While technologically the Internet maintains its potential for open access and interactivity, when it comes to garnering large audiences, only a few succeed. And, those few are most often well-established names from other mediums.
The vast majority of the top 20 news sites are owned by big companies that make their money primarily from existing media. They have been able to leverage their brands and their resources in order to dominate online as well.
The major news sites on the Internet are not only big, but the names are familiar as well. The big companies include Time Warner (CNN and AOL), Disney (ABC), General Electric (NBC) and others.
January through October, 2003
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Source: Advertising Age 100 Leading Media Company list; Nielsen//NetRatings and Editor and Publisher Online; PEJ Research
The top 100 list is determined by domestic media revenues. The top 20 Web sites are by monthly unique visitors. In the first 10 months of 2003, 26 sites appeared in the top 20 list.
In the first half of 2003, 26 different sites made it on the monthly list of the top 20 for audience.1 Fully 85 percent of these sites (22 out of 26) have parent companies among the top 100 media companies, according to Advertising Age.2
And most of them are the biggest of the big; 69 percent of the most popular news Web sites are owned by the 20 biggest media companies.
Close to half of the most popular Web sites (42 percent) are owned by one of the 10 largest media companies. And four – CNN, AOL, Netscape and Time Magazine – are owned by a single company, Time Warner, the biggest media company of all in revenue. (The other 10 owners include Viacom (CBS), Disney (ABC), News Corp. (Fox), Gannett, and Microsoft and General Electric (MSNBC).
A quarter of the most popular news Web sites (27 percent) are owned by companies in the next tier in size (the 11th through 20th biggest companies in revenue). These include some of the nation’s bigger newspaper companies, such as the Tribune Co., Hearst, Advance Publications, The New York Times and Knight Ridder.
Yahoo, which ranked as the third most popular news site during the first half of 2003, is one of the few companies that derives its revenue chiefly from online ventures. It ranks 40th in the Advertising Age list.
The 15 percent of the top sites not owned by one of the top 100 media chains includes Internet startups such as WorldNow and Internet Broadcasting Systems. It also includes older, established outlets such as the BBC and Microsoft. And one of these companies is not as independent as one might think: Internet Broadcasting Systems counts Hearst-Argyle, Post-Newsweek and McGraw-Hill as investors.
Beyond the fact that the major players on the Internet are large and familiar media company names, perhaps the more interesting question is: What is the business strategy they are following?
The prevailing trend in the era of online news has been to create synergy. On the Web this is true not only within a corporation, but also across different companies. In this way, there can be popular news sites that produce no news of their own.
Two of the top four news sites – CNN and AOL – fall under a single owner, Time Warner. On the one hand, the company leverages its worldwide cable news brand name with CNN, which it uses for promotion as well as Web-only news and features. AOL is the opposite. It can be seen only by the nearly 25 million AOL subscribers and relies on content from a variety of other sources, both from Time Warner (CNN and Time) and from other national outlets such as ABC, The New York Times and The Wall Street Journal.3
Yahoo news parallels the AOL model. Rather than strike out into the world of online journalism by reporting its own news, Yahoo culls from more than 100 outlets. For example, the Yahoo news page features links to Washington Post and USA Today articles. MSNBC is owned jointly by Microsoft and NBC. It also draws heavily from The Washington Post, as well as Post-owned Newsweek.
The top newspaper sites – The New York Times, The Washington Post and USA Today – supply their sites with content, using the Web as a showcase for breaking stories before they appear in the paper the following morning.
At the same time as these large media corporations are finding new ways to promote news content on the top Web sites and cementing their hold at the top of the online news world, another strong movement has been toward the personally owned blog. The nature of the Web means that anyone with a computer and an Internet connection can effectively own his or her individual news outlet. Web hosting prices are low enough that even the largest blogs can be run for less than $500 a month.4 While most blog sites go unnoticed or are quickly abandoned, some have had enough impact to offer an alternative to the mainstream news media.
The Web makes it possible for the coexistence of big media, with its resources for covering news quickly, and small media, with their penchant for opinion and even breaking stories that may escape the attention of the rest of the press.
1. The 26 sites are: ABC News, Advance Internet, AOL News, BBC World Service, CBS News, CNN, Cox Newspapers, Fox News, Gannett, Hearst Newspapers Digital, Internet Broadcasting Systems Inc., Knight Ridder Digital, LA Times, McClatchy Newspapers, MediaNews Group, MSN Slate, MSNBC, Netscape News, NYTimes.com, The Boston Globe, Time Magazine, Tribune Newspapers, USAToday.com, washingtonpost.com, WorldNow, Yahoo! News
2. Advertising Age, “100 Leading Media Companies,” AdAge.com, August 2003. Companies are ranked by their total media revenues collected in the United States in 2002. The list is available at http://www.adage.com/page.cms?pageId=1018.
3. Howard Kurtz, “AOL Version 2004: You’ve Got News,” Washington Post, December 22, 2003, p. c1.
4. Kathy Kiely, “Freewheeling ‘bloggers’ are rewriting rules of journalism Objectivity? Not here — and the masses eat it up,” USA Today, December 30, 2003, p. 1A.