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Overview

What now?

Inside news companies, the most immediate concern is how much revenue lost in recession the industry will regain as the economy improves.

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?

And with growing evidence that conventional advertising online will never sustain the industry, what progress is being made to find new revenue for financing the gathering and reporting of news?

The numbers for 2009 reveal just how urgent these questions are becoming. Newspapers, including online, saw ad revenue fall 26% during the year, which brings the total loss over the last three years to 41%.

Local television ad revenue fell 24% in 2009, triple the decline the year before. Radio was off 18%. Magazine ad pages dropped 19%, network TV 7% (and news alone probably more). Online ad revenue over all fell about 5%, and revenue to news sites most likely also fared much worse.

Only cable news among the commercial news sectors did not suffer declining revenue last year.

The estimates for what happens after the economy rebounds vary and even then are only guesses. The market research and investment banking firm Veronis Suhler Stevenson projects that by 2013, after the economic recovery, three elements of old media — newspapers, radio and magazines — will take in 41% less in ad revenues than they did in 2006.

For newspapers, which still provide the largest share of reportorial journalism in the United States, the metaphor that comes to mind is sand in an hourglass. The shrinking money left in print, which still provides 90% of the industry’s funds, is the amount of time left to invent new revenue models online. The industry must find a new model before that money runs out.

The losses are already enormous. To quantify the impact, with colleague Rick Edmonds of the Poynter Institute we estimate that the newspaper industry has lost $1.6 billion in annual reporting and editing capacity since 2000, or roughly 30%. That leaves an estimated $4.4 billion remaining. Even if the economy improves we predict more cuts in 2010.

Network news division resources are likely down from their peak in the late 1980s by more than half — which amounts to hundreds of millions of dollars — and new rounds of cuts came in the last 12 months. Local television is harder to gauge, but one estimate puts the losses in the last two years at over 1,600 jobs, or roughly 6%. Staffing at the Time and Newsweek since 1983 is down by 47%.1

So what about the new-media experiments growing around the country? There are certainly exciting things happening, from former journalists creating specialty news sites and community sites, to citizens covering neighborhoods, to local blogs and social media.

In 2009 Twitter and other social media emerged as powerful tools for disseminating information and mobilizing citizens such as evading the censors in Iran and communicating from the earthquake disaster zone in Haiti. The majority of Internet users (59%) now use some kind of social media, including Twitter, blogging and networking sites, according to a new PEJ/Pew Internet & American Life survey.

Citizen journalism at the local level is expanding rapidly and brimming with innovation. This year’s report includes a new study of 60 of the most highly regarded sites. The prospects for assembling sufficient economies of scale, audience and authority may be most promising at specialized national and international sites — efforts like ProPublica, Kaiser Health News and Global Post.

For all the invention and energy, however, the scale of these new efforts still amounts to a small fraction of what has been lost. While not all of the blogs and citizen efforts can be quantified, J-Lab, a project led by Jan Schaffer that studies new media, estimates that roughly $141 million of nonprofit money has flowed into new-media efforts over the last four years (not including public broadcasting). That is less than one-tenth of the losses in newspaper resources alone.

Michael Schudson, the sociologist of journalism at Columbia University, sees the promise of “a better array of public informational resources emerging. ” This new ecosystem will include different “styles” of journalism, a mix of professional and amateur approaches and different economic models — commercial, nonprofit, public and “university-fueled.”

Clay Shirky of New York University has suggested that the loss of news people is a predictable and perhaps temporary gap in the process of creative destruction. “The old stuff gets broken faster than the new stuff is put in its place,” he has written.

There is something important in these notions. As Schudson notes, the news industry became more professional, skeptical and ethical beginning in the 1960s. Many journalists think that sense of public good has been overtaken by a focus on efficiency and profit since the 1990s. In the collapse of those ownership structures, there is some rebirth of community connection and public motive in news.

Yet the energy and promise here cannot escape the question of resources. Unless some system of financing the production of content is developed, it is difficult to see how reportorial journalism will not continue to shrink, regardless of the potential tools offered by technology.

And as we enter 2010 there is little evidence that journalism online has found a sustaining revenue model. A new survey on online economics, released in this report for the first time, finds that 79% of online news consumers say they rarely if ever have clicked on an online ad.

There was certainly more talk of alternative approaches to advertising in the last year. Entrepreneur Steve Brill and others launched JournalismOnline.com, which offers news sites a mechanism for charging, but at this point it is more a possibility than a business reality. Rupert Murdoch announced discussions with Microsoft about higher payments for searching his content and insisted that everything his company produces would go behind pay walls. Columbia University produced a report that explored nonprofit and public funding sourcing and assessed the state of startup new media. The New York Times announced it was giving itself a year to figure out a way to charge for content to “get it really really right.” And more new-media startups were planned, a growing sign that as old media continues to shrink, the ecosystem is changing and some things are growing.

But if a new model is to be found it is hardly clear what it will be. Our survey, produced with the Pew Internet & American Life Project, finds that only about a third of Americans (35%) have a news destination online they would call a “favorite,” and even among these users only 19%2 said they would continue to visit if that site put up a pay wall.

In the meantime, perhaps one concept identifies most clearly what is going on in journalism: Most news organizations — new or old — are becoming niche operations, more specific in focus, brand and appeal and narrower, necessarily, in ambition.

Old media are trying to imagine the new smaller newsroom of the future in the relic of their old ones. New media are imagining the new newsroom from a blank slate.

Among the critical questions all this will pose: Is there some collaborative model that would allow citizens and journalists to have the best of both worlds and add more capacity here? What ethical values about news will settle in at these sites? Will legacy and new media continue to cooperate more, sharing stories and pooling resources, and if they do, how can one operation vouch for the fairness and accuracy of something they did not produce?

The year ahead will not settle any of these. But the urgency of these questions will become more pronounced. And ultimately the players may be quite different.

“I think the answer may come from places staffed by young people who understand the new technology and its potential and who have a passion for journalism,” said Larry Jinks, the highly regarded former editor and publisher who transformed the San Jose Mercury News a generation ago and who still sits on the board of the McClatchy Company.

Major Trends

In past years we have tried to identify major trends emerging in the coming year, and many of those still apply now. For 2010, we want to emphasize six points.

As we learn more about both web economics and consumer behavior, the unbundling of news seems increasingly central to journalism’s future. The old model of journalism involved news organizations taking revenue from one social transaction — the selling of real estate, cars and groceries or job hunting, for example, — and using it to monitor civic life — covering city councils and zoning commissions and conducting watchdog investigations. Editors assembled a wide range of news, but the popularity of each story was subordinate to the value, and the aggregate audience, of the whole. And the value of the story might be found in its consequence rather than its popularity. That model is breaking down. Online, it is becoming increasingly clear, consumers are not seeking out news organizations for their full news agenda. They are hunting the news by topic and by event and grazing across multiple outlets. This is changing both the finances and the culture of newsrooms. When revenue is more closely tied to each story, what is the rationale for covering civic news that is consequential but has only limited interest? The data also are beginning to show a shift away from interest in local news toward more national and international topics as people have more access to such information, which may have other effects on local dynamics.

The future of New and Old Media are more tied together than some may think. A new multi-university study released in this report finds that even the best new-media sites in the country still have limited ability to produce content. No doubt they will evolve. Yet their reportorial capacity ultimately still will depend on finding a revenue model far larger than what exists today or than is projected to come from conventional online advertising. While there are some competing values and different reportorial cultures, in the end new and old media face the same dilemma and may be much more aligned in their search for revenue than many have thought. In some cases, there will be formal alliances or networks of new and old media. One concept that will get more attention is collaborations of old media and citizens in what some call a “pro-am” (professional and amateur) model for news. Yet how traditional news organizations cope with such partnerships, the rules for what is acceptable and what is not, remain largely uncharted.

The notion that the news media are shrinking is mistaken. Reportorial journalism is getting smaller, but the commentary and discussion aspect of media, which adds analysis, passion and agenda shaping, is growing — in cable, radio, social media, blogs and elsewhere. For all the robust activity there, however, the numbers still suggest that these new media are largely filled with debate dependent on the shrinking base of reporting that began in the old media. Our ongoing analysis of more than a million blogs and social media sites, for instance, finds that 80% of the links are to U.S. legacy media. The only old media sector with growing audience numbers is cable, a place where the lion’s share of resources are spent on opinionated hosts. One result may be the rising numbers in polling data that show 72% of Americans feel now most news sources are biased in their coverage and 70% feel overwhelmed rather than informed by the amount of news and information they see. Quantitatively, argument rather than expanding information is the growing share of media people are exposed to today.

Technology is further shifting power to newsmakers, and the newest way is through their ability to control the initial accounts of events. For now at least, digital technology is shifting more emphasis and resources toward breaking news. Shrinking newsrooms are asking their remaining ranks to produce first accounts more quickly and feed multiple platforms. This is focusing more time on disseminating information and somewhat less on gathering it, making news people more reactive and less proactive. It is also leading to a phenomenon in which the first account from newsmakers — their press conferences and press releases — make their way to the public often in a less vetted form, sometimes close to verbatim. Those first accounts, sculpted by official sources, then can rapidly spread more widely now through the power of the Web to disseminate, gaining a velocity they once lacked. That is followed quickly by commentary. What is squeezed is the supplemental reporting that would unearth more facts and context about events. We saw this clearly in a study of news in Baltimore, but it is reinforced in discussions with news people. While technology makes it easier for citizens to participate, it is also giving newsmakers more influence over the first impression the public receives.

The ranks of self-interested information providers are now growing rapidly and news organizations must define their relationship to them. As newsrooms get smaller, the range of non-journalistic players entering the information and news field is growing rapidly. The ranks include companies, think tanks, activists, government and partisans. Some are institutions frustrated by the shrinking space in conventional media and the absence of knowledgeable specialists to cover their subjects. Others are partisans and political interests trying to exploit a perceived opportunity in journalism’s contraction. There are varying degrees of transparency in these efforts about the financing and intentions. Some are quite clear. Others present themselves as purely journalistic and independent when in fact they are funded by political activists, yet only by digging and cross-referencing websites can the agenda and financing be divined. In an age where linking and aggregation are part of journalism, news organizations must decide how they want to interact with this growing cohort of self-interested information players. Will they pick up this material and disseminate it? Can they possibly police it? Can they afford to ignore it? The only certainty is that these new players are increasingly vying for the public’s and the media’s attention, and their resources, in contrast to that of traditional independent journalism, are growing.

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. An analysis in this year’s report of online audience behavior, extrapolated from Nielsen Net Ratings data, finds that 80% of the traffic to news and information sites is concentrated at the top 7% of sites. The vast majority of the top news sites (67%), moreover, are still tied to legacy media financed largely by their shrinking end of the business.1 New media are growing, but their ranks among the most trafficked sites are still small. Another 13% of these news sites are aggregators, whose content is derived from legacy media. Only 14% of these sites are online-only operations that produce mostly original reportorial content rather than commentary. In short, the cutbacks in old media are drastically affecting not only traditional media but still significantly impact online content as well.

Key Findings

Audience

For the third consecutive year, only digital and cable news saw audiences grow among the key sectors that deliver news.

In cable in 2009, those gains were largely captured by one network, Fox, though during the day, a breaking-news time, CNN also gained viewers.

What’s more, the data continue to suggest a clear pattern in how Americans gravitate for news: people are increasingly “on demand” consumers, seeking platforms where they can get the news they want when they want it from a variety of sources rather than have to come at appointed times and to one news organization.

Online, an analysis of the list of Nielsen Net Ratings list of 4,600 news and information sites saw the collected number of unique visitors grow 9.25%, according to a PEJ analysis. But on that list the top sites tend to dominate. Of the 4,600 sites, the top 7% collect 80% of the traffic. And the top 20 sites attract the majority of that. Legacy media still make up the majority of the most popular destinations, although each year newly created websites are joining the list. Of the news sites with a half million visitors a month (or the top 199 news sites once consulting, government and information data bases are removed), 67% are from legacy media, most of them (48%) newspapers. And most people graze though among a limited number of sites. A new Pew Internet-PEJ survey finds only 21% say they tend to rely primarily on one destination for news online; only a third even say they have a favorite website. But these online news grazers do not range far. Most people, 57%, range from using two –to five websites, and only 11% use more than six.

The gains to cable news generated in the election of 2008 proved more ephemeral for some than others. Over all, median prime-time viewership for the three main news channels grew 7% to 3.88 million, while daytime rose 16% to 2.16 million. But those overall numbers are deceptive. At night, when cable is dominated by ideological talk shows, Fox grew by nearly a quarter to an average of 2.13 million viewers at any given moment. MSNBC rose 3% to 786,000, while CNN fell 15% to 891,000 viewers. In daytime, CNN was up 9% over 2008 to an average of 621,000 viewers. But Fox daytime viewership grew again by almost a quarter, to roughly twice CNN’s audience (1.2 million viewers). MSNBC, relying on NBC news people more than talk show hosts, fell 8% to 325,000 viewers.

Network news audiences in 2009, by contrast, continued their long decline. For the evening news programs, the rate of erosion appears to be slowing. Viewership for the year fell 2.5% (or 565,000 viewers), but that is about half the number of viewers on average lost annually in the evening over the last two decades. (The NBC Evening News actually gained viewers in 2009, while ABC’s World News Tonight lost the most heavily.) Still, over all, 22.3 million viewers tune in to network evening newscasts each weeknight at the dinner hour. That is more than five times the number watching cable news at any given moment during prime time, when more TV sets are in use. In the morning, 12.8 million people watch network morning shows. That figure, however, is down 2.4% from 2008, and marks the fifth year of decline.

Source: Arbitron, Audit Bureau of Circulations, comScore Media Metrix, Nielsen Media Research. 1

Local television news is now seeing rapid audience declines beyond those in network, and those numbers appeared to accelerate in 2009. According to PEJ analysis of Nielsen data, viewership of the late news fell an average of 6.5% in 2009, four times the rate of a year earlier. Early evening news, at the dinner hour, fell 5.5% (similar to 2008). And early morning news, the programs that air prior to network morning shows that have been an island of relative stability for audiences, fell by 6.1% on average.

Newspapers saw print circulation losses accelerate in 2009. In the latest period, September, industry-wide circulation fell 10.6% from a year earlier. That comes on top of losses of 4.6% in 2008. The industry has lost 25.6% in daily circulation since 2000. Those declines, however, pale by comparison to the loss in revenues, which represent a more significant problem.

Audio audiences are more stable. Fully 236 million Americans listened to at least some radio in an average week in the fall of 2009, a number that has been basically static for the past five years, and news/talk/information remains among the most popular formats. NPR’s audience in 2009 rose slightly, up 0.1%, from 2008. But new technology is encroaching on the amount of traditional radio use. More than 4 –in 10 Americans now say they listen to less terrestrial radio due to iPod/MP3 use, and nearly 1in 3 now say they listen to online radio

The magazine industry is also hard hit. Of the 472 consumer magazines for which comparable data were available from the Audit Bureau of Circulations, circulation fell 2.23% for the last six months of 2009 compared with the same period a year earlier. But the type of circulation that cannot be controlled through promotional discounts — single-copy, or newsstand, sales — fell 9%, on top of 11% a year earlier. Six news magazines tracked here, excluding U.S. News & World Report after its conversion to monthly, fell 8.2%.

In ethnic media, the results were again mixed. The two major Hispanic television broadcasters saw audience growth. While some Spanish-language newspapers were flat, others fell and some smaller publications flourished. The black press also saw circulation numbers moving in various directions.

Economics

In 2009, the recession only intensified the financial crisis that technology has brought to the news business. Every commercial news media sector saw revenue declines except for cable. Ad revenues were particularly hard hit. If estimates by ZenithOptimedia prove accurate, total U.S. ad spending fell 12.9% for the year, the sharpest drop since the Great Depression, although most news sectors saw declines close to double that.

In newspapers, ad revenue (for print and online combined) fell 26%, a rate of decline that was more than 50% steeper than a year earlier (16%). Even online ads fell, 10%, a far cry from the 35% growth rates of a few years ago. Papers responded by raising circulation prices, figuring the core audience would remain. With those numbers added in, total revenue for newspapers fell about 22% to a total of $38 billion.

In audio, traditional broadcast radio experienced an 18% drop in ad revenue in 2009 compared to 2008. Internet and mobile radio revenues are growing (a projected 9.4%), but they do little to alleviate the pressure – counting for less than one fortieth of total. In satellite radio, SiriusXM in 2009 increased its revenue 3.7%, compared with a year earlier, to 2.5 billion compared to 2008. The company, however, both before and after the merger, has continued to report net losses in each of the last three years. In 2009 SiriusXM posted a net loss of $441 million.

In magazines, the number of ad pages sold across all titles studied fell by 26% in 2009, more than double the decline of a year earlier (12%). Almost every magazine suffered. Only 8% of the nearly 250 titles monitored saw an increase in ad pages. Among news magazines, the larger ones were hard hit. Time and Newsweek, for instance, saw ad pages fall 17% and 26% respectively. Niche news magazines examined tended to do better, though even here, the only one to gain ad pages was the Week, up 9.5%.

Source: Cable: SNL Kagan; Online: eMarketer; Network: TNS Media Intelligence; Audio: Radio Advertising Bureau; Magazines: Publishers Information Bureau; Newspapers: Newspaper Association of America; Local TV: Television Bureau of Advertising 2

In local television, after an unprecedented ad revenue downturn for an election-Olympics year in 2008, declines accelerated in 2009. Ad revenue fell 24% from the year before. Most analysts predict a better 2010, buoyed by economic recovery, a Supreme Court decision overturning limits on campaign spending and a midterm election year. But those numbers will be pressured still by continuing declines in audience numbers and a wider range of advertising options.

Cable remained the outlier in 2009. Overall revenues for the three major players rose an estimated 5% thanks to subscription fees and audience growth. Ad revenue was flat, up less than 1%, but profits rose 9%. The channels’ particulars are more revealing. Fox saw profits grow 19% to $535 million on revenue growth of 14% to $1.21 billion, according to data from SNL Kagan. CNN and its sibling HLN saw profits rise 1% to $476 million on revenues that were down 1% to $1.18 billion. At MSNBC, profits rose 1% to $150 million, on revenues that were similar, up less than 1% to $368 million.

Online, advertising during the year declined for the first time since 2002, according to data from eMarketer. The firm’s updated August projections called for online ad spending to fall 4.6% to $22.4 billion. But some categories fared better than others. Search, which flows mostly to aggregators like Google, was projected to grow to 3% in 2009 to $10.8 billion, and by the end of the year, nearly half (48%) of the total online ad market was expected to be in search. But display advertising revenue, which news sites rely on, was expected to fall 2% to $4.8 billion. Even here, news does not get the greatest portion of revenue. Aggregators and internet service providers take in 28%. Newspaper websites get 5%, and other news and current-event sites less than 3%. Television websites, which include both news and entertainment material, get 6%. Another key ad category for news online, classified, is eroding in the face of free classifieds from places like Craigslist. Classified revenue was projected to plummet 31% to $2.2 billion in 2009. Accounting for 17% of online ad spending in 2003, classified are now just 9%.

Network news economics are harder to divine, but PEJ estimates that the three news divisions saw revenue declines in 2009, probably in double digits. Network ad revenue fell 7% over all. NBC now derives more than half of its news revenues from cable, and its single most important financial contributor is its financial cable news channel CNBC. PEJ estimates that CBS News did not turn a profit, and ABC managed to do so with cutbacks in 2009 and again in early 2010.

Ethnic media had a difficult year, although not as bad as some other quarters. For the 12 months ending June 2009, ad revenue for Spanish-language media fell by 6.3%, to $5.5 billion, according to estimates by Nielsen Media Research. But some segments fared better than others, and better their mainstream counterparts. Spanish-language television ad revenue, for instance, fell by just 2%, according to Nielsen data, compared with 8.3% for all television. Advertising revenue for local Hispanic newspapers fell to $88.6 million, or 20.3%, not quite as much as newspapers over all. Ad revenue to national Hispanic magazines fell by 17.5% to $146.7 million. Other ethnic media also had some bright spots. Black television ad revenue, for instance, rose 6.7%.

Online Economic Survey

A new survey by PEJ and Pew Internet and American Life Project finds a tough market for building economics on the Web.

The findings suggest there is a difficult hill to climb in putting content behind a pay wall. Most people graze the Web for news rather than rely on primary sources. Only about a third (35%) can even identify a favorite news website. And of those that do, only 19%3 said they would continue to visit if that site put up a pay wall.

The prospects for growth in conventional display advertising also look difficult. The vast majority of Internet users, 79%, say they never or rarely had clicked on an online advertisement. They don’t mind them. They simply ignore them.

News Investment

Newspaper staffs continued to shrink in 2009. We estimate with colleague Rick Edmonds that by year’s end 5,900 more full-time newsroom jobs were lost, disproportionately at larger papers, on top of a similar number in 2008. Roughly a third of the newsroom jobs in American newspapers in 2001 are now gone, and those cuts come particularly in specialty beats like science and the arts, suburban government and statehouse coverage.

In network television, the roster of journalists also continues to shrink. ABC News instituted three sets of cuts in the past year, NBC reportedly two, and CBS announced a big round in early 2010. We estimate that network news staffs had already been cut by roughly half from their peak in the 1980s.

At news magazines, the cutting continued as the publications moved farther, although not entirely, toward opinion journalism. Time’s ranks fell 20% more in 2009. U.S. News & World Report, in converting to a monthly print periodical, reduced its news staff by 38%. Newsweek cut about 9%. But the numbers over time reveal more. Time’s staff of 147 is less than half of the 304 it listed in 2003. Newsweek’s 150 is 15% less than the 176 in 2003, and 57% less than the 348 it listed in 1983.

Again, only cable, thanks largely to its reliance on subscriptions for half of its revenue, could claim more overall investment in newsgathering in 2009 than the year before, though those aggregate numbers are not true across the board. Fox News Channel’s estimated investment in news was up 10% to $674 million. Fox, however, spends 72% of that on producing its host-driven programs, including multimillion-dollar salaries. Only 28% goes to administrative and overhead costs, which include staffing and bureaus. That number, $188 million, is less than half of what is spent by CNN and HLN. Those two channel’s overall news investment fell for the first time in years in 2009, down 2.5% to $703.4 million. MSNBC, whose newsgathering is mostly borrowed from sibling NBC, was expected to spend roughly the same amount on newsgathering in 2009 as a year earlier, $218 million.

In local TV news, PEJ estimated that about 450 jobs were lost at stations in 2009, on top of 1,200 jobs lost in 2008. Despite staff reductions, the average amount of news increased to 4.6 hours, from 4.1 hours the previous year. Researcher Robert Papper estimates that local TV newsroom staffing peaked in 2007.

In audio, news plays an unusual role. The number of stations identified by Arbitron as news/talk/information rose in 2009 to 1,583, up from 1,533 in 2008. This category is broadly defined and includes a large amount of talk programming. But all-news stations make up a much smaller category. In 2009, there were just 27 commerical stations around the country that listed themselves as all news, down from 31 the year before. And even here the label is self-defined and may include talk or other less news-oriented programs. In commercial radio, local all-news stations now tend to be limited to only the largest markets.

Ownership

Perhaps the biggest news in media ownership in 2009 was the pending sale by General Electric and Vivendi of NBC Universal to the cable company Comcast. The sale includes NBC’s broadcast network, cable channels and company-owned local TV stations. This was the largest media merger since the combination of AOL and Time Warner in 2000, a union that since has broken apart. The $37 billion NBC deal, which is subject to approval by the Federal Communications Commission and the Justice Department, may not be completed until 2011.

Few newspapers (14) changed hands in 2009, and those that did were in special circumstances, often bankruptcy. On the other hand, the notion that newspapers in large numbers were going out of business was not true. In all only a half-dozen ceased to exist or cut back on daily print publication in 2009, and most of those were among the few remaining second papers in their markets. A number of companies, due to debt obligations, went into some form of bankruptcy and some passed to private equity owners, but newspaper stocks were up from their rock bottom prices of 2008.

In magazines, 41 acquisitions were made in 2009, compared with 42 a year earlier, according to tracking by the Jordan, Edmiston Group. One of the higher-profile sales of the year was Bloomberg’s purchase of BusinessWeek from McGraw-Hill in a deal reported to include $5 million in cash and the assumption of $31.9 million in debt. In another significant acquisition, the Economist Group purchased Congressional Quarterly from the Times Publishing Co., the owner of the St. Petersburg Times. Times Publishing is owned by the Poynter Institute.

In local TV, the ownership landscape was also difficult and transactions limited. A few station owners sought bankruptcy protection and still others showed signs of trouble. Station sales transactions were up in 2009, both in number and dollar value, although most of that activity was the result of bankruptcy auctions or sales of distressed properties. According to one accounting, there were 76 station transactions in 2009, with a total value of $715 million. This compared with 46 in all of 2008 for a value of $537 million. Investors had trouble getting credit for acquisitions and station values were down throughout 2009.

  1. The cable figure is based on PEJ’s analysis of Nielsen Media Research data. It represents the combined median total day viewership (individuals 2 and older) of CNN, MSNBC and Fox News. The online figure is based on PEJ’s analysis of Nielsen Online figures from Nielsen’s NetView Tool. It represents average unique visitors to sites in Nielsen’s News and Information category from 2008 and 2009. The network figure is based on PEJ’s analysis of Nielsen Media Research data. It represents the mean evening news viewership (individuals 2 and older) of NBC, CBS and ABC. The local TV figure is based on PEJ’s analysis of Nielsen Media Research data. It represents the mean evening news viewership (individuals over the age of 2) for ABC, CBS, Fox and NBC affiliates. The magazine figure is based PEJ’s analysis of circulation data provided by the Audit Bureau of Circulations. It represents the average circulation for the six months ending December 31, 2009, compared to the same period of 2008, for six news magazines studied by PEJ: Time, Newsweek, The Economist, The Atlantic, The Week, and the New Yorker. The newspaper figure is based on circulation data provided by the Audit Bureau of Circulations. It represents average circulation for 400 U.S. newspapers during a six-month period ending September 30, 2009, compared to the same period a year earlier.
  2. Cable figures are based on estimated combined ad revenues for CNN/HLN, Fox News Channel and MSNBC for 2008 and 2009, provided by SNL Kagan, a division of SNL Financial LLC. Online figures are total online display ad revenues, from January to September 2009, compared with the same period in 2008, provided by eMarketer. Network figures are based on revenue estimates for network television ads from January to September 2009, compared with the same period in 2008, provided by the Television Bureau of Advertising. Radio figures are based on AM/FM advertising revenues from January 2009 to January 2010, compared with the same period in 2008-2009, provided by the Radio Advertising Bureau. Magazine figures are based on ad pages sold – not revenue – provided by the Publishers Information Bureau for six news magazines: Time, Newsweek, The Economist, The Atlantic, The Week, and The New Yorker. Newspaper estimates are derived by Rick Edmonds of the Poynter Institute based on data provided by the National Newspaper Association. Local TV figures are based on revenue estimates for local and national spot advertising on local TV from January to September 2009, compared with the same period in 2008, provided by the Television Bureau of Advertising.

Authors Note

This report each year attempts to analyze the major sectors of the news media in depth and to look across those different elements of the news media to see broader trends.

For each of the nine sectors studied, we examine developments in five different distinct areas—audience, economics, newsroom investment, ownership and digital journalism—and, often, alternative outlets as well. We aggregate as much publicly available data as possible in one place and include original content analysis. In addition to numerous new charts of data, most compilations from earlier reports are updated and still available.

Our goal is to be a resource for the public, journalists, students, academics, those in government and those who want to use the news culture to communicate. People can approach the material in this report in several ways. They can go directly to the medium about which they are most concerned — say, local television news — and drive vertically through it. Or they can focus on a particular issue — audience trends, for example — and move horizontally across different media sectors. They can move across the introductory overviews of each sector. They can flip back and forth between our narrative and the interactive charts. And this year, they can interact with the data themselves through our two new interactive databases, answering their own questions, in effect creating their own reports.

Our desire in this study is to answer questions we imagine any reader would find important, to help clarify the strengths and weaknesses of the available data, and to identify what is not yet answerable.

The study is the work of the Pew Research Center’s Project for Excellence in Journalism, a nonpartisan and nonpolitical institute that studies the information revolution. PEJ is one of seven initiatives that make up the Pew Research Center in Washington, D.C. The center and this work are funded by the Pew Charitable Trusts. The chapters were written by the Project’s staff, with the exception of the chapters on newspapers and online, which were co-authored. All of the chapters also benefit from the input of teams of readers who are experts in each media sector.

Our aim is a research report, not an argument. Where the facts are clear, we hope we have not shied from explaining what they reveal, making clear what is proved and what is only suggested. We hope that we are not seen as taking sides. Our intention is to inform, not to persuade, and where we interpret data to draw conclusions, our goal is to do so in a way that is fully supported by the data, and only when those data are clear.

We have tried to be as transparent as possible about sources and methods, and to make it clear when we are laying out data and when we have moved into analysis of it. We have attempted, to the best of our ability and within the limits of time, to seek out multiple sources of information for comparison where they exist. Each year we hope to gather more sources, improve our understanding and refine our methodology.

Our approach — looking at a set of questions across various media — differs from the conventional way in which American journalism is analyzed, one medium at a time. We have tried to identify cross-media trends and to gather in one place data that are usually scattered across different sites. We hope this will allow us and others to make comparisons and develop insights that otherwise would be difficult to see.

Press Alert

Press Alert

Declines in News Audience, Revenue, Reporting –
And A Grim Picture for Economic Models for Online News

March 15, 2010—The losses suffered in traditional news gathering in the last year were so severe that by any accounting they overwhelm the innovations in the world of news and journalism, according to a new report from the Pew Research Center’s Project for Excellence in Journalism.

There is tremendous energy in efforts around the country to do journalism in the digital age, PEJ’s State of the News Media 2010 finds, and many of these efforts are bringing a renewed sense of public mission to the news.

But the cutbacks in traditional media dominate. Newspapers now spend $1.6 billion less annually on reporting and editing than they did a decade ago, the report estimates. Network TV is down by hundreds of millions since their peak in the 1980s. Local TV newsrooms are cutting too, down 6% in the last two years, some 1,600 jobs. Only cable news, among the commercial news sectors, did not suffer declining revenue and layoffs last year.

By comparison, the non-profit contributions flowing to these new media efforts since 2006 amount to about $141 million, according to estimates by the group J-Lab. While that number does not include the many efforts that are operating without grants or are coming from legacy media, it offers some sense of scale.

“Last year was significantly harder on the news industry even than 2008, and the report predicts still more cutbacks in 2010, even with an improving economy,” PEJ Director Tom Rosenstiel said. “And while there is more discussion of alternative ways of financing the news, there is not yet much concrete progress.”

Three questions now drive discussions about the future of journalism: How much lost revenue might come back as the economy improves? How much journalistic potential exists in alternative new media operations? And what progress was made in new revenue models online? The answers are not yet all that promising, according to the comprehensive study of the State of the News Media, the seventh in a series of annual efforts by PEJ to take stock of the revolution occurring in news and information in the United States.

Among the study’s key findings:

Grim revenue numbers in 2009: Newspapers saw ad revenue fall 26%, while local television saw a 22% drop in 2009 — triple the decline the year before. Radio was down 22%; magazine, 17%; network TV, 8%. Online ad revenue overall fell about 5%. Cable news was the lone commercial news sector to be spared a drop in revenue. Nearly half of the 37 publicly traded media companies for which there are current data lost money in 2009, according to PEJ’s analysis of media ownership and industry data

Online news consumers resistant to ads and “pay walls.” Fully 79% of online news consumers say they have never or only rarely clicked on an online ad, according to a new survey included in this year’s State of the News Media report that examines the potential for online revenue models. The prospects for “pay walls” are daunting as well: only 35% of online news consumers can identify a “favorite” news website, and of this most likely group that might pay for the content, only 19% said they would continue to visit the favorite site if they had to pay for it.

Top news sites garner most traffic. Of the 4,600 news sites Nielsen tracks, the top 7% get 80% of the traffic, according to a new analysis of news web sites based on Nielsen NetRatings data. Of the top roughly 200 news sites, legacy media are heavily represented, accounting for 67%. Another 13% are aggregators, such as Google News, primarily of legacy content, while 14% are online-only sites that produce original content. The average visit to an online news site is three minutes and four seconds long, but a visit to the New York Times website averages more than a minute longer than a visit to an aggregator site. And contrary to what some might expect about consumers engaging more closely with their favorite topics, people spend about half as much time per month on niche news sites as they do on those focused on general interest news.

A broad range in content and depth in community journalism. A new study of community journalism sites finds that the best sites can vary widely in their values and norms — even among those run by former journalists. Highly regarded sites produce more new content than community sites overall, but they are still limited in capacity. Only 43% of the sites were likely to produce a new piece of lead content each day. Fewer than a third of these select sites allowed citizens to post news or feature stories, information about community events or photographs. Just 2% allowed videos to be uploaded.

Most sectors have seen continued audience declines. For the third consecutive year, only digital and cable news saw audiences grow among the key sectors that deliver news. In cable in 2009, those gains were largely captured by one network, Fox; though during the day, a breaking-news time, CNN also gained viewers. Local TV news, which surveys show Americans most rely on for news, is now seeing audience declines beyond those in network news — and they are across all day parts and all metrics, according to PEJ’s analysis of audience data.

The economy and health care topped the 2009 mainstream news agenda. While PEJ’s analysis of the Year in the News finds the economy was the top story of 2009, in the second half of the year it was outdistanced by the health care debate — and that was led by talk radio and cable news. In the third quarter, talk radio devoted 41.9% of its time to health care. Cable news spent 29.8% of its time on the subject. Meanwhile, bloggers and social media often had a different news agenda. The top linked-to news story among bloggers matched the top story in the mainstream press just 13 out of 47 weeks studied. On Twitter, the top story was even less likely to be the same — just four of the 27 weeks studied, or less than one-sixth of the time. But the traditional media play a large role in the blogosphere. American legacy outlets like newspapers and broadcast networks accounted for 80% of all linked-to stories on blogs.

In addition to these findings, PEJ’s 2010 State of the News Media report analyzes the state of each of the major media sectors and includes two new special interactive features.

The Who Owns the News Media database, which allows users to compare companies by various indicators, explore each media sector and read profiles of individual companies

Year in the News Interactive, which allows users nearly to explore PEJ’s comprehensive content analysis of media performance based on 68,000 stories from 2009

The report is the work of the Pew Research Center’s Project for Excellence in Journalism, a nonpolitical, nonpartisan research institute. The study is funded by The Pew Charitable Trusts and was produced with the help of a number of collaborators, including Rick Edmonds of the Poynter Institute and a host of industry readers.

A PDF of the complete executive summary is available here.

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