Message From Michael 
March 23, 2009
THE STATE OF THE NEWS MEDIA – A SPECIAL REPORT
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INTRODUCTION: The sixth annual report by the Pew Project for Excellence in Journalism is, as the authors readily admit, the “bleakest” of the reports. In large part that is because it examines in detail… lots of detail, the economic battering that the media has taken and continues to take. One is tempted to say that the study is not so much a report on the state of the news media, as it is a report on the state of the advertising media. And possibly rightfully so. If total spending on advertising falls, as predicted, in 2009, this will be the first consecutive three year decline in advertising spending since the Great Depression. As the authors put it, the problem facing journalism is not so much an audience problem or a credibility problem as a revenue problem. In their words it is “the decoupling… of advertising from news.”
OVERVIEW: Two other themes emerge from the report. One is that the move to a digital, online world has changed from a migration to an acceleration. It is a race for survival, according to the report, with the news industry having to re-invent itself sooner than later, using the revenues of the ‘old’ media to seed potential future revenues of the ‘new’ media. The problem is the new media platforms account for so little of the revenue now. In newspapers, the dead tree technology of print still accounts for more than 90% of the dollars crossing the transom. In television, online ad revenues still account for only two percent of a station’s revenues. So, how do you pay for online newsgathering when online revenues are so low? What makes it even more challenging is the fact that the amount of online advertising available is abundant – meaning rates are low. The second theme is that the media agenda which had already narrowed down in 2007, narrowed down even more in 2008. Just two stories -- the presidential election and the economic crisis -- accounted for more than half of what the authors inelegantly call the media “newshole.” And, again, maybe rightfully so. The presidential election was “historic” and the economic crisis was (or is) “profound”, so “lopsided” coverage may be expected. But when three out of every five minutes of cable news coverage, for example, is devoted to the one topic (elections), it raises questions. Of course, it was a successful strategy for cable. They were the only ones to show growth in 2008 (a whopping 38%), but the report notes they did it with “the narrowest news agenda of all media.” Coupled with the media’s short attention span (a story one week doesn’t make news the next), and the economic staffing strains, the report raises the question whether the narrow focus is strategic or systemic. Regardless, the result is “more outlets seemed to have resulted not in coverage of more things, but more coverage of a few things.”
PARAPHRASING MARK TWAIN AGAIN: You know what I’m going to say. His famous quote – reports of my death are greatly exaggerated. Well, the authors say the idea that “traditional journalism” is on the brink of extinction is also overstated. For example, newspapers are the poster child of the dead media movement, but the authors note that newspapers still make $38 Billion, have double digit profits, sell more than 48 Million newspapers daily and employ 45,000 people. Of course that last number is counter balanced by the fact that by the end of this year, the study says newspapers will employ 20% to 25% fewer people than they did in 2001. In other words, as much as one in four jobs gone in less than a decade. And that $38 Billion. It was $49.3 Billion two years earlier. But here’s the number that threw me – in 2008, stock prices for newspapers fell 83%. In 2007, the latest year for which figures are available, there were 795 English-language commercial televisions doing news, a 10% increase from the year before, with a station in the top 25 markets making an average $77 Million a year and even the smallest stations making $4 Million a year. And local television is still the most popular source of news. Of course, counter balancing that is that local TV has had the greatest loss. A decade ago, two thirds (64%) of Americans said they were regular viewers. That number has dropped to little more than half (52%). But maybe the most notable argument for ‘traditional’ media comes from examining news websites. While all news and information websites were up seven percent, the top 50 news websites (associated with mainline media) were up 27%.
NEW MEDIA VERSUS ‘OLD’ MEDIA: Even though the report calls 2008 a “watershed year” for the Internet as a source of news, with more people citing it as a primary source for news, the report raises questions about its role. Paradoxically, the report notes, despite the public reliance on the Internet for news, the public gave the Internet particularly low marks for credibility. Citizen news sites which the report says “gained some steam in 2008” remained “far from a substitute for legacy (meaning traditional) media.” As the report notes, their range of topics is narrower, the sourcing thinner, and the content is often not updated even once a day. Online news ventures started by what the report calls “refugees of the mainstream press” (people who have left their traditional jobs for whatever reason), while showing some solid journalism, are limited to niche areas of interest and are reliant on philanthropic funding. For those reasons, the report says these sites may be able to “fill in the gaps of vanished journalism” but are unlikely to replace the industry entirely. (The report makes the point several times in various areas that it is questionable whether online revenues can support the kind of newsgathering we have associated with traditional news operations.) Paradoxically (OK, I just wanted to use that word again), so-called legacy media sites actually do a better job of involving citizen participation and interactivity than the so-called citizen journalism sites and even more so than the so-called citizen blogging sites. In short, the report says the “new media in aggregate” are a long way from compensating for the losses in coverage in traditional newsrooms.
FACTS TO KEEP IN MIND: When considering the website component of your operation. More often than not (50% vs. 41%), when people get news online they do so by following links to arrive at a news site, rather than going directly to the home page of a favorite news organization. This relates to another point made in the report. The real growth online is in search advertising, but “no one has figured out how to combine search advertising with news.” Some numbers to add to that argument. Nearly half of Americans (47%) have emailed a news story to a friend. That’s more than double what it was in 2006. (20%). A quarter (22%) have customized web pages that include news. And one in six Americans (15%) receives e-mail alerts for news.
SAME AND DIFFERENT NOTES: In an echo of a finding from the previous year’s report, the study found virtually no difference between the three networks in terms of content. In fact, an analysis of news stories showed that the Big 3 agreed on nine out of the ten top stories for 2008. In actual fact, there were bigger differences between the morning newscasts and the evening newscasts than there were between the network evening newscasts themselves. Again, an echo of the previous year’s report. For example, the morning newscasts had as much as 10% more Presidential election coverage than the evening newscasts. Even more interesting, the report says cable news operation have the same difference between the morning and evening programs, but in reverse. The prime time programs are one of the main reasons that the cable news analysis showed such a narrow agenda, because the hosts focus on one or two big stories (mainly the election) and that’s it. Or, as the report authors put it, prime time cable closely resembles talk radio with pictures. Equally interesting (to me, at least) is the difference between the networks television operations and their web operations. The web operations showed more diversity in content. For example, the election represented a quarter of the online content compared to a half on cable. The economic crisis got significantly more play online than on air, and the same goes for the
NOT TO BE IGNORED. The two other areas of the report are radio, which the report says, should now be referred to as audio, and magazines. The changing reference to radio is in part because of the digital transition and the number of options now – terrestrial radio, HD radio, satellite radio, Internet radio, cell phone radio and podcasting. The report notes the number of people citing radio for news continues to diminish, but the numbers for talk radio still remain high. News/talk radio is the second most popular format, just behind country music, and it might be #1 except for country music’s popularity in the south. Newspapers may be in “free fall” as the report says, but for news magazines, it is closer to total collapse. The report particularly cites U.S. News and World Report, Newsweek and Time as examples of that. But the report also notes that niche magazines for an “elite” audience are doing better, although still struggling. In that area, the report cites The Economist, The New Yorker and The Atlantic. Another two other areas covered in the report are Alternative Weeklies and Ethnic Media. In previous reports, these areas had shown better prospects of growth than the other media, but this year, both appear to have joined the others in falling victim to the economic malaise. Both areas started heading toward more online efforts which is a change from the past, but with unclear results.
JUST TO ADD PERSPECTIVE: Let’s look at some basic numbers, keeping in mind that as of March, 2009, the Census Bureau reports the
THOUGHTS TO PONDER: These are some of the statements spread throughout the report that caught my attention. Each line probably deserves a page of discussion, but we don’t have that. In any case, here they are, in no particular order:
Powerful structural shifts brought on by digital technology have allowed those who want to reach consumers to do so without the news media as intermediary. The expansion and innovation is coming from those outside the traditional news industries. People have a greater amount of trust in the paper or TV they use, but not the ‘generic’ media. Civic life will be poorer if the current trends in news investment simply run their course. The press as an institution failed to function as an early warning system on the greatest economic crisis since the Great Depression. The average citizen seemed more attuned to the early rumblings underneath the financial landscape than the journalists. (A reference to the fact that most journalists admit missing the coming economic crisis while public interest stats showed Americans were talking about this before the reporters.) Power is shifting to the individual journalist and away, by degrees, from journalistic institutions. Consumers are gravitating to the work of individual writers and voices and away somewhat from institutional brand. The appeal of a news organization in the future increasingly will be not just the content it produces but also the package of information it assembles from multiple sources. Most of what we know about the new President came from his campaign rather than from media enterprise.
COMMENTARY: In addition to being the “bleakest” report, this may also be the weakest report. It may be my bias, built up from six years of reading these reports and six years of reading studies and surveys from hundreds of other organizations, but much of the report fell into the category of things-we-already-know. Yes, things are bleak and the drop-off in circulation/ratings/viewing coupled with a drop-off in revenue, compounded by an economic ‘imperfect’ storm, makes the future scary. But tell me something I don’t know. The short shrift given social networking is partial evidence of that deficiency. Much of it is interesting and much of it is significant, but too much of it is not. That may explain why the study appears to have received less coverage than previous reports. At the very least, it provides me an excuse for why it took me so long to write this summary.
DISCLAIMER: The report breaks out into 13 sections, amassing 160,000 words. I boiled that down to 25,000, and from that, distilled it even further into these 2,600-plus words. Unfortunately, unlike the distillation process that takes place with a Jack Daniels, the result may not be a sweet essence but a sour distortion. It is still massive and this summary does not do it justice. So, despite my questions about the report, expect more on the state of the news media in future newsletters, especially about mobile.
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