 2007 was expected to grow further in 2008 — in some cases even at online organizations.

The pressure points vary by news sector. In print, the problem is vanishing advertising, particularly classified. Were it not for that one sector, newspapers’ problems would be comparatively modest. In television, where problems with audience are more acute, the industry is being sustained by the fact that still nothing compares to the persuasiveness of television advertising. Online, the problem is that the revenue model is in search, not conventional advertising — and journalism sites are now already lagging behind other internet sectors financially.

Despite all this, those who remain in the newsroom, particularly in print, evince a stubborn optimism — a sense of mission to prove what they consider a calling still has resonance and, in time, will find financial footing. Certainly there is skepticism on Wall Street, from the public, in some cases from owners. Yet experimentation is proving liberating, even if some experiments make news people queasy. News organizations, or at least some, have become places of risk and innovation and feel growing connection with audiences, something we could not have said a few years ago.

Read the full State of the Media 2008 report.

This new phenomenon is exemplified by cable news, which had been growing for a decade, but is now suffering audience declines. Cable’s “Argument Culture” is giving way to something new: the Answer Culture, a growing pattern that has news outlets, programs and journalists offering up solutions, certainty and the impression of putting all the blur of information in clear order for people.

“Trends that we have been tracking now for four years are reaching a pivot point,” PEJ Director Tom Rosenstiel said. “Only one media sector, the ethnic press, is still growing, and every measurement for audience — even page views and visitors — is now being questioned. Things are now moving faster than companies can even recognize. Mainstream news media are adapting, in part, by focusing on specialties. In a sense, every outlet is becoming more of a niche player with reduced ambitions.”

That does not mean that journalism is dying. There is more reason now than a few years ago to believe that the old newsrooms of America are most likely to be the successful newsrooms of the future. But the report also cautions that the consequences of the overall trend toward niche branding remain unclear.

“Hyper localism,” a favorite term on Wall Street, can be market speak for simple cost-cutting. Branding can be a mask for bias. Pursued mindlessly, the franchise approach could also spell the death of a big city metro paper. The character of the next era will likely depend heavily on the quality of leadership in the newsroom and boardroom, the report concludes.

The 2007 report includes a special content analysis of digital journalism, which systematically examines the nature and character of more than three dozen websites offering news and information in a variety of styles. Among other findings, the online analysis concludes that while journalists are becoming more serious about the Web, no clear models of how to do journalism online exist yet, and some qualities are still only marginally explored. Characteristics such as immediacy and customizability, for instance, have been developed much more than others, such as depth or the use of multimedia.

As with past annual reports, the 2007 study offers detailed chapters on nine different sectors of the press—newspapers, magazines, network television, cable news, local TV, the Internet (including blogs), radio, the ethnic press and alternative media. For each sector, the report collects all available information on six different areas: audience, economics, ownership, newsroom investment, and public attitudes.

Key findings include:

<ul >

• Evidence is mounting that the news industry must become more aggressive about developing a new economic model. One increasingly possible scenario is that news providers, instead of charging the consumer directly, charge Internet providers and aggregators licensing fees for content. News organizations may have to create consortiums to make this happen. And those fees would likely add to the bills consumers pay for Internet access. But the notion that the Internet is free is already false. Those who report the news just aren’t sharing in the fees.
• A key question is whether the investment community sees the news business as a declining industry or an emerging one in transition. If one believes that the economics of news are now broken, then it seems inevitable that the investment in newsrooms will continue to shrink and the quality of journalism in America will decline. If one believes that news will continue to be the primary public square where people gather and that, consequently, the economics will sort themselves out in time, then a different strategy is needed. But if news companies wait for the proof rather than act on their own vision, their business will likely be smaller and less robust.
• Blogging is on the brink of a new phase that will probably include scandal, profitability for a few, and a splintering into elites and non-elites over standards and ethics. The most recent example of this new professionalizing was the Scooter Libby trial, which bloggers covered using official press credentials lobbied for and won by the Media Bloggers Association. Corporate public-relations efforts are beginning to use blogs as well, often covertly. At the same time, some of the most popular bloggers are already becoming businesses or being assimilated by establishment media.
• There are growing questions about whether the dominant ownership model of the last generation, the public corporation, is suited to the transition newsrooms must now make. Private markets now appear to value media properties more highly than Wall Street does. What is unknown is whether these potential new private owners are motivated by public interest, a vision of growth online, having a high-profile hobby (like a sports team), or as an investment to be flipped for profit after aggressive cost-cutting. Public ownership tends to make companies play by the same rules. Private ownership has few such leveling influences.
• What author Michael Crichton once called the “Crossfire Syndrome,” appears to be evolving into something new. Crossfire, the iconic program of the Argument Culture, has been canceled, and cable’s new symbols are liberal-leaning Keith Olbermann and conservative-leaning Bill O’Reilly. The tone may be just as intense as before, but rather than an equal debate of two sides, the hosts have already made up their minds. The Answer Culture in journalism, which is part of the new branding, represents an appeal more idiosyncratic and less ideological than pure partisan journalism.

“The problems of newspapers appear to be the most acute at the moment,” Rosenstiel said. “After a traumatic year in 2005, circulation and job losses were almost as bad in 2006 and the industry saw earnings fall for the first time in memory in a non-recession year. But other industries are also troubled. Cable news is now seeing its audience decline, led by the biggest drops at Fox.”

Read the full report, including detailed charts, graphs and citations at www.stateofthemedia.org.

The three big news magazines had a particularly rough 2005. Ad pages dropped at all of them, with Time and Newsweek witnessing double-digit percentage declines. Last year, circulation for Time and Newsweek was at its lowest point at any time in almost 20 years, while US News registered its second lowest circulation count in nearly two decades. Staffs were slashed as well. Time Inc. laid off 105 people from throughout the organization in 2005, including Time bureau chiefs in Moscow, Beijing, Seoul and Tokyo. US News also endured cuts that reached into the upper levels of the masthead.

But at the same time, magazines such as The Week and the London-based Economist have been experiencing rapid growth in US readership and advertising. This suggests that different editorial models can succeed in a difficult environment and that readers may be looking for creative variations on the traditional American news magazine approach.

In this Project for Excellence in Journalism roundtable discussion, magazine industry experts see change as not only inevitable, but essential if the publications are to continue to survive. But they disagree about just what those changes should entail.

The panelists for this roundtable are:

<ul >

• William Falk, Editor, The Week
• Samir Husni, Chairperson, University of Mississippi Journalism Department and author of Samir Husni’s Guide to New Magazines
• Daniel Okrent, former Editor, Time Inc. new media
• Victor Navasky, Chairman, Columbia Journalism Review, former Editor, The Nation

Read the full transcript

The death of the news weekly has been predicted for years, but somehow they’ve managed to survive. Does today’s news climate and the recent cutbacks at Time and U.S. News pose more of a real threat? What sort of future do you see for the weekly news magazine?

Okrent: The news magazines will have to change to survive, and I expect they’ll do so. The compression of the news cycle has placed breaking news in the hands of digital providers, compelling deeper analytical efforts by daily newspapers, and thus depriving the news weeklies of their traditional specialty. I wouldn’t be surprised to see them revert to what Henry Luce and Briton Hadden first imagined eight decades ago: something to break through the clutter.

Navasky: I see the news weeklies becoming more analytical, interpretive, and perhaps even opinionated.

Husni: I do not believe the recent cutbacks at the news titles are related to the news climate as much as to the content of those magazines. When you reach a stage in the midst of a country which is facing war, terrorism and political upheaval, and you have at least four cover stories in the last six months on teenagers and teenage boys and being 13, etc., you wonder “how were they able to maintain the level of circulation that they have?”

…Unless those weeklies go back to covering the news in its pure, journalistic-defined form, I don’t think the future will be great for them.

William Falk: Obviously, I’m biased, but I think the news magazine will remain an important facet of many people’s media consumption. News magazines provide big-picture perspective that daily products cannot; they help readers make sense of what they’ve already read about or experienced. There is also a sense of craft and polish about weekly magazines that provides an enjoyable reading experience.

Along the same lines, news magazines have done surprisingly little to create an existence on the web. What has been holding them back? Can their content, including pictures, transfer to the web?

Falk: That is changing, as all the news magazines (including The Week) beef up and diversify their web sites. For the next five or ten years, I think the sites will be function primarily to supplement and add web-friendly content such as blogs to the print products. After that, my crystal ball is very cloudy.

Okrent: The web asks for speed, and news weeklies are not built for speed. But I do see them investing more heavily in web efforts right now that take advantage of their distinctive voices.

Husni: I don’t think the premise is true. Time and Newsweek are very active on the web, very active in delivering their information to their subscribers a day before the print edition is out and very active in occasionally breaking news stories on their website before the printed edition. If they are guilty of one thing, they are guilty of not sending the readers back from the web to the printed edition. We have managed to create a one-way street from the printed edition to the web, with no way back.

Now, the question is, “can their content, including the pictures, transfer to the web?” Definitely it can, but again, for what reason?

Navasky: What has been holding the news weeklies back has been the assumption that their content should be “transferred” to the web. The secret is to create content appropriate to the new medium – interactive, Q&A’s, chat-rooms, maybe each magazine will create its own spin-off web-versions of “Meet the Press”.

Over the last two years niche news magazines like the New Yorker and the Economist and most recently The Week have seen strong growth in both circulation and ad revenue. How far can this growth go considering they are niche genres? What does this suggest about the magazine reader of the future?

Falk: Again, I’m biased, but I strongly believe that each of the three magazines can continue to grow.

At The Week, we have found that people are extremely enthusiastic about a magazine that filters and make sense of so much commentary and news. One measure of that is how our subscribers proselytize their friends. In the past year alone, readers have bought more than 100,000 gift subscriptions to friends and family members.

The New Yorker, the Economist, and The Week are very different publications, obviously, but what we have in common is that we help people make sense of news they’ve already heard. In an age in which we are all literally inundated with media, people are often overwhelmed and unsure what to read and what to think. That creates a demand for an intelligent, trustworthy guide like The Week.

Husni: This is the beauty of the magazine industry – there is something for everyone and, while The New Yorker continues to dwell on in-depth and the coverage of one big story at a time, The Week, on the other hand, provides you Cliff Notes of all that’s taking place, not to mention The Economist weighs in with their views and analysis for those of us who actually have the luxury of trying to understand the world beyond the outer crust of our planet.

What does this suggest about the magazine reader of the future? Simply stated, the magazine reader of the future is going to be the same as the magazine reader of today, as the magazine reader of yesterday, and as the magazine reader of tomorrow. The magazine reader will continue to search for the publication that will best meet their needs, wants and desires.

Okrent: It in fact suggests that the distinctive voices I cite in the answer to concerning creating an existence on the web will be the vehicles to lead news weeklies back into their previous prominence.

Navasky: Ad growth seems to me to say more about the consumer of the future than the reader of the future. And the term niche seems too vague an umbrella under which to lump the three you mention. Each of the magazines you cite is a case unto itself: I think The Atlantic’s move to Washington will contribute to a period of confusion rather than growth; The New Yorker is a quality-lit and entertainment magazine; The Week is the latest adaptation of the Reader’s Digest formula. In theory these latter two mags could attract an abundance of new advertising.

One broad trend we sense in the media culture is the paradox of more outlets covering fewer stories. As the audiences for particular news outlets shrink, newsroom resources are then reduced, but these outlets still feel compelled to cover the big events of the day. How do you view this trend?

Navasky: You ask how do I view this trend? With alarm. The reason is that although you refer to “more” outlets, they are owned by fewer and fewer, larger and larger corporations, which means a narrower range of perspectives. A hopeful countertrend: Small independents, such as the hundreds of periodicals represented by the San Francisco-based Independent Press Association.

Okrent: I’m not sure I agree with the premise. While this may the case at the apex of the media pyramid – i.e., the networks, the major news magazines, the national papers – the true expansion of media outlets is happening, and will be happening, at the base. I think we’re going to see this happening at the local level especially, and where there’s good local journalism, there will be stories that will be picked up and disseminated nationally.

Husni: Well, I hate to disagree from the outset with this premise, but it’s a little off on two fronts. One, that media outlets are covering fewer stories and, two, that everybody is covering the same big event of the day. If we really look at the daily newspapers and the more-than-daily websites, we see that there is a stream of information continuously converging toward the reader, packaged in different ways. It may give the appearance that there is less information or that it’s shorter, but, in reality, it’s the same old wolf, just now in sheep’s clothing.

I wish that the media outlets would cover more stories in depth and less with the barrage of information that we all see on a regular basis. I think that it’s only a figment of the imagination of the people in the media to believe that the same reader is going to jump from their newspaper to the website, to the television channel, to the radio to read scan, listen and view the same story. Wishful thinking at best.

As for the audience, I don’t believe it’s shrinking. The major news weeklies have maintained their circulation bases for years now, and the marketplace has added many more choices and options. Now, if we are going to define what we mean by news, that’s, of course, a completely different story. Because, what’s news for me and you is not news for Joe Smith and Sally Jane.

Falk: I am distressed by it. I think of this as the “O.J.” syndrome, perhaps because I was a reporter at Newsday at the time and saw first hand how much one story could consume a major news organization. It was during that case that this trend really became pronounced, and ever since then, TV, newspapers, and magazines seem to focus on one Big Story for months at a time.

I understand why editors who are worried about competition, circulation and ratings would succumb to the temptation to devote their resources to covering the same story or stories everyone else is covering. Nonetheless, it’s undermining both the validity and the appeal of traditional journalism. Obsessing over one story, even when there is hardly anything new to say, makes readers cynical about our claims to high motives. It also reduces the need for people to buy our publications, since they so rarely see anything truly original or surprising.

Traditional newspapers and magazines will survive, I think, only if they break stories, do investigative work, and prove to the public day in and day out that we’re their advocates.

Scan the headlines of 2005 and one question seems inevitable: Will we recall this as the year when journalism in print began to die?

The ominous announcements gathered steam as the year went on. The New York Times would cut nearly 60 people from its newsroom, the Los Angeles Times 85; Knight Ridder’s San Jose Mercury News cut 16%, the Philadelphia Inquirer 15% — and that after cutting another 15% only five years earlier. By November, investors frustrated by poor financial performance forced one of the most cost-conscious newspaper chains of all, Knight Ridder, to be put up for sale.

Adding to the worry, industry fundamentals, not the general economy, were the problem — declining circulation, pressure on revenues, stock prices for the year down 20%.

It wasn’t only newspapers, either. Magazines like Newsweek, U.S. News and Business Week were suffering, too. The largest company, Time Inc., advertising and circulation falling, cut 205 people and promised to transform itself from “magazine publishing” to a “multiplatform media company.” The former dean at the Columbia University Graduate School of Journalism, Tom Goldstein would conclude, “Unless they urgently respond to the changing environment, newspapers risk early extinction.”

Is it true? From here on will the delivery of news in ink on paper begin a rapid and accelerating decline? Newspapers are the country’s biggest newsgathering organizations in most towns and the Internet’s primary suppliers. What would their decline portend?

For two years, this report has tracked the major trends in the American news media (link to 2005 and 2004). What is occurring, we have concluded, is not the end of journalism that some have predicted. But we do see a seismic transformation in what and how people learn about the world around them. Power is moving away from journalists as gatekeepers over what the public knows. Citizens are assuming a more active role as assemblers, editors and even creators of their own news. Audiences are moving from old media such as television or newsprint to new media online. Journalists need to redefine their role and identify which of their core values they want to fight to preserve —something they have only begun to consider.

In 2005, change intensified. The shift by audiences to other delivery mediums accelerated print’s problems. Things that seemed futuristic two years ago, such as watching network news on a PDA, began to arrive. The role of new aggregators like Google grew. And new scandals in the old media seemed to confirm worries that some news people are more concerned with their careers than the public interest.

We believe some fears are overheated. For now, the evidence does not support the notion that newspapers have begun a sudden death spiral. The circulation declines and job cuts will probably tally at only about 3% for the year. The industry still posted profit margins of 20%. Measuring print and online together, the readership of many newspapers is higher than ever.

[And while the public continues to be troubled about the news media in some areas, including heightened concerns about bias, criticism of the military, and whether the news media really protect democracy, Americans have a more favorable view of the press generally and considers the news media more professional and moral than they did before September 11, 2001, or in aftermath of the impeachment of President Bill Clinton.]

On the other hand, the most sanguine reaction to all these changes — that they simply reflect an older medium’s giving way to a newer one, and that citizens will have more choices than ever — strikes us as glib, even naïve. Even if newspapers are not dying, they and other old media are constricting, and so, it appears, is the amount of resources dedicated to original newsgathering.

Most local radio stations, our content study this year finds, offer virtually nothing in the way of reporters in the field. On local TV news, fewer and fewer stories feature correspondents, and the range of topics that get full treatment is narrowing even more to crime and accidents, plus weather, traffic and sports. On the Web, the Internet-only sites that have tried to produce original content (among them Slate and Salon) have struggled financially, while those thriving financially rely almost entirely on the work of others. Among blogs, there is little of what journalists would call reporting (our study this year finds reporting in just 5% of postings). Even in bigger newsrooms, journalists report that specialization is eroding as more reporters are recast into generalists.

In some cities, the numbers alone tell the story. There are roughly half as many reporters covering metropolitan Philadelphia, for instance, as in 1980. The number of newspaper reporters there has fallen from 500 to 220. The pattern at the suburban papers around the city has been similar, though not as extreme. The local TV stations, with the exception of Fox, have cut back on traditional news coverage. The five AM radio stations that used to cover news have been reduced to two. As recently as 1990, the Philadelphia Inquirer had 46 reporters covering the city. Today it has 24.

In the future, we may well rely more on citizens to be sentinels for one another. No doubt that will expand the public forum and enrich the range of voices. Already people are experimenting with new ways to empower fellow citizens to gather and understand the news — whether it is soldiers blogging from Baghdad, a radio program on the war produced by students at Swarthmore College carrying eyewitness interviews with Iraqi citizens, or a similar effort by young radio reporters in Minnesota to cover local towns.

Yet the changes will probably also make it easier for power to move in the dark. And the open technology that allows citizens to speak will also help special interests, posing as something else, to influence or even sometimes overwhelm what the rest of us know. The worry is not the wondrous addition of citizen media, but the decline of full-time, professional monitoring of powerful institutions.

Those are just some of the questions and conclusions in this, the third of our annual reports on the state of American journalism. The study, which we believe is unique in depth and scope, breaks the news industry into nine sectors (newspapers, magazines, network television, cable television, local television, the Internet, radio, ethnic media, and alternative media) and builds off many of the findings from a year ago.

This year, the study also includes a distinct content report, A Day in the Life of the News, in which we examine one day’s events as they course through the media culture in print, television, radio, online, and blogs, magazines, both nationally and locally in three American cities.

Read the full report, including a more extensive version of this overview