Last spring, a young newspaper executive impressed me with a prophetic metaphor. The newspaper industry, she said, is entering a valley of economic hardship. And the hills on the other side are several years away.

In the 12 months since then, her analysis has proven to be true.

But a new report indicates that newspapers have plenty of company down there.

State of the News Media 2007, released today by the Project for Excellence in Journalism, reports that newspapers, cable television, network news and local television are all losing audience. This is interesting, but not particularly shocking, compared to the headline finding: Growth in certain sectors of online news is slowing.

According to a recent Pew Research Center report, the audience for online news is shrinking. Between June 2005 and June 2006, the percentage of people who said they go online for news every day dropped from 34 to 27 percent. Growth in online advertising has also cooled, slipping below 30 percent for the first time in a decade, according to the Newspaper Association of America.

This fourth edition of the PEJ report, like its predecessors, is
comprehensive, running to
the equivalent of 700 pages. (Again this
year, I am co-author of the newspaper chapter). Each year, the report offers a special section of
analysis -- this year's edition focuses on news Web sites.

The PEJ report examines 38 news Web sites, rating them in six specific areas:

  • The level of
    customization of content possible.
  • The degree to
    which users could participate in producing content.
  • The degree to
    which sites offered content in different media formats.
  • The degree to
    which sites exploited the potential for depth in a subject.
  • The extent to
    which a site's own editorial standards, content and control were the brand
    being promoted.
  • The nature and
    level of revenue streams for the site.

Although no single Web site excels in every category, the report rates four as high acheivers:

The report also finds that news Web sites look less like one another than their legacy counterparts. and, for instance, bear less of a resemblance than their corresponding newspapers. It's a sign of the youth and vigor of the medium that no one-size-fits-all pattern has yet to take shape.

But, according to the PEJ report, some news Web sites have a long way to go. A number of newspaper sites do little more than copy stories from the morning paper. Others lean heavily on wire content for local news. Few use the Web to link stories to original documents and background information. And lots of sites shy away from in-text linking, perhaps concerned that once a reader leaves the news organization's site, he or she may not return.

Citing an example of a newspaper Web site that's had some recent troubles, the report quotes from the Los Angeles Times' Spring Street Project, a brutally critical internal study of the newspaper's Web site. " is
virtually invisible inside greater Los Angeles," the study says. "By some measures it is losing traction even
faster than the newspaper." The study blames inadequate staffing, creaky technology, dead links,
infrequent updating, lack of interactivity with readers and other factors.

Also covered in the PEJ report is the interplay between economic pressure and quality journalism.

In the report's introduction, PEJ director Tom
writes approvingly of newspapers' current efforts
to diversify their revenue streams.
Ideally, he writes, the economic model will broaden to include "online search and citizen media." A newspaper company will be like a mall, he writes; and the journalism will be the "anchor store."

Rosenstiel is dubious, though, of the vogue for hyper-local news among large newspapers. Regional titles like The Boston Globe, The Dallas Morning News and The Philadelphia
have announced they will focus intensely on covering their local communities, almost certainly at the expense of most international and some national coverage. But exactly what hyper-local means
for papers of this size remains to be defined.

This and other unknowns will become more clear with time. And even though the economic forecast outlined in the PEJ report is daunting, hope remains in innovation. Rosenstiel, however, suggests journalists ingest new ideas with a healthy dose of skepticism.

He worries, for instance, that hyper-local could simply be a another way of saying hyper-cheap.