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The Future of Journalism

The Future of Journalism

Overall, the journalists surveyed are less negative about journalism’s future than are journalists from national news organizations surveyed a year earlier, but they are still worried.

Most (54%) said journalism was “headed in the wrong direction” (vs. 45% in the right direction). But this was a much more even split than seen among legacy national journalists a year ago. In that group, 62% voiced pessimism and just 32% optimism—and that was when the economy was stronger.

“Generational change is scary,” wrote the content manager for one of the country’s largest newspaper-based websites, but “We have to live with it, embrace it, be excited for our children and our children’s children and the discoveries they will make.”

“I believe as long as there is news, there always will be a need for professional journalists and the standards they maintain,” wrote another. “Online journalism is already evolving beyond the limits of traditional newsrooms and yet the medium is still in its infancy.”

The Direction of Journalism
Design Your Own Chart

Source: PEJ/ONA 2008 Survey of ONA Members

When it came to the big question looming over the news industry today—future revenue streams—four in 10 respondents were “very confident” that online news would “find a profitable and self-sustaining revenue model.” Similar numbers (43%) were somewhat confident. Only 11% were “not too” confident.

But their comments reflected more stubborn optimism than a clear plan about the future. As the editor in chief of an engineering website and magazine put it, “It’s a difficult environment for journalists with the double whammy of the Internet changing the game and a god-awful economy. We soldier on.”

Confidence in Finding a Profitable Economic Model
Design Your Own Chart

Source: PEJ/ONA 2008 Survey of ONA Members

Indeed, most of these online journalists are pinning their hopes on advertising, even though the trajectory of advertising online is flattening and there are growing doubts about whether it will ever reach a scale that would underwrite the news. When asked what would likely be the most important form of revenue in three years, fully 65% named advertising. And a third specified display advertising, which to date has been the biggest source of online news revenue. But the total dollar amount remains very small with growth expected to slow considerably for 2008 and 2009. The going display ad rate per 1,000 viewers was a mere 26 cents in 2008, down by half from 2007.2

Which do you think will be the most important source for online revenue in 3 years?
Display Ads
Search Ads
Video Ads
Fees from aggregators
User Donations
No Answer

Another 19% named search advertising, which is on the rise but flows mostly to search engines like Google and Yahoo rather than news sites. And video ads, still in their infancy, but with little evidence yet of their success with either audiences or ad companies, were named by 14%.

Just a quarter of respondents, on the other hand, specified something other than advertising as the most important source of revenue in three years: 7% named subscription fees, 5% named aggregators, 3% named donations from members, and 9% offered a handful of unique suggestions such as providing content to hotels, selling documentary DVDs, setting up a press distribution service and even renting out space in the organization’s garage.

One reason these online journalists may imagine that advertising will be the key is that this is mainly what their sites are working on trying to develop. Fully 69% of respondents said their organizations are working “very actively” to develop new revenue streams. But the biggest area of that work (23%) was advertising.

Another 17% specified finding a way to monetize mobile content, video or RSS, much of which is tied to advertising as well.

New Streams of Revenue Being Explored
Monetizing mobile/RSS/Video/Text
Developing new websites/Niche websites
Ecommerce/Transaction Revenues
New content/Directories
Misc. Other
No Answer

Note: Based on those whose for-profit organization is very actively trying to develop new revenue streams [N=155]. Total may exceed 100% due to multiple responses.

These journalists are aware of the challenge. Far above anything else, economics, or as one respondent put it, “the imploding business model,” was the named (by 42% of respondents) as the biggest problem facing online journalism today.

One ONA member who helps administer content and video products explained, “I’m finding our company wants to lump Web ads into larger sales packages that are primarily for broadcast sponsorships. I’m also finding that the sales staff has no idea how to sell our product.”

And ideas out of the mainstream seemed even harder to come by. Few named such possibilities as directories (8%), sponsorships (7%), syndication (7%), or verticals (3%).
Not all new revenue streams are seen as good ventures. One ONA member expressed dismay at what their company is exploring—selling stories to product-specific websites like Home Depot or Lowe’s. “Companies want that content to make their sites more credible, but  . . . the news organization will become less credible because it will appear to be an endorsement of a product or service.”

And the biggest portion of all, 37%, either chose not to or could not specify what their company was doing to find new revenue.