OVERVIEW INTRODUCTION
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 www.pewresearch.org/pewresearch-org/journalism.)
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 www.pewresearch.org/pewresearch-org/journalism. 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 www.pewresearch.org/pewresearch-org/journalism.
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.
