In 2012, a continued erosion of news reporting resources converged with growing opportunities for those in politics, government agencies, companies and others to take their messages directly to the public.
Signs of the shrinking reporting power are documented throughout this year’s report. Estimates for newspaper newsroom cutbacks in 2012 put the industry down 30% since 2000 and below 40,000 full-time professional employees for the first time since 1978. In local TV, our special content report reveals, sports, weather and traffic now account on average for 40% of the content produced on the newscasts studied while story lengths shrink. On CNN, the cable channel that has branded itself around deep reporting, produced story packages were cut nearly in half from 2007 to 2012. Across the three cable channels, coverage of live events and live reports during the day, which often require a crew and correspondent, fell 30% from 2007 to 2012 while interview segments, which tend to take fewer resources and can be scheduled in advance, were up 31%. Time magazine, the only major print news weekly left standing, cut roughly 5% of its staff in early 2013 as a part of broader company layoffs. And in African-American news media, the Chicago Defender has winnowed its editorial staff to just four while The Afro cut back the number of pages in its papers from 28-32 in 2008 to around 16-20 in 2012. A growing list of media outlets, such as Forbes magazine, use technology by a company called Narrative Science to produce content by way of algorithm, no human reporting necessary. And some of the newer nonprofit entrants into the industry, such as the Chicago News Cooperative, have, after launching with much fanfare, shut their doors.
This adds up to a news industry that is more undermanned and unprepared to uncover stories, dig deep into emerging ones or to question information put into its hands. And findings from our new public opinion survey released in this report reveal that the public is taking notice. Nearly one-third of the respondents (31%) have deserted a news outlet because it no longer provides the news and information they had grown accustomed to.
At the same time, newsmakers and others with information they want to put into the public arena have become more adept at using digital technology and social media to do so on their own, without any filter by the traditional media. They are also seeing more success in getting their message into the traditional media narrative.
So far, this trend has emerged most clearly in the political sphere, particularly with the biggest story of 2012—the presidential election. A Pew Research Center analysis revealed that campaign reporters were acting primarily as megaphones, rather than as investigators, of the assertions put forward by the candidates and other political partisans. That meant more direct relaying of assertions made by the campaigns and less reporting by journalists to interpret and contextualize them. This is summarized in our special video report on our Election Research, only about a quarter of statements in the media about the character and records of the presidential candidates originated with journalists in the 2012 race, while twice that many came from political partisans. That is a reversal from a dozen years earlier when half the statements originated with journalists and a third came from partisans. The campaigns also found more ways than ever to connect directly with citizens.
There are signs of this trend that carry beyond the political realm, as more and more entities seek, by various means, to fill the void left by overstretched editorial resources. Business leaders in Detroit, Mich., for example, have created an organization to serve as a kind of tour guide to journalists with the goal of injecting more favorable portrayals of the city into media coverage. The government of Malaysia was recently discovered to have bankrolled propaganda that appeared in several major U.S. outlets under columnists’ bylines. A number of news organizations, including The Associated Press, recently carried a fake press release about Google that came from a PR distribution site that promises clients it will reach “top media outlets.” And recently, journalist David Cay Johnston in writing about a pitch from one corporate marketer that included a “vacation reward” for running his stories, remarked, “Journalists get lots of pitches like this these days, which is partly a reflection of how the number of journalists has shriveled while the number of publicists has grown.” Indeed, an analysis of Census Bureau data by Robert McChesney and John Nichols found the ratio of public relations workers to journalists grew from 1.2 to 1 in 1980 to 3.6 to 1 in 2008—and the gap has likely only widened since.
In circumventing the media altogether, one company, Contently, connects thousands of journalists, many of them ex-print reporters, with commercial brands to help them produce their own content, including brand-oriented magazines. In early March, Fortune took that step, launching a program for advertisers called Fortune TOC—Trusted Original Content—in which Fortune writers, for a fee, create original Fortune-branded editorial content for marketers to distribute exclusively on their own platforms.
Efforts by political and corporate entities to get their messages into news coverage are nothing new. What is different now—adding up the data and industry developments—is that news organizations are less equipped to question what is coming to them or to uncover the stories themselves, and interest groups are better equipped and have more technological tools than ever.
While traditional newsrooms have shrunk, however, there are other new players producing content that could advance citizens’ knowledge about public issues. They are covering subject areas that would have once been covered more regularly and deeply by beat reporters at traditional news outlets—areas such as health, science and education. The Kaiser Family Foundation was an early entrant with Kaiser Health News. Now others, such as Insidescience.org, supported by the American Institute of Physics and others, and the Food and Environment Reporting Network with funding from nonprofit foundations are beginning to emerge. In the last year, more news outlets have begun to carry this content with direct attribution to the source. The Washington Post, for example, regularly carries articles bylined by Kaiser Health News and NBC.com runs Insidescience.org stories with a lead-in identifying the source.
For news organizations, distinguishing between high-quality information of public value and agenda-driven news has become an increasingly complicated task, made no easier in an era of economic churn.
This is the tenth edition of the State of the News Media produced by the Pew Research Center’s Project for Excellence in Journalism. Among the features this year are a special report on changes in television news; a special video report on lessons of the 2012 election; a new public opinion survey on how people get news from friends and family—and what they do next; a special survey on public awareness of the financial struggles facing the industry; a close look at African American news media, and an infographic that visually displays the overview and key trends. The chapters on each sector of the news industry contain two parts, a Summary Essay and a separate section called By the Numbers, where all the statistical information is more easily searchable.
Looking across these chapters, we identify six major trends of the year:
The effects of a decade of newsroom cutbacks are real – and the public is taking notice. Nearly a third of U.S. adults, 31%, have stopped turning to a news outlet because it no longer provided them with the news they were accustomed to getting. Men have left at somewhat higher rates than women, as have the more highly educated and higher-income earners—many of those, in other words, that past Pew Research data have shown to be among the heavier news consumers. With reporting resources cut to the bone and fewer specialized beats, journalists’ level of expertise in any one area and the ability to go deep into a story are compromised. Indeed, when people who had heard something about the financial struggles were asked which effect they noticed more, stories that were less complete or fewer stories over all, 48% named less complete stories while 31% mostly noticed fewer stories. Overall, awareness of the industry’s financial struggles is limited. Only 39% have heard a lot or some. But those with greater awareness are also more likely to be the ones who have abandoned a news outlet.
The news industry continues to lose out on the bulk of new digital advertising. Two new areas of digital advertising that seemed to bring promise even a year ago now appear to be moving outside the reach of news: mobile devices and local digital advertising. Over all, mobile advertising grew 80% in 2012 to $2.6 billion. Of that, however, only one ad segment is available to news: display. While mobile display is growing rapidly, 72% of that market goes to just six companies—including Facebook, which didn’t even create its first mobile ad product until mid-2012. Local digital advertising, a critical ad segment for news as the majority of outlets cater to a local audience, is also growing—22% in 2012. But improved geo-targeting is allowing many national advertisers to turn to Google, Facebook and other large networks to buy ads that once might have gone to local media. In addition, Google and Facebook are also improving their ability to sell ad space to smaller, truly local, advertisers, again taking business that once went to local media. It is hard to see how news organizations will secure anything like their traditional share. Google is now the ad leader in search, display and mobile. Once again, in key revenue areas, it appears the news industry may have been outflanked by technology giants.
The long-dormant sponsorship ad category is seeing sharp growth. This is one area of growing digital ad revenue where news organizations have taken early steps to move in. Promoted tweets on Twitter account for some of the growth, along with the rise of native ads—the digital term for advertorials containing advertiser-produced stories—which often run alongside a site’s own editorial content. Though it remains small in dollars, the category’s growth rate is second only to that of video. Sponsorship ads rose 38.9%, to $1.56 billion; that followed a jump of 56.1% in 2011. Traditional publications such as The Atlantic and Forbes, as well as digital publications BuzzFeed and Gawker, have relied on native ads to quickly build digital ad revenues, and their use is expected to spread. According to tech website PandoDaily, major publishers including Hearst, Time and Condé Nast are investing in formats to run native ads, as are many newspapers. The development, however, runs the risk of confusing readers about the difference between advertising and news content. In January, The Atlantic found itself rapidly taking down from its website a vaguely identified advertorial from the Church of Scientology, explaining afterward: “We now realize that as we explored new forms of digital advertising, we failed to update the policies that must govern the decisions we make along the way. It’s safe to say that we are thinking a lot more about these policies after running this ad than we did beforehand.”
The growth of paid digital content experiments may have a significant impact on both news revenue and content. After years of an almost theological debate about whether digital content should be free, the newspaper industry may have reached a tipping point in 2012. Indeed, 450 of the nation’s 1,380 dailies have started or announced plans for some kind of paid content subscription or pay wall plan, in many cases opting for the metered model that allows a certain number of free visits before requiring users to pay. (The trend has also spread beyond newspapers, as highlighted by popular blogger Andrew Sullivan’s recent decision to attach a fee to his site, The Dish.) With digital ad revenue growing at an anemic 3% a year in the newspaper industry, digital subscriptions are seen as an increasingly vital component of any new business model for journalism—though, in most cases, they fall far short of actually replacing the revenue lost in advertising. Thanks in good part to its two-year-old digital subscription program, The New York Times reports that its circulation revenue now exceeds its advertising revenue, a sea change from the traditional revenue split of as much as 80% advertising dollars to 20% circulation dollars. Going forward, many news executives believe that a new business model will emerge in which the mix between advertising and circulation revenue will be close to equal, most likely with a third leg of new revenues that are not tied directly to the news product. The rise of digital paid content could also have a positive impact on the quality of journalism as news organizations strive to produce unique and high-quality content that the public believes is worth paying for. That goal is in keeping with the philosophy of Clark Gilbert, the chief executive of the Deseret News Publishing Company and digital innovator. A staunch advocate of news organizations focusing editorial muscle in key areas where they can bring real value and distinction, Gilbert told the Pew Research Center that in the digital age, news outlets have to be differentiated. “Invest where you can be the best in the world,” he explained.
While the first and hardest-hit industry, newspapers, remains in the spotlight, local TV finds itself newly vulnerable. Local TV audiences were down across every key time slot and across all networks in 2012. And the off-peak news hours like 4:30 a.m. that stations had been adding for years seem to have hit their audience ceiling. While local TV remains a top news source for Americans, the percentage is dropping—and dropping sharply among younger generations. Regular local TV viewership among adults under 30 fell from 42% in 2006 to just 28% in 2012, according to Pew Research survey data. What’s more, the topics people go there for most—weather and breaking news (and to a lesser extent traffic)—are ripe for replacement by any number of web- and mobile-based outlets. While many stations ramped up their digital news offerings in the past year, they are late to the digital game. Advertising revenues were up for the year, but that was largely due to a windfall of $2.9 billion in political advertising revenue, something that cannot be replicated in non-election years. Over all, average revenue for news-producing stations declined by more than a third (36%) from 2006 to 2011.
Hearing about things in the news from friends and family, whether via social media or actual word of mouth, leads to deeper news consumption. A majority of Americans seek out a full news story after hearing about an event or issue from friends and family, a new Pew Research survey released here finds. For nearly three-quarters of adults (72%), the most common way to get news from friends and family is by having someone talk to them—either in person or over the phone. And among that group, close to two-thirds (63%) somewhat or very often seek out a news story about that event or issue. Social networking is now a part of this process as well: 15% of U.S. adults get most of their news from friends and family this way, and the vast majority of them (77%) follow links to full news stories. Among 18-to-29 year-olds, the percentage that primarily relies on social media for this kind of news already reaches nearly one-quarter. And the growing practice of dual-screening major news events adds more opportunity to share news electronically. Friends and family are still just one part of most consumers’ news diets –and a smaller part than going directly to news outlet themselves, as an earlier Pew Research study revealed.
Digital News Consumption: The clearest pattern of news audience growth in 2012 came on digital platforms, and the proliferation of digital devices in peoples’ lives seemed to be a big part of the reason.
In 2012, total traffic to the top 25 news sites increased 7.2%, according to comScore. And according to Pew Research data, 39% of respondents got news online or from a mobile device “yesterday,” up from 34% in 2010, when the survey was last conducted.1
Some 31% of adults owned a tablet computer as of 2013, almost four times the share recorded in May 2011. Pew Research also found that web-enabled smartphones are even more widespread: As of December 2012, about 45% of adults owned a smartphone, up from 35% in May 2011.
Accessing news is one of the most popular uses for the devices, enabling Americans to get news whenever they want and wherever they might be. An August 2012 Pew Research study found that fully 64% of tablet owners say they get news on their devices weekly; 37% reported they do so daily. The trend is nearly identical for smartphone owners – 62% said they consume news on their device weekly, and 36% do so daily.
When it comes to news people hear from friends and family, social media are playing a growing role, especially among young people, according to a Pew Research survey released in this year’s report, though it is still far from replacing traditional word of mouth. Nearly three-quarters, 72%, say the most common way they hear about news events from family and friends is by talking in person or over the phone. But 15% get most news from family and friends through social media sites. And it rises to nearly a quarter among 18-to-25-year-olds. Seven percent do so via e-mail. Either way, the vast majority say they then seek out news stories to learn more.
Digital Economics: Overall digital advertising grew 17% in 2012 to $37.3 billion, according to eMarketer. Digital advertising makes up around 23% of the total U.S. advertising market, up from 20% in 2011. Display advertising (which is made up of banner ads, video, rich media and sponsorships), the main source of digital ad revenue for news, grew 22% to $15 billion in 2012. While display is still the second-largest type of digital advertising, behind search, eMarketer projects that by 2016 display will outpace search. The majority of that digital revenue was scooped up by the powerful stakeholders in the digital arena—companies such as Google and Facebook.
These powerful tech entities are also quickly moving into the mobile realm—and into mobile display. Mobile ads grew 80% in 2012. At $2.6 billion, mobile now accounts for roughly 7% of total digital ad spending. eMarketer projects it will hit 21% by 2016. Mobile display is also growing, but here again, the big tech firms have swooped in. The top six account for 72% of all mobile display. And Facebook, which did not even create its first mobile-only ad feature until the summer of 2012, reported that mobile display accounted for 23% of its ad revenue in the fourth quarter of 2012. The question for news organizations is whether they can carve out a small but competitive space in the digital ad market.
One piece of that market that news can exploit is sponsorship advertising, and in 2012, so-called native advertising (a type of sponsorship ad) made headlines. Though it remains small in dollars, the category’s growth rate is second only to that of video: sponsorship ads rose 38.9%, to $1.56 billion; that followed a jump of 56.1% in 2011. Traditional publications such as The Atlantic and Forbes, as well as digital publications BuzzFeed and Gawker, have relied heavily on native ads to quickly build digital ad revenues, and their use is expected to spread.
African American Digital Audience: Social media in particular may offer new opportunities for African American news media, the ethnic media sector studied as a part of this year’s report. While African Americans still access the internet at lower rates than the white population (70% of African Americans say they use the internet, compared to 81% of non-Hispanic whites), those on the internet are more likely than whites and the population over all to use social networks, according to 2012 surveys from Pew Research. For example, 69% of blacks on the internet use Facebook, compared to 65% of non-Hispanic whites and 66% over all. Twitter has similar usage rates (26% of blacks vs. 14% of non-Hispanic whites and 16% overall), as does Instagram (23% of blacks vs. 11% of non-Hispanic whites and 13% over all).
The fortunes of some legacy media sectors changed direction somewhat in 2012. The network TV audience gains of a year before seemed to be ephemeral. And local TV ratings saw a steep decline after a stable 2011. Newspapers, on the other hand, managed to stem their circulation losses.
Cable: There were signs in 2012 that there is a ceiling for the cable news audience. Even in a presidential election year, which in the past has played to cable’s strengths, total median viewership increased only 1% across the three main news channels to 1.9 million, according to Nielsen Media Research. Daytime viewership increased by 2% and prime-time viewership by 3% over 2011 levels, though the evening audience was smaller than that of 2008, the last presidential election year.
CNN struggled the most, losing 4% of its prime-time audience, with median viewership levels (626,000) little more than half of what they were four years earlier, a problem that incoming CNN Worldwide president Jeff Zucker began working aggressively to repair when he arrived in January 2013. Fox News Channel was flat in prime time at 1.9 million viewers. MSNBC, now consistently the No. 2 news channel, took in 818,000 viewers in a typical evening, up 6%. It also surpassed CNN for the first time in two key ratings metrics—daytime viewership and total day viewership.
Audio: In general, listening to content seems to be as popular as ever and accessible in more formats than ever. But the data suggest that in the broader array of audio platforms news is becoming a smaller piece of the pie. A Pew Research study found that one-third of Americans said they listened to news radio “yesterday,” down from more than half of the population in 1990. Drive-time—once the premier domain of terrestrial radio—is becoming overtaken by mobile devices. The number of cellphone owners streaming content into their cars from their phones has nearly tripled in three years, according to Arbitron. Many of the streaming options do not even include the top-of-the-hour news headlines that air on most AM/FM stations.
Public radio also is undergoing transition as more people adopt mobile technologies. NPR again saw a drop in traditional AM/FM audience, but had big gains in mobile during 2012—more than 3 million new downloads of its news apps, according to data provided by the organization.
Magazines: All of the major news magazines saw declining audiences in 2012. According to the Alliance for Audited Media, sales of newsstand copies, the measure most accepted by the industry, plummeted 16% on average for the news magazines, roughly two times the 8.2% decline in newsstand sales that the magazine industry suffered over all. Time was the hardest hit, plummeting 27%. Newsweek, on the other hand, declined just 5% in the final year of its print version. Niche publications also saw declines in 2012: 17% at The Economist, 18% at The Week and 12% at The New Yorker. The Atlantic’s 7% drop looked good only by comparison.
Subscriptions were stable, as they have been in years past. But these are normally kept from declining through discounts or special offers. Time was the only one of the six publications to see a drop (1%), the Alliance for Audited Media found.
When subscriptions and newsstand sales are combined into a single circulation number, Time posted a 1.7% drop in 2012 to just under 3.3 million copies, the greatest drop in the group of news magazines. Newsweek appeared to have stopped its five-year slide, keeping its total circulation at 1.5 million copies. The Atlantic enjoyed the largest percentage gain among the six news magazines in 2012, an increase of almost 5%, to 485,000 copies – though it remains the smallest of the group in total numbers.
Network: The out-of-character ratings gains of 2011 were erased in 2012 for network TV news. In the evening, an average of 22.1 million people watched one of the three commercial broadcast news programs on ABC, CBS or NBC, a 1.9% decrease over the average viewership the year before, according to Nielsen Media Research. CBS Evening News was the one evening news broadcast to increase viewership in 2012, but it was still in third place behind NBC Nightly News and ABC World News.
In the morning, an average of 12.6 million viewers tuned in to a network television news program, a decrease of 4% from 2011. NBC’s Today Show, long the top-watched morning news show, fell into second place in April 2012 when Good Morning America overtook it in viewership. Apart from ABC’s 20/20 and NBC’s Dateline Sunday, all news magazines lost viewers in 2012.
Local TV: Local television news on the air suffered a reversal of fortune in 2012, losing audience in every key time slot, including those hours that gained viewers the year before. The average loss for ABC, CBS, Fox and NBC stations across the three key time slots—morning, early evening and late—was more than 6%.
The nontraditional early-morning news slots grew some but at much smaller rates than a year ago. At 4:30 a.m., viewership increased 13% to 2.6 million, though that was significantly less than the 330% increase the year before. Viewership at 4 a.m. increased by 19% on average, to 200,000. Though these time slots are growing, they attract far fewer viewers than some of the most popular hours for local TV. Late-night news programs, for instance, averaged 24.2 million viewers in 2012.
Newspapers: After years of decline, total daily circulation in 2012 stayed even with 2011, falling only 0.2%, according to an estimate by Rick Edmonds of the Poynter Institute. Much of this is tied to new digital pay plans. Sunday circulation rose 0.6% thanks to more generous audience accounting rules and an industry-wide marketing emphasis on growing Sunday print, the best-read and most profitable paper of the week.
African American: Four of the five audited black newspapers studied here lost circulation in 2012. The New York Amsterdam News was the only one to grow, by 11%, for the six months ending September 2012 compared with the same period the year before. The Afro-American, on the other hand, saw both its Baltimore and Washington editions lose circulation in 2012. The Washington Afro plummeted by almost half, 49%, and the Baltimore Afro declined by 7%. The Chicago Defender, one of the country’s first black-owned newspapers, declined 8% and The Philadelphia Tribune, an even older publication, fell 11% (for its Tuesday edition) in 2012.
African American magazines had a few more bright spots. Johnson Publishing’s Ebony increased 2% in circulation in 2012, while its other magazine, Jet, fell 9% in 2012. Uptown, a magazine geared toward affluent black readers, saw a slight 0.5% dip in its circulation. Black Enterprise, a business magazine, had a circulation increase of 4%.
Financially, the two legacy print platforms—newspapers and magazines—continued to see revenue declines in 2012, while gains in television mask longer-term challenges. And digital experienced weaker gains than in 2011.
Magazines: The print advertising environment for news magazines in 2012 was grim, though for at least some publications, digital ad revenue gained momentum.
Combined ad pages for the six magazines studied in this report were down 10% in 2012, about twice the rate of decline in 2011, according to the Publishers Information Bureau. Hardest hit was The Week, which suffered a 24.5% drop in ad pages. The Atlantic, The Economist and Time all fell about 12%, while The New Yorker managed to keep its ad pages losses in single digits (6%). Newsweek’s ad pages increased for the first time since 2006 (though they still remained below the 2006 level). At least at The Atlantic, though, strong expectations are being placed on digital. Its president, M. Scott Havens, said that in 2012, digital ad revenues bested print ads for the first time ever.
Newspapers: Advertising revenues continued their long slide in 2012, with print revenue dipping under $20 billion, according to figures by the Newspaper Association of America, as well as estimates by Pew Research and the Poynter Institute’s Rick Edmonds. Print ad revenue losses continued to far exceed digital ad gains. The newspaper association figures show that in 2012, for every $16 in print ad revenue lost, only $1 in digital ad revenue was gained. That was even worse than the $10-to-$1 ratio in 2011.
Circulation revenue, though, has remained relatively stable for close to two decades, at around $10 billion in 2011, according to the Newspaper Association of America. Some companies are instituting aggressive newsstand and subscription price increases, losing volume, but adding to circulation revenue.
Audio: Election-year advertising dollars kept the AM/FM industry above water in 2012. But this heavy reliance on election spending does not bode well for its overall financial health. News station revenues are not broken out separately, but the total figure speaks to the tenuous health of that sector.
In 2012, total radio revenue in spot, digital and off-air advertising together amounted to $16.5 billion, an increase of 1% over 2011, according to Radio Advertising Bureau. But, even that small gain is deceiving. Spot advertising, which makes up most of overall audio advertising and includes campaign ad buys, held steady at $14.2 billion during 2012, compared with the previous year, according to the Radio Advertising Bureau. In other words, the $124 million in election ad spending offset declines in other sectors, but it won’t be around to do so in 2013. Digital revenues remain the smallest category, but, as in 2011, grew the most, increasing by 8% over the same period of time a year earlier.
Network: The three major networks, with their portfolios of entertainment, news and digital properties, experienced some advertising growth in 2012. But the broadcast divisions did not fare nearly as well.
SEC filings show that revenues for ABC’s broadcast arm decreased 4% in its 2012 fiscal year. CBS’s entertainment division experienced a growth of 3% over the calendar year. And NBC’s broadcast arm increased its revenues 4.5% in 2012 (when not including revenues from Olympic and Super Bowl ads). Network news programs are a subset of broadcast overall revenue, and Pew Research estimates that their revenue tracked closely with that of each broadcast arm. While NBC’s Today Show lost in ratings and its newest news magazine floundered in ratings, NBC’s cable news outlets can keep the division aloft. CBS, while having the lowest ratings for both morning and evening news programs compared to the other two networks, is buoyed by its popular prime-time lineup, including the venerable 60 Minutes. And ABC’s success in the morning could influence its future economic outlook. Its first quarter in 2013 showed a strong economic start for the broadcast division.
Cable: Revenues rose across the board for cable news channels, though Fox was projected to demonstrate the strongest growth at 11% to $1.8 billion, according to research firm SNL Kagan. MSNBC was up 6% to $443 million. CNN, projected to grow revenues by just 1% to $1.1 billion, seemed to be showing the financial impact of ratings difficulties. Profits were expected to drop at CNN in 2012, while they were expected to grow for the other two channels.
In years past, subscriber and advertising revenue each tended to account for about half of each channel’s total. That has begun to change. In 2012, CNN was projected to have generated nearly two-thirds of its revenue from subscribers, and a growing portion of its revenue from other sources. Fox and MSNBC are both more reliant on advertising than CNN is.
Local TV: A flood of political advertising in a presidential election year and a slowly improving economy boosted revenue for local television stations in 2012. Even-numbered years almost always mean higher revenue for local TV, thanks to political ads and the Olympics. BIA/Kelsey estimated local ad revenue at $19.7 billion, up 10 percent from the year before. Political advertising alone hit a record $2.9 billion, up 38% from 2010 and almost double the $1.5 billion spent on local TV in 2008, according to TVB analysis. Local stations captured over 80% of total political spending on television.
When it comes to digital revenues, the local TV market cooled in 2012, growing just 10%, according to BIA/Kelsey. That is less than half the growth rate of the year before. The typical local TV station makes about 3% of its total revenue from online and mobile ads, according to BIA/Kelsey.
African American: Much of the African American newspaper industry struggled financially in 2012. On top of circulation challenges, advertising revenue declines remain a problem. While most of the black press does not report advertising revenue, virtually all of the editors interviewed expressed concerns. Decreased revenue has resulted in staff cuts and reduced publication schedules at many outlets. Several papers even reported that advertisers were not following through with payments.
The Pew Research Center conducted a special study for this year’s edition of the State of the News Media that analyzes changes in the structure and makeup of television news. Following are the highlights of that report.
Cable: The format of daytime cable news has evolved over the last five years to look more like prime-time talk programming. Interview segments are now as prominent in daytime cable as they are in prime time. Coverage of live events and live reports dropped in daytime programming by about one-third—from 33% of the newshole in 2007 to 23% in 2012. And the airtime devoted to interviews—which can cost far less to produce–rose from 39% to 51%, equaling the percentage of airtime they fill on cable at night, when partisan talk and debate drive the programming.
A separate analysis of cable in late 2012 finds that, over all, commentary and opinion are far more prevalent on the air (63% of the airtime) than straight news reporting (37%). CNN is the only channel to offer more reporting (54%) than opinion (46%), though by a small margin. By far the highest percentage of opinion and commentary is on MSNBC (85% to 15% reporting). Fox was in between at 55% commentary and 45% reporting.
Over the years, the three main cable news channels have evolved to become much more similar in programming structure. That marks a major change from 2007 when CNN was distinguished by its emphasis on edited packages and MSNBC spent far more time on interviews than either of its rivals. This convergence occurred after major shifts at all three networks. MSNBC changed its formatting most in prime time, Fox in daytime and CNN changed sharply in both day parts.
Local TV: In local television, newscasts in recent years have placed an even greater emphasis on traffic, weather and sports, reduced the number of edited package stories on the air and shortened the lengths of stories—trends that may reflect the economic strains affecting the industry.
One notable change in the construction of the local newscast is a roughly 20% decrease in airtime allotted to packaged stories. According to 2005 data, those packages accounted for 41% of the local television newshole. In 2012, that was down to 33%.
The study suggests that local news has built up a third leg to the two core elements of weather and traffic on local television news. In addition to the more modest increase in the already substantial amount of airtime filled by weather and traffic—from 25% in 2005 to 29% in 2012—the time devoted to sports nearly doubled, from 7% of the newshole in 2005 to 12% in 2012. Thus when sports, traffic and weather are combined, the airtime time devoted to these subjects rose from 32% to 40% of local TV newscasts—a 25% increase. Indeed, Pew Research’s examination of 48 evening and morning newscast in late 2012 and early 2013 found that 20 of them led with a weather report or story.
Network News: The one television news platform that seems to be a rock of stability is network news. Despite the steady erosion of the early-evening audience and continuing doomsday predictions about the future, the structure and format of the network newscasts have changed remarkably little since 2007, far less than on cable or local television news.
In 2007, more than three-quarters of the airtime on the nightly newscasts (82%) studied by Pew Research was composed of package reports. Five years later, that percentage had fallen only slightly, to 79%.
Not only was there little change in the reliance on packaged reports, but the length of each of these reports remained remarkably steady. Five years ago, the average package on the evening news lasted 141 seconds. In 2012, that had increased by one second. While a much smaller component of the evening newscast, the length of the average interview dropped only two seconds in the past five years—from 110 in 2007 to 108 in 2012. And the length of an average live stand-up report decreased modestly, from 91 seconds in 2007 to 88 seconds in 2012.
News investment encompasses everything from newsroom budgets to staffing to journalistic initiatives. For the most part, the message remains one of resource tightening that goes along with smaller budgets.
And a new survey, special to this report, reveals that the public is noticing an impact on the content – and is beginning to abandon certain news outlets. Nearly a third (31%) of U.S. adults have deserted a news outlet because it no longer provides the news and information they had grown accustomed to receiving. And respondents seem to be noticing erosion in quality of coverage even more than diminishing quantity. Fully 61% said they noticed that stories were less complete compared with 24% who said they noticed fewer stories over all.
Local TV: Staffing levels in the local TV sector were expected to be stable in 2012, perhaps even more so than in 2011, according to a Hofstra University survey. A majority of news directors expected no change in staff size in 2012, while just a third said they anticipated adding more staff, about the same as the year before. And only 2% said they expected to have to cut staff, fewer than the year before.
In programming, more stations began airing news in the very early morning time slots, often a cost-saving move as these extra newscasts require little extra in terms of resources as stories are often repeated. Even so, audience data suggest there may be a limit to the gains that can be found here. Early-morning news was on the air in 113 markets, up from 104 in 2011, according to Nielsen data. The number of stations airing news at 4:30 a.m. was up 14% in 2012 to 245, from 215 in 2011.
Cable: Each of the three main news channels was projected to spend more on the news in 2012, continuing a long and steady upward trajectory that on some level reflects the relative stability of the cable revenue model. Fox continued to outpace the other channels in total spending at an estimated $820 million, up 11% from 2011, according to SNL Kagan. CNN, though no longer the leader, has nearly kept pace with Fox. It was projected to increase expenditures by 5% to $682 million. And MSNBC, which shares newsgathering operations with the wider NBC News, was projected to have spent $240 million, an increase of 8%.
There were some staffing cutbacks at CNN and Bloomberg TV, mostly impacting producers and editors. And while there were several bureau closures and openings, the total number of news bureaus affiliated with cable news channels did not change in 2012. The greater change may be in the format and the reporting as discussed in the content section of this report.
Magazines: Faced with that difficult advertising climate, magazines cut jobs aggressively in 2012. Employment at U.S. magazines fell 4%, more than twice the 1.7% decline in 2011, according to Advertising Age’s analysis of recent Bureau of Labor Statistics data.
Perhaps the most salient illustration within the news genre is Newsweek. After the weekly news magazine announced the end of its print edition, its boss, Tina Brown, proceeded to another round of layoffs following those of 2011, leaving only a skeleton staff to put out The Daily Beast and the digital version of the magazine. Other senior staffers, such as managing editor Tom Watson and features editor David Jefferson, also left. Andrew Sullivan, the prolific blogger, announced in January 2012 that he was separating from Newsweek to set up his own paying site.
In January 2013, Time Inc. cut 500 jobs—nearly 6% of its global staff—as part of a mandate from Time Warner CEO Jeff Bewkes to shave $100 million from the publishing unit’s annual costs.
Newspapers: With ad revenues 60% of what they were a decade ago, papers have continued to reduce traditional newsroom staff, while expanding only modestly on the digital side. A few have also cut print frequency to three times a week. Employment of full-time professional editorial staff peaked at 56,900 in 1989. By the end of 2011, the last year for which data are available, employment had fallen 2.4% from the year before, according to the American Society of News Editors. When figures for 2012 are compiled, newsroom workforce will likely be below 40,000.
Controlling costs, while trying to minimize damage to news reporting and other essential functions, remained a critical component of managing newspapers for profitability in 2012. The industry’s contraction leaves behind excess capacity and other legacy costs to address. Some newspapers are farming out printing jobs, others selling headquarter buildings in favor of smaller offices, and many dealing with underfunded pension plans. Some metro papers continue to voluntarily drop circulation in regions far from their core delivery zone, since delivering far is expensive and yields little revenue.
Network: While all three networks with news divisions went through staffing and management changes, the shifts were most significant at NBC. In June 2012, Savannah Guthrie replaced co-anchor Ann Curry on the Today Show. And NBC News division president Steve Capus left the company in early 2013 after significant restructuring there.
ABC shuffled staff in 2012 and introduced some new programming. As a trial, Good Afternoon America aired for nine weeks starting in April 2012. Some of the more significant staff changes at the network involved journalists who made the jump from broadcast to cable. In 2012, White House correspondent Jake Tapper and 20/20 co-anchor Chris Cuomo both left for CNN.
And on CBS, a new morning show rolled out, resulting in a number of personnel changes. CBS This Morning debuted with co-anchors Charlie Rose, Gayle King and Erica Hill in January 2012. In August, CBS pulled Hill from the anchor desk and put the network’s chief White House correspondent, Norah O’Donnell, in her place.
Audio: The number of radio stations that categorize themselves as all-news is small, but stable. According to Arbitron’s latest available data (2011), 37 stations self-identified as all-news, up from 30 in 2009.
While NPR lost on-air listeners and Web traffic in 2012, the organization’s audience data suggest that NPR’s investment outside of traditional AM/FM radio may yet pay off. NPR created a special news app team to figure out how to make the organization’s reports more interactive and data-driven. Its news apps attracted 3.4 million visitors on average per month in 2012.
African American: African American newspapers continued to face economic constraints, and in sectors where there was growth, little of it was news-based. The Chicago Defender cut back from four days a week to one day a week in 2008. Then, in October 2011, it laid off its only two editors left. It later hired back one of those editors in 2012. The Afro-American cut back its operations to four days a week in 2010 and chose to not rehire for positions where staff members left. Tied to these financial challenges, the number of pages in the Afro has been on the decline: The Afro papers ran 28 to 32 pages on average in 2008 and are now down to about 16 to 20 pages.
On television, several new channels emerged in 2012 geared toward a black audience—but little or none of their content was news-related. Despite the fact that almost 7 out of 10 African Americans said they watched television news “yesterday” in a Pew Research survey, little black-oriented news programming is available on TV. In 2012, BET launched a new news program and it and TV One both aired special election-related programming. But of the several new cable and multicast channels that went on the air in 2012, none provided much in the way of news.
The year 2012 was one of consolidation in the TV sector, impacting local, network and cable television news. And a number of newspapers and magazines changed hands over the course of the year, though the dollar amounts of those deals tended to be smaller than in years past.
Local TV: In 2012, some big owners of TV stations got bigger. Sinclair, which already owned the most local stations of any group, acquired six more from Newport Television for $412 million. The No. 2 ownership group, LIN Media, paid $330 million for 13 New Vision stations. And Nexstar jumped to third place, picking up a total of 17 stations from two sellers. Large single-station sales were the exception in 2012. In the only deal of note, Landmark Media sold its station in Nashville, CBS affiliate WTFV, to Journal Communications for $215 million. Nevertheless, several station groups were exploring sales early in 2013. Fisher Communications, Barrington Broadcasting and the Communications Corporation of America, with a total of 70 stations, were reported to be on the block.
Network: Comcast continued to consolidate its control over NBCUniversal. In February 2013, the cable giant bought General Electric’s 49% stake in NBCU—which includes the network news division along with cable properties such as MSNBC and CNBC—about a year earlier than industry experts had expected. This means that Comcast is the sole owner of NBC, instead of just owning a majority of the network.
The move by Comcast echoed its July 2012 purchase of Microsoft’s stake in MSNBC.com to give Comcast sole ownership. In a coinciding branding shift, MSNBC.com became NBCNews.com, and in early 2013, MSNBC.com re-emerged as a site just for the cable channel. Comcast now owns the entire digital business of NBC News.
Cable: Aside from the structural changes at MSNBC brought about by Comcast, the most significant ownership development in cable news came when Rupert Murdoch announced in December that his company, News Corp., would split into two entities. The move effectively quarantined the struggling publishing properties under the company’s old name, while showcasing its cable and broadcasting entities—including Fox News Channel and Fox Business Network—under the new name, Fox Group.
And in January 2013, the Qatar-based news organization Al Jazeera purchased the struggling domestic news channel Current TV for $500 million in an effort to establish its brand on U.S. cable. The sale marked the end of attempts by Current owners to gain traction with audiences by occupying an editorial niche to the left of MSNBC.
Magazines: In mid-February 2013, Time Warner entered discussions to sell the majority of its magazine unit to Meredith, not including its flagship title, Time. In March 2013, Time Warner announced it would spin off Time Inc. into a separate publicly traded company, ending its negotiations with Meredith.
In the consumer magazines sector, 43 acquisitions were announced, according to the Jordan, Edmiston Group, compared to 32 in 2011. However, the total value of these acquisitions—mostly small publishing companies and individual magazines—was only $277 million, compared with $3.2 billion the year before.
Newspapers: Although the prices are low, newspapers coming onto the market are finding buyers. Most notably in 2012, influential value investor Warren Buffett bought his hometown paper, The Omaha World Herald, all of Media General’s 63 dailies and weeklies (except for The Tampa Tribune and its weeklies), and, in early 2013, several more. Buffett is leading a swing of informed opinion coming to the view that, especially at mid-sized and smaller papers, print editions have legs, and those organizations can stay profitable. Real estate mogul Douglas Manchester bought The San Diego Union Tribune and has used its editorial and news columns to espouse a conservative, pro-development agenda. In July, Aaron Kushner, a former greeting card executive, bought The Orange County Register in California and six other Freedom Communications papers. A local investor group completed acquisition of The Philadelphia Inquirer and The Philadelphia Daily News for $55 million in April. That gave the papers its fifth owner in six years and the sales price was about a tenth of what another local group headed by Brian Tierney had paid in 2006.
- The 39% figure refers to people who got news online or on mobile devices in 2012. The 34% figure from 2010 does not include mobile devices. ↩
- 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 the top 25 news sites from comScore. It represents the total unique visitors to the top 25 news websites based on U.S. traffic from 2012 compared to 2011. 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 average morning news (5-7 a.m. E.T.), early evening news (5-7 p.m. E.T.) and late evening news (11-11:30 p.m. E.T.) combined viewership (individuals over the age of 2) for ABC, CBS, Fox and NBC affiliates (for the four sweeps measured, February, May, July, November). The magazine figure is based PEJ’s analysis of circulation data provided by the Alliance for Audited Media. It represents the average overall circulation full year of 2012, compared to 2011, 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 estimates from the Poynter Institute’s Rick Edmonds, based on data from the Alliance for Audited Media. This year’s figure represents average circulation for U.S. newspapers during a six-month period ending September 30, 2012 compared to the year before. The audio figure is based on survey data from Arbitron. It represents the percent of Americans age 12 or older who said they use or own an AM/FM radio in January 2012. ↩
- Cable figures are based on estimated combined ad revenues for CNN, Fox News Channel and MSNBC for 2011 and 2012, provided by SNL Kagan, a division of SNL Financial LLC. Online figures are total online ad revenues, from January to September 2012, compared with the same period in 2011, provided by eMarketer. Network figures are based on revenue estimates for network television ads for 2012, compared with the same period in 2011, provided by Veronis Suhler Stevenson. Radio figures are based on revenues from AM/FM, satellite and online and mobile platforms as estimated for January 2012 to December 2012, compared to the previous year, from Veronis Suhler Stevenson. Magazine figures are based on ad pages sold in 2012– 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 data are from the Newspaper Association of America, with fourth quarter 2012 estimates by the Poynter Institute’s Rick Edmonds and Pew Research Center. The number includes both print and online newspaper advertising revenue. Local TV figures are based on revenue estimates for local and national spot advertising on local TV for the full year of 2012, compared with the same period in 2011, provided by BIA/Kelsey. ↩