State of the American News Media, 2007: Economic Challenges Usher In Era of the Niche For Mainstream Media

Contact: Tom Rosenstiel, 202.419.3650


Washington, DC - 03/12/2007 - For the first time in years, every sector of television news lost audience in 2006. And newspapers, despite garnering a larger audience than ever for their content via online platforms, faced more downbeat financial assessments. The shifting economic fundamentals are spurring mainstream news organizations to try to build audience around “franchise” areas of coverage, specialties and even crusades, according to a new report on the state of journalism in America, State of the News Media 2007, by the Project for Excellence in Journalism.

PEJ is a nonpartisan, non-political research group and a part of the Pew Research Center.

The 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.

These are some of the conclusions from “The State of the American News Media, 2007,” a 700-page comprehensive look at the state of U.S. journalism by PEJ, a project of the Pew Research Center in Washington, D.C. and funded by The Pew Charitable Trusts. This is the fourth annual report.

“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 even more reason than a few years ago to believe, the report says, 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 franchise 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, far from inevitable, 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. Features 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:

  • The evidence is mounting that the news industry must become more aggressive about developing a new economic model. An increasingly logical 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.  
  • The 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 leveling influences.  
  • What author Michael Crichton once called the “Crossfire Syndrome,” appears to be evolving. 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 State of the American News Media, 2007: Economic Challenges Usher In Era of the Niche For Mainstream Media on State of the News Media 2007 Web site.

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