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News Investment

News Investment

By the Project for Excellence in Journalism

If online news increasingly appears central to journalism’s future, the question of newsroom investment becomes critical in looking ahead. Indicators in 2004 suggested that if organizations are investing at all, they are doing so cautiously.

First, in the spring of 2004, the Pew Center for the People and the Press and the Project for Excellence in Journalism conducted a survey of American journalists, including members of the Internet press. Among online journalists, 62% said the size of their newsroom staff had decreased compared with three years earlier. That dwarfs the 37% of national print, TV and radio journalists who reported the same thing.1

Second, anecdotal evidence suggests that companies that invest are doing so by downsizing in some areas and expanding in others. At Reuters, for example, executives are putting their money into the processing of online news as opposed to the gathering of it. Those are very different elements, the first an investment in equipment and the second an investment in staff.

Tom Regan, executive director of the Online News Association, says his work with people in the industry has convinced him that the number of bodies in online news organizations is fewer than it was during the boom of the late 90s. That despite the fact that online news is now becoming profitable and serves a much larger audience. The software has developed to a point, he explains, where fewer and fewer people are needed to write code and get the stories up on the Web.

Howard Finberg of the Poynter Institute agrees there are fewer bodies, but sees greater cause for concern in the substitution of automated technology for people.

Finberg also thinks that online news media need to invest more in the way people use the Web rather than just becoming a replica of newspapers. He and Regan agree that one of the obstacles to growth is that online producers in general still don’t think “intelligently” about the Web and its potential as an information tool.

Web Video and Other Technology Investment

One area where there has been some development is Web video.

Over the past few years, it has become more sophisticated and user-friendly, particularly in the amount of time required to connect, buffer time and rebuffer time.2 And considerable percentages of young people feel the quality of Web video has caught up with or even surpassed television. In September 2004, the Online Publishers Association conducted research that showed that two thirds of people 18 to 34 years old (67%) said watching a short video clip online was the same as watching highlights on television, or better.3

Much of that video, moreover, is journalism. A study by AccuStream iMedia Research, which conducts studies on interactive broadcasting and streaming media, shows that news captures 18% of all streaming video, second only to music videos at 34%.4

One of the biggest developments heading into 2005 is the emergence of search tools for video, a move that could have a wide impact on online advertising and copyright law in particular. Media companies will surely lobby Congress to adopt a more muscular position on protecting copyrights for movies and television. Google, Yahoo! and Microsoft were all developing new search tools for digital video. How the story develops in 2005 could be critical in the online media universe.

A leading online newspaper in using Web video is The News Journal in Wilmington, Delaware. Because Wilmington has no local broadcast stations of its own, The News Journal has begun providing local breaking-news footage to Wilmington residents online. The site runs a three-minute newscast, produced by the paper and featuring an anchor from the paper’s staff, twice each day. The paper is considering doubling the number of newscasts, adding sports coverage and even offering a live stream. According to the paper’s vice president of new media, traffic to the site has been growing 20% each week.5

The New York Times began using its Web site in 2004 to run video created by the columnist Nicholas Kristof. The Times even broadcast the political conventions live on its site, which made it a competitor of the television networks. As a BusinessWeek Online editor put it, “Publishers now have to think of themselves programming in day parts, which is much more like TV than magazine publishing.”6

In late November 2004, The Wall Street Journal Online launched “The Wall Street Journal Video Center,” which houses video clips of both breaking news and financial information from Journal analysts and from partners like CNBC.7

Some papers are using the Web to create more transparency in their operations. When the San Francisco Chronicle’s editorial board sat down with the mayoral candidates in the last election – a proceeding that is normally closed to the public – the paper took advantage of its site,, to post unedited video of the meetings. In the three days after the videos were posted, 35,000 page views were recorded. The site also included information on how the editorial board made its endorsement decision.8

Smaller papers, too, are finding ways to invest in technology to provide additional content. When a fire threatened Carson City, the 17,000-circulation Nevada Appeal created a blog to keep track of the fire’s movement, updating it every 10 minutes. As a result, Web traffic jumped to 15 times the norm. The blog ended up costing the paper only about $2,000 in overtime pay for staff members.9

During the hurricane season of 2004, blogs became a critical source of information for delivering the news when the hurricanes shut down the normal capacity of newsrooms. The Sun Herald in Biloxi, Mississippi, used a blogger to post frequent storm updates from staff people out in the field, who filed using laptops and cell phones.

For now, those are examples of the potential of the medium, and they probably represent exceptions, not the norm. A University of Texas study found that more than half the papers they studied updated their Web sites occasionally from their print editions (aptly called shovel-ware).10

Economic Pressures

The Pew survey also suggests that online journalists detect increasing influence of advertisers on the kinds of content they produce, perhaps more so than in other media. Online journalists were more than twice as likely as the mainstream press to say they have been pressured to do a story because it related to an owner, advertiser, or sponsor – 35%, versus 15% of national mainstream journalists.11

When asked to name the most important problem facing journalism today, online journalists most frequently say the quality of the coverage (32%) and economic and business pressures (32%). Among national mainstream journalists, 41% cite the quality of coverage and 30% the economics.12

Most Important Problem Facing Journalism Today, 2004
Survey of national and local journalists
Design Your Own Chart
Source: The Project for Excellence in Journalism/Pew Research Center for the People & the Press, survey of online, print and broadcast journalists, March-April 2004.
Qu: What do you feel is the most important problem facing journalism today?

When we break down the 32% of online journalists who say the most important problem is economic or business pressures, 10% say declining audience or attracting an audience, 7% say lack of resources and financial cutbacks, 9% say too much of a bottom-line emphasis. Another 6% identify corporate ownership and consolidation, and 6% indicate staffing problems or putting ratings ahead of quality.

More generally, online journalists feel many of the same bottom-line pressures as those in the mainstream press. In the Pew survey, 63% of online journalists said bottom-line pressure is hurting journalism while 34% said it is just changing it. Those numbers compare quite closely to national mainstream journalists: 66% hurting and 29% just changing.13

One other finding is worth mentioning as well. There may be growing acceptance of the value of online journalism in traditional newsrooms, instead of fear that the new medium is a bastion of rumor and lesser standards. Fully 60% of national mainstream journalists say “the emergence of the Internet has made journalism better.” That is nearly identical to the 63% of online journalists who feel that way.14

Convergence Doesn’t Mean Fewer People

One other point in trying to assess trends in news investment involves convergence, the merging of operations of different media, such as print, Web and TV, into a more integrated newsroom. Will convergence lead to further cutbacks, as news operations try to avoid duplication but fail to recognize the impact on quality of asking people to do more? There was some evidence in 2004 that convergence does not necessarily mean fewer people in the newsroom doing more work. The Tampa News Center, housing the Tampa Tribune, WFLA-TV and, had more journalists in 2004 than in 2000. This is also true for salespeople, since space still needs to be sold on different media.20 Whether the workload has still increased, giving people less time to produce and edit stories, deserves further attention.

Local-TV Web Sites

Because of the difficulty of producing a profitable local-television online site, many stations are outsourcing the building of their sites to companies such as Internet Broadcasting Systems or WorldNow. While those companies have helped stations get off the ground, Mark Glaser of the Online Journalism Review noted in 2004 that they may ultimately hinder stations’ ability to do the most with their sites. IBS uses a few standard designs, so many sites may look the same. IBS also has some control over the stories that appear on the site outside of those produced locally.21


1. Pew Research Center for the People & the Press in collaboration with the Project for Excellence in Journalism and the Committee of Concerned Journalists. “Bottom-Line Pressures Now Hurting Coverage, Say Journalists.” Published May 23, 2004, page 56. Available online at:

2. For research on the quality of video on different news sites, see “KeyNote Research: News Video Quality Survey,” May 2004. Available online at: A buffer is defined as a “small amount of data that is stored for a short amount of time, typically in the computer’s memory (RAM). The purpose of a buffer is to hold data right before it is used. For example, when you download an audio or video file from the Internet, it may load the first 20% of it into a buffer and then begin to play. While the clip plays back, the computer continually downloads the rest of the clip and stores it in the buffer. Because the clip is being played from the buffer, not directly from the Internet, there is less of a chance that the audio or video will stall or skip when there is network congestion. Buffering is used to improve many other areas of computer performance as well. Most hard disks use a buffer to enable more efficient access to the data on the disk. Video cards send images to a buffer before they are displayed on the screen (known as a screen buffer). Computer programs use buffers to store data while they are running. If it were not for buffers, computers would run a lot less efficiently and we would be waiting around a lot more. It’s just another aspect of computer design that we take for granted. online glossary. Available online at:

3. Online Publishers Association press release, “Online Compares Favorably to Other Media Across Generations, According to New Online Publishers Association Report,” September 21, 2004. The full study can be found at: `

4. AccuStream Research Press Release, November 9, 2004

5. Jesse Oxfeld, “Watching the Newspaper on the Web.” Editor&, December 16, 2004

6. Stephen Warley and James Sheridan, “The Melding of the Media Landscape.”, February 18, 2004.

7. Jesse Oxfeld, “Watching the Newspaper on the Web.” Editor&, December 16, 2004

8. Mark Glaser, “Papers’ Online Units Allow Editorial Boards to Lift Veil with Video, Blogs.”, March 9, 2004.

9. Charles Geraci, “Nevada Newspaper Responds to Wildfire With Blog.” Editor&, July 28, 2004

10. Rosental Calmon Alves, “Many Newspaper Sites Still Cling to Once-a-Day Publish Cycle.”, July 21, 2004.

11. Pew Research Center for the People & the Press in collaboration with the Project for Excellence in Journalism and the Committee of Concerned Journalists. “Bottom-Line Pressures Now Hurting Coverage, Say Journalists.” Published May 23, 2004, page 58.

12. Pew Research Center for the People & the Press in collaboration with the Project for Excellence in Journalism and the Committee of Concerned Journalists. “Bottom-Line Pressures Now Hurting Coverage, Say Journalists.” Published May 23, 2004, page 40.

13. Pew Research Center for the People & the Press in collaboration with the Project for Excellence in Journalism and the Committee of Concerned Journalists. “Bottom-Line Pressures Now Hurting Coverage, Say Journalists.” Published May 23, 2004, page 40.

14. Pew Research Center for the People & the Press in collaboration with the Project for Excellence in Journalism and the Committee of Concerned Journalists. “Bottom-Line Pressures Now Hurting Coverage, Say Journalists.” Published May 23, 2004, page 54.

15. The Pew Research Center for The People & The Press, “Pew Research Center Biennial News Consumption Survey,” June 8, 2004, page 98.

16. James Coates, “Speedy reader delivers news from many sites.” Chicago Tribune, August 28, 2004.

17. Yahoo! Press Release, “Yahoo! Revamps Front Page and My Yahoo ! Beta Versions Available Today,” September 28, 2004.

18. Pew Internet & American Life Project, “The State of blogging,” January 2005, pages 1 and 4.

19. Scarlett Pruitt, IDG News Service. “Microsoft guns for Google on news search.”, July 27, 2004.

20. Mark Glaser, “Business Side if Convergence Has Myths, Some Real Benefits.”, May 19, 2004.

21. Mark Glaser, “Outsourcing News Sites May Prove Short-Sighted for Local TV Stations.”, March 26, 2004.