Two developments converged in the last year to shorten the time that journalism has left to reinvent its business model and secure its financial future, according to a new comprehensive study on the State of the American News Media.
First, the audience migration to the web accelerated substantially in 2008, and even though most of that growth was at traditional news destinations, the financial impact of that was a negative one, according to the report by the Pew Research Center’s Project for Excellence in Journalism. Traffic to the 50 news websites, for instance, jumped 24%, triple the pace of growth of the year before, but online ad revenue flattened, and in newspapers it declined. Second, the recession hammered advertising and diverted attention away from innovating new revenue sources.
The news industry was already in a race to find new ways to underwrite the gathering of news online, using the declining revenue of the old platforms to do so. The result of the changes of 2008, according to the report’s overview, is an industry diminished, with less time and resources to finance the transition.
On the other hand, the notion that traditional journalism is on the brink of extinction is overstated.
Among the major trends the report cites, the debate over new economic models, especially for newspapers, has largely focused on the wrong things. That debate has focused on micro-payments for content and non-profit ownership models, when other potentially more promising options have gone less examined.
The report’s detailed Year in the News—a comprehensive analysis of some 70,000 stories from all the main media sectors—finds that the media to a significant degree did not see the economic collapse coming. The month before the collapse of Lehman Brothers, for instance, the economy was at its lowest point as a story all year, and the story of the summer had little to do with banking. It was focused on gas prices.
The death of newspapers is not imminent, despite news of bankruptcies and even some closures. The industry still took in roughly $38 billion last year, and earned profits in double digits. Some 48 million newspapers are sold everyday. Even newspapers whose companies are in bankruptcy are profitable. But revenues fell 14% last year, and have fallen 23% in two years. The industry lost 10% of its newsroom jobs, we estimate, last year, and more than that at larger papers. By the end of 2009, a quarter of all the newsroom jobs that existed in 2001 will be gone.
The only sector to really thrive in 2008 was cable news. With an almost singular focus on politics, cable saw overall average ratings through the day and evening rise 38% in 2008, and profits rose 33%. While much of that audience fell away after the election, not all of it did. In February, audiences were still 5% higher than for the same month the year before.
In addition to these major trends, the overview of the report includes key findings across media sectors by audience, economics, news investment, ownership, and digital trends.
The full report from the Pew Research Center's Project for Excellence in Journalism is available online at stateofthenewsmedia.org.