State of the Media

‘State of News Media’ Signals that Insubstantial Newspapers Require Reinvestment as Revenue Returns

After seven years of co-authoring the newspaper chapter of the “State of the News Media” report, I have maxed out on death and dying as a frame of reference.  So I led the latest treatment of newspapers with this variation:
“Poynter Institute ethicist Kelly McBride was visiting former colleagues at the Spokane Spokesman-Review last summer, when the conversation slid into the “how-bad-is-it?” mode. It has gotten so bad, one journalist said, that the independent contractors who deliver the paper complain that the Monday edition doesn’t have enough throw-weight to get all the way up the porch.
“That’s our metaphor for the state of the industry early in 2010. Newspapers, contrary to what is frequently alleged, are not dying in droves.
“But far too many American papers are at risk of becoming insubstantial. They lack the heft to be thrown up the front porch or to satisfy those readers still willing to pay for a good print newspaper.
“As they shed circulation at an accelerating pace, they lose value to advertisers.  Worst case, the industry could simply keep shrinking, stall out as a business and be left without resources to reinvent itself.”
Though the remaining 40 pages of the chapter are loaded with statistics, my thesis is a tough one to prove definitively. But I keep gathering supporting opinions.
Well-traveled associates bring back impressions of newspapers that are “just terrible” or a shadow of their former self.
An editor of a chain-owned small-city newspaper, which has been through cutbacks and price increases (and remains highly profitable), confesses that he is “worried as hell we’re not going to have enough news in the newspaper to make it worth picking up for 50 cents, let alone 75 cents.”
Nonetheless, the latter part of 2010 will begin a window of opportunity for improvement. Already share prices have recovered from the rock-bottom lows of a year ago. At least a few buyers are emerging for papers up for sale. Nearly every paper is operating profitably — and within hailing distance of seeing revenues increase, too.
But there is a longtime dilemma lingering unresolved. The future is clearly digital, but for now 90 percent of the revenue remains stubbornly stuck in print. So there is every reason to look at developing online advertising with better targeting and a smarter sales approach and to move fast on new revenue opportunities like mobile or tablet editions. But newspaper organizations need to  have one eye on keeping the old cash cow healthy too — and satisfying shareholders, lenders and private owners while they are at it.
So after the recession is good and done, I see a tricky rebuilding challenge, summarized in my portion of the PEJ report:
“We may soon see the return of an old choice. Do papers extract most of the returning ad revenue in higher profits? Or will they recognize the damage done by the financial hurricane that swept through the industry and apply some substantial investment to developing new lines of business and rebuilding skimpy news reports in print and online?”
Spacer Spacer

The math has always been tantalizing. If newsroom expense is typically 10 percent of revenues, it only takes sacrificing one point of profit margin to raise news investment 10 percent. But I’m not banking on those newspaper execs who have a short-term focus on the bottom line to see it just that way.

Read more

‘State of News Media’ Documents Decline, Spots 6 Trends for Reinvention

The Project for Excellence in Journalism is out with its annual “State of the News Media” report, chronicling three of the four most important aspects of news today: what’s being lost, what’s currently replacing it and how audiences are faring in the meantime.

The study paints a picture of mainstream media beset by crumbling business models, journalism start-ups still stumbling in their efforts to generate significant original content, and audiences left to bumble along as best they can, trying to make sense of a confusing media landscape.

All true and worthy of the invaluable benchmarking the industry has come to rely on PEJ to provide.

The report, seventh in PEJ’s series of annual check-ups on the world of news, sheds less light on journalism’s critically important — but tougher to quantify — fourth dimension: the chaotic reinvention of the forms of news that might come next.

In its look at established media, the study found 5,900 newspaper jobs lost in 2009 (in addition to a similar number in 2008), reducing newsroom employment at newspapers since 2001 by a third. My Poynter colleague, Rick Edmonds, co-authored the study’s 40-page newspaper report, which he describes in “Insubstantial Newspaper Requires Reinvestment as Revenue Returns.”

The report tracks losses on other publishing platforms as well, including 450 jobs at local TV news operations. Interestingly, those job cuts were accompanied by a 10 percent increase in the average amount of local news produced per station each day. That means fewer people producing more news, hardly an equation for increased quality.

Audiences for news declined on all platforms except digital and cable, the study reports, with the bulk of the online traffic for news attracted by the biggest operations: “Of the 4,600 (news and information) sites, the top 7 percent collect 80 percent of the traffic. And the top 20 sites attract the majority of that (most of them legacy media).”

PEJ reports big declines in the revenue streams supporting news, including a 26 percent decline in advertising for newspapers; a 22 percent drop in local TV ad revenue (triple the loss suffered in 2008), an 8 percent drop in TV advertising, and 5 percent in online ads, with online news sites likely hit harder.

The study finds little promise in research into user willingness to pay for content, prompting PEJ to reiterate a conclusion from last year’s report: sustaining news will require a hybrid of revenue streams, some of them perhaps not yet invented.
PEJ’s examination of what’s replacing legacy media draws on the work of university research tracking the evolution of citizen media. Among the findings: “the citizen news sites (included in the research) offered less news, fewer updates and were less open to interaction with readers than traditional news Web sites.”

Despite its comprehensive review of citizen media, the study mostly underlines the need for reinvention.

Pointing us in the direction of reinvention with the lead of its overview — “What now?” — PEJ’s analysis highlights six major trends that should serve as signposts for both commercial and editorial innovation:
  • “As we learn more about both Web economics and consumer behavior, the unbunding of news seems increasingly central to journalism’s future.” The trick will be designing revenue models to replace such historic scenarios as newspapers making enough money on display and classified advertising to support news in the public interest that generates little or no revenue on its own. Interesting example from last week: The New York Times’ decision to unbundle its Book Review from e-reader editions of its Sunday paper, much as the paper has done for years with print editions of the Book Review.

  • “The future of new and old media are more tied together than some may think.” The report documents how little original new content is being generated by journalism start-ups, but recommends various “pro-am” partnerships as one way of filling some of the gap created by the failure of new outfits to replace enough of the diminished reporting of the stripped-down mainstream. Especially encouraging are the sort of alliances with local bloggers launched by the Miami Herald, Seattle Times and others described in my recent Shorenstein paper [PDF, partnerships section begins on p. 37].

  • “The notion that the news media are shrinking is mistaken.” What is shrinking, though, is original reporting, and the growth of commentary and opinion online is not providing users with enough of the independently-reported information they need to make good decisions about civic life. Digital media start-ups continue to rely on legacy news organizations for expensive, hard-to-get reporting, but those organizations are producing less and less of such content as they continue to trim their ranks. All of which pinpoints what is perhaps journalism’s most critical funding question: Who will pay for public interest news that provides the fodder for so much of the discussion and argument growing so swiftly online?

  • “Technology is further shifting power to newsmakers, and the newest way is through their ability to control the initial account of events.” PEJ laid some of the groundwork for this assertion with its January analysis of the news ecosystem in Baltimore. Critics said the study failed to capture the full range of new media invention in Baltimore, but it did establish the disturbing trend of news organizations “focusing more time on disseminating information and somewhat less on gathering it” — a phenomenon that diminishes journalists’ capacity to provide independent assessment of newsmakers’ claims.

  • The ranks of self-interested information providers are now growing rapidly and news organizations must define their relationship to them.” Some of the collaboration of news organizations with such “self-interested information providers” is working, some less so, but foundation-funded news services and other start-ups (created by those with a stake in the content) will likely become an increasingly important source of public interest news. It’s an area that cries out for innovation, not only in terms of revenue models but in the sort of guiding principles that could help ensure the reliability of the information and reporting.

  • “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.” As much as news-related start-ups are multiplying online and audiences are growing, most of the audience continues to rely on traditional media, one way or another, for news. And the reporting provided by those organizations is in steady decline. “In short,” the study concludes, “the cutbacks in old media are drastically affecting not only traditional media but still significantly impact online content as well.”
The report says the biggest issue within news organizations is “how much revenue lost in the recession the industry will regain as the economy improves,” adding:
“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?”
The future of news will be partly shaped by start-ups already beginning to replace mainstream media, but much of it will be determined by experimentation that’s just getting started and probably not ready for the sort of assessment PEJ provides. I’m thinking especially of some of the work-in-progress I glimpsed last week at a couple of stops: the e-reader conference exploring the potential for news on such platforms as the iPad, and the WeMedia gathering exploring entrepreneurial media in many forms.
Meanwhile, I continue to wonder: just what sort of commercial and editorial reinvention will it take to close the gap between the shrinking capacity of legacy news operations to deliver the news we need and the still halting initiatives of start-ups hoping to take their place?
Read more


State of the Media 2009 Signals Need for Citizen Media

Spacer Spacer

The Project for Excellence in Journalism’s annual State of the Media 2009 report released this week has a clear message: most existing news media are in trouble. But in the special sections, and fine print, there are suggestions that could end up leading to less risk for news organizations that must move forward. It is time to look for other models — models that involve citizen media.

Take a risk and look into something like Newsgarden. This platform can be dropped into an existing Web site, and it adds a customizable Google map that displays the locations of your news stories in an inset on your site.

Readers can add stories, places on the map, photos and other content. The big breakthrough is the “…self-service ad placement system.” If local business people can use a browser, they can create a geo-tagged ad for themselves [and] choose among options for reach and cost in a way that “is cost-effective, highly efficient and scalable.” This is important, given that the report found Google and other aggregators are attracting more local advertising than news organization Web sites.

“Power is shifting to the individual journalist and away, by degrees, from journalistic institutions,” the report said. So loosen your hold on your news stories. Tag them, organize RSS feeds, go mobile.

Think of your reporters and each individual story as your brand and product. The Associated Press and Reuters seem to be moving in this direction. If a reporter’s stories draw lots of eyeballs, why not charge for a compilation of the work? Take a risk and push your content out; don’t keep it tied to a mental model of newsprint pages.

Link out, freely, frequently, but intelligently whether you think it is risky or not. Legacy media don’t use links to all the other news out there as readily as citizen bloggers or citizen news sites. On the other hand, legacy media do excel in creating innovative ways for people to download or receive content. Let users create custom content packages and download them for free or for a fee.

Not using social media is risky because, as the citizen-based media section of the report found, “…social media and citizen video broadened in important ways as a means of distributing news, not just for social interaction and entertainment.”

With the State of News Media 2009 so bleak, it is more than cold comfort to understand that taking risks is going to be less risky than trying to hold the status quo. Read more


Shirky, State of the Media Make the Case for Risk

Avoiding risk is a risk we can no longer afford.

Spacer Spacer

If you find yourself debating a new approach to news, consider the similar conclusions of two very different reports.

In a post to his blog on Friday night, NYU professor and Internet thinker Clay Shirky argues that the best hope for journalism’s future lies in aggressive experimentation. Excerpts:

There is no general model for newspapers to replace the one the Internet just broke…

That is what real revolutions are like. The old stuff gets broken faster than the new stuff is put in its place. The importance of any given experiment isn’t apparent at the moment it appears… Experiments are only revealed in retrospect to be turning points…

When we shift our attention from ‘save newspapers’ to ‘save society,’ the imperative changes from ‘preserve the current institutions’ to ‘do whatever works.’ And what works today isn’t the same as what used to work…

No one experiment is going to replace what we are now losing with the demise of news on paper, but over time, the collection of new experiments that do work might give us the reporting we need…

Today, the Project for Excellence in Journalism releases the latest of its exhaustive annual analyses of the State of the News Media. Rick Edmonds, co-author of the study’s newspaper chapter, notes in the Biz Blog that PEJ “is cautious on prescriptives.”

But PEJ highlights several ideas it believes hold more promise than, for example, micropayments or nonprofit ownership:

  • A cable model that includes payment to content providers attached to monthly fees collected by Internet Service Providers
  • Online retail malls enabling local search networks
  • Subscription-based niche products for professional audiences

Among the most notable of PEJ’s more than 200,000 words:

Several new revenue streams most likely are needed. The closest thing to a consensus right now is that no one source is a likely magic bullet…
Reinvention does not usually come from managers prudently charting course. It tends to come from risk takers trying the unreasonable, seeing what others cannot, imagining what is not there and creating it…

Neither report suggests experimentation without purpose. Both make a persuasive case that the future of news will be served — not threatened — by the kind of risk-taking we have barely enough time to try. Read more


Cable Grows Audience, Advertising While Other Media Decline

The big media story of the decade is supposed to be the inexorable movement from print to digital, but there is a ringer attracting both audience and advertising as most news media suffer — cable television.
With a big boost from the presidential election, cable news had a banner year in 2008, growing advertising spending 27 percent in 2008, making online (up 4 percent) look like a 97-pound weakling by comparison. So says the Project for Excellence in Journalism’s sixth edition of its State of the News Media electronic yearbook published today.
As co-author of the newspaper chapter of the report, I’m on the leading edge of a litany of bad news familiar to most Biz Blog readers. But comparison to the fortunes of other media yields some surprises:
  • Local television audiences were down 4.5 percent for early evening news in 2008, almost exactly matching newspaper declines (4.6 percent daily and 4.8 percent Sunday) for the most recent reporting period. Advertising revenues were down 7 percent, an astonishingly bad result in an election and Olympics year, which typically produces a big increase over a previous year lacking those revenue boosters.
  • News magazines probably have it even worse than newspapers. They too had circulation declines of almost 5 percent and ad revenue declines of 17 percent. U.S. News & World Report and Newsweek are both rolling the dice with big changes in their formats.
  • Ethnic media, a growth area through most of the years the report has been published, saw circulation declines for most African American papers, mixed results for Spanish language papers and continued growth for Spanish language television.
  • Digital media took its own hit as the recession settled in, with ad growth slowing to a crawl. Newer formats like ads to mobile devices and pre-rolls continued to show healthy growth (59 percent and 33 percent respectively), but they were exceptions. Banner advertising looks less and less like a sustaining income source for newspaper organizations in transition or online-only startups. One ominous indicator for newspapers and local TV: While local advertising is a growing share of the online total, 57 percent of it goes to Google and Yahoo.
Cable news is the exception to the overall negative or mixed picture. Audience grew 38 percent in 2008. That probably cannot be sustained in 2009. But after decades weighed down by heavy initial capital costs, cable has evolved into a highly profitable business. It is sustained by subscriber fees even if advertising is soft. And the package of services (often including high-speed broadband connections and sometimes phone) is one consumers are loathe to cancel.
The report is cautious on prescriptives, dubious, for instance, about micro-payments for online content or a philanthropic rescue of failing newspapers. “The closest thing to a consensus right now,” PEJ executive director Tom Rosenstiel writes, “is that no one source is a likely magic bullet (for newspaper organizations).”
More and more of the news audience, often in a “hunt-and gather” mode, goes to the Internet as a first choice, Rosenstiel writes, but the experimentation with new revenue models to capture that attention has been stalled by the recession. Read more

State of the Media 2008: Decoupling Blues

By Rick Edmonds
Media Business Analyst

Advertising takes center stage in the fifth edition of the State of the News Media report, released Monday by the Project for Excellence in Journalism.

The heart of the problem, especially for newspapers, is not loss of audience but “a broken economic model — the decoupling of advertising and news,” the report finds. “Advertisers are not migrating to news Web sites with audiences, and online, news sites are already falling financially behind other kinds of Web destinations.”

A separate report on the future of advertising finds that Madison Avenue is as tradition-bound — or more so — as news outlets. Catching up might involve finding ingenious ways to advertise on news sites. But it might also accelerate the movement to freestanding advertising, friendly to search, that could dramatically reduce budgets for display advertising in traditional media.

The online report is massive — the equivalent of 700 pages of text. It covers eight media industries and offers several extra features. This year’s report draws on PEJ’s ongoing content analysis and includes a survey of journalists’ attitudes and a look at 64 citizen media Web sites in 25 communities.

As in years past, I am co-author of the newspaper chapter, and the “decoupling” theme is one PEJ director Tom Rosenstiel and I have been discussing for 18 months. The nub of the idea is that viewing ads online is more like using the Yellow Pages than seeing ads in a newspaper. People search narrowly for what they want, so accompanying news content may be beside the point — or even a distraction.

I write frequently in the Biz Blog both about the problem and proposed solutions. Some publishers are experimenting with their own search-only product sites, sometimes accompanied by user reviews. Newspaper and local television sites hope to catch the wave of local online video that analysts like Gordon Borrell predict will soon arrive.

The latest iteration of the Newspaper Next project advocates that newspaper organizations reinvent themselves as “local information and connection utilities.” And in my most recent post, veteran analyst Lauren Rich Fine suggested that newspapers could thrive even if print classified advertising went to near zero over the next five years. They would need a business model that capitalized on their news dominance, their continued strength as an outlet for retail and national advertising, and yet-to-be-invented businesses.

The new report brings fresh data and analysis to the case:

  • According to TMS Media Intelligence, news sites are now clearly trailing the overall growth of Web advertising.
  • “Citizen” sites and blogs do not fare better economically; for them, too, assembling an audience is hard to transfer into advertising sales.
  • By most measures (though the metrics are still inexact), the audience for news is actually growing when online is included along with print circulation.
  • News sites get high marks for innovation, and in 2007 they showed their willingness to connect to outside destinations rather than being “walled gardens.”
Rosenstiel still thinks the news business “must find new ways to monetize the service journalism offers — the ability to vet information and help citizens navigate their lives.” But the report also notes that 2007 included a step backward in charging for content as Times Select was discontinued and Rupert Murdoch freed more content from behind the paid wall.

In his introductory overview, Rosenstiel also observes that the newsroom now clearly appears more innovative and risk-taking than the business side of news organizations, where some ad sales staffs are stuck on old practices and change is not going well.

Agreed. But I also think the business people have the much tougher problem, as the report demonstrates. In the newsroom, if you can stand the whirl (and the discouraging cutbacks), this is an exciting time to develop new digital formats and redefine the old print paper or daily broadcast.

The business side’s decoupling dilemma is, plain and simple, a brain buster. Read more


State of the News Media 2007: Down in the Valley, with Lots of Company

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. Read more


State of the News Media 2006: Skimpy Rations

How has your diet of news been lately? Do you find yourself eating several meals, grazing the rest of the day, but still going to bed hungry for high-fiber news content?

My colleagues at the Project for Excellence in Journalism, whose third edition of the State of the News Media electronic yearbook is released today, have an explanation. While we have an ever-expanding menu of media choices, all that media focuses, repetitively, on an ever smaller set of daily stories.  It amounts to a kind of pack journalism in which the herders, especially on national news are too often able “to control what the public knows.”

This year the project’s content analysis was across all media for a single news day, May 11, 2005.  It didn’t take long to identify an example of commodified reporting.  All three morning shows highlighted a story on a security scare in advance of President Bush’s trip to China.  All three interviewed the same lone person, a security expert from Citibank.

It is old news by now that cable obsesses on chat about “cases” like Natalee Holloway’s disappearance in Aruba and that celebrity couplings and other piffle are on the rise, displacing less sexy news that matters. (2005 was a year of sharp gains for celebrity magazines and circulation losses and layoffs at major news magazines).

However, the report finds a much broader erosion of substance:

“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.”

Newspapers, for all that, remain the most thorough and well-sourced daily news report in nearly any city.  The network evening news is another outpost of well-produced, well-sourced reporting – but it all has to be jammed into 18 minutes (the other 12 for commercials).

…We are not doom-and-gloomsters. Look at the fast transformation online…As co-author of the newspaper chapter, I am vexed by the negative basics we reported.  Circulation down 2 ½ percent daily and 3 percent Sunday.  Ad revenue growth of only 1 to 2 percent and half of that from online and niche publications.  Plummeting stock prices. Newsroom staff cuts that we estimate will total 1,200 to 1,500 fulltime professionals when the official tally of the American Society of Newspaper Editors census is announced next month.  Plus newspapers are getting smaller in every dimension – less width, thinner paper, smaller news hole.

On balance, though, we are not doom-and-gloomsters. Look at the fast transformation online:

*2004 – the majority of American papers provide little but “shovelware,” a repurposing of that morning’s report.

*2005 — most newspapers begin to move aggressively to expand their sites’ offerings: several large companies acquire online businesses, some of them shopping services.

*2006 – a headlong sprint to add online, multi-media features attracting more audience and getting them to spend more time at sites is in progress throughout the industry.

Using a mix of numbers provided by the companies and informed guessing, we estimate that the big four national sites — New York Times, Wall Street Journal, USA Today and Washington Post – together now employ at least 300 full-time journalists. There is an echo at many mid-sized metros where the online news staff will grow from single to double digits during 2006.  That count leaves out the even bigger gains as newspaper print staff is encouraged to think and produce online.

I am even cautiously optimistic that newspapers are discovering that breaking news and professional-quality writing will prove their strategic advantage on the web.

…Newspapers were at least making a start at investing in their future at some sacrifice to the bottom line.Newspaper companies are often hammered for their high profit margins.  Actually, 2005 was a year in which average pre-tax margins fell by 1.5 points to slightly under 20 percent.  That works out to an earnings decrease of 7 percent.  So newspapers were at least making a start at investing in their future at some sacrifice to the bottom line.

Much more of the same would be welcome through the rest of 2006 and into 2007.  Maybe some companies can summon the moxie to tell Wall Street to get ready for even lower margins during what one executive acutely calls “the valley” of multi-year transformation to multiple platforms and new business models.

But I digress.  The report itself is short on such speculation and long on hard data about every segment of the news industry.  It is (in my biased view) highly nutritious stuff for informed readers of news about news.

CORRECTION: An earlier version of this story misspelled Natalee Holloway’s name. Read more


State of the Media 2005: New Roles for News

The encyclopedic State of the News Media, 2005, second in an annual series, hits the electronic street today. It has the facts you expect to find in a solid reference work but some facts that are surprising as well.

If you think you know your media, check out these findings:

  • Without denying the growth and transforming power of the Internet, it’s a myth that blogs and their cousins are locked in head-to-head combat with traditional media for audience.  To the contrary, most Americans are all-day grazers among multiple formats.

    So if your diet includes a newspaper, magazines, the Internet, radio and television (local, network, and cable), you are not a news junkie, you are normal. Only 2 percent of Americans report in a Pew survey that online sites are their only regular news source. TV-only claims 8 percent, print-only, 5 percent; and the very traditional combination of print and TV, 24 percent.

  • Nor are young people news dropouts. Of 18-29 year-olds, a respectable 36 percent report going online regularly for news, up from 31 percent in 2002. (And of course there is some representation of the young among regular and occasional newspaper readers and TV news watchers).

  • The partisan divide in picking news sources to create a walled-in reinforcement of settled opinions has been exaggerated. Of course, conservatives like Fox News and cable TV and talk radio are often highly partisan. However, the vast majority of news consumers prefer middle-of-the-road, non-ideological news sources.

  • Credibility of the media is distressingly low and continues to slide. Partisans on both sides increasingly complain of bias in favor of the other guys, and they have now been joined by vocal bloggers who charge traditional media with being out of touch. Paradoxically, though, these credibility critics are slightly bigger media consumers than other adults.

  • Newspaper’s business woes and the consequent staff cuts and budget tightening are all too apparent and painful from the inside. But Pew’s content analysts still rate newspapers very high for depth and breadth – a typical story in their analysis had at least four identifiable sources.

  • Inward-looking newspaper folks may also be unaware of some modestly positive trends among their local television counterparts. Staffing at local TV stations was up a little in 2003 and salary increases averaged 10 percent. Newscasts typically account for 46 percent of station revenues, and revenues rose nearly 10 percent in 2004. A lingering problem is spreading smallish staffs over an ever-extending news day; nor is it clear that stations will reinvest in news as opposed to dropping the revenue to the bottom line.

As co-author of the report’s newspaper chapter, I can testify to being fact-checked and footnoted until I was screaming for mercy. The emphasis is on hard evidence, and bold flights of interpretive fancy are discouraged.

But my colleague, Tom Rosenstiel, director of the sponsoring Project for Excellence in Journalism, offers at least a little commentary on big-picture trends. Drawing on “The Elements of Journalism,” which he co-authored with Bill Kovach some years back, Rosenstiel sees blogs and partisan media departing from the traditional discipline of verification. Instead they rely on post-publication response and argument to sort out truth.

The new news forms are like “a free-flowing conversation with all the advantages and disadvantage that implies,” Rosenstiel writes, compared to the lecturing-at-you format of old media. Blogger activists, he predicts, will force traditional media to be more transparent about their sources and to hold themselves to higher levels of proof. They may even be drawn into refereeing debates that begin in the non-traditional media.

Rosenstiel and I are of a mind that newspapers, with ample cash on hand, are oddly reluctant to reinvest in their core newsrooms or in the content side of their online operations. I look for 2005 to see some uptick in newspaper investment in online and experimentation. But we will need to wait until the returns are in and see if the 2006 report confirms that hunch. Read more


Get the latest media news delivered to your inbox.

Select the newsletter(s) you'd like to receive:
Page 2 of 212