Message from Michael - Local News Website Questions - July 18, 2011

Message From Michael                              

                                                                                                            July 18, 2011

 

Questions About Local News on the Internet – A Special Report

 

 

 

 

 

A report to the Federal Communications Commission by a professor at George Washington University basically says that local online news websites aren't worth buying.  The analysis by Matthew Hindman finds that online local news websites have a revenue problem for the very simple reason that they have a readership problem.

It paints a stark picture of local online news use that is dramatically different from everything we've been told so far about the future of digital journalism.  IF what he says is correct, local online news fails all the key Internet metrics.  Or, maybe more accurately, and even worse, traffic to local online news websites is so small that it doesn't even count as minuscule.  You may be surprised – or shocked may be the better word --  at how small it is.

 

For starters, he put together a list of 18-hundred local news websites from the top 100 television markets using data from comScore.  From that he determines that 1,074 actually qualify as true LOCAL news websites by looking at the categories provided by comScore, determining where there is significant local versus national usage and making sure that the site reaches at least one percent of the audience.  Then he goes into the analysis of the four key measures of a website.

 

First is audience reach which is arrived at by counting the number of unique visitors.  Hindman dismisses this measurement, noting that most websites report a high 'bounce rate' which is when a person visits a single page and then leaves.  He argues that counting a person who visits for less than 30 seconds is like counting someone who is channel surfing on TV and happens to flip through CNN, or someone who catches a headline on a newspaper at a news stand.  He points out that people use multiple computers and multiple browsers; each time they do, they're counted as a 'unique' visitor.  He notes that the Project for Excellence in Journalism found that three-quarters (77%) of site visitors are "extremely casual visitors" who may go to a site only once or twice a month while another report, by Borrell Associates, estimates the actual ratio of unique visitors to 'real people' is four to one.

 

Hindman makes many legitimate points about why 'unique visitors' is a questionable metric, but he provides very little in the way of actual numbers and facts.  At one point he even says, "more detailed traffic metrics show that the total audience for local news outlets is uniformly small."  But then no numbers.  The closest he comes to that is when he reports that the largest local news site in any given market reached a fifth (17.8%) of the local users – which sounds pretty good to me.  The second largest a tenth (11.6%) and so on down the line.

     

Now, get ready for shock number one.  Hindman does provide some numbers for page views, the next and most critical metric.  According to the analysis, local news websites averaged only one half of one percent (0.51%) of the total page views in any given market in a month.  Out of an average of 2,700 page views per person per month, only 13.8 page views are spent on local news.

 

The next big shocker is how little time people spend at local online news sites.  Brace yourself again because it turns out that the average user spends less than one half of one percent (0.45) of their time visiting local news websites each month.  In an average month that translates to 9.1 minutes for all news websites in the median (note – not average) market.  The top-ranked local news website in any given market averaged 5 minutes with the lowest ranked website averaging 30 seconds. 

To put a little perspective on this, comScore says that the average page view is only 26 seconds.  The overwhelming majority (98%) of page views last less than two minutes.  And just about every page views (99.8%) lasts less than ten minutes.

    

The report makes the case that LOCAL news websites are often 'collateral damage' (my words) to national news websites.  The average market sends 74 monthly page views to "news sites of all stripes."  Sixty of those page views are to NON-LOCAL news sites, leaving 14 page views for the local news sites.  It's the same for time spent, with the user in the average market spending 60 minutes on NON-LOCAL news sites compared to just 11 minutes on LOCAL news websites.

(Getting a little discouraging at this point, isn't it?  I have to admit that about this time, after having re-read the report for the third time, a line from a children's story kept echoing in my head:  everybody hates me, nobody loves me, guess I'll go eat worms.)

 

Not surprising, the study finds that local online news is dominated by the mainstream, traditional news sources – newspapers and television websites.  In fact, so much so, that Hindman makes the case that many markets are virtually in violation of the Department of Justice's antitrust rules governing over-concentration of control.  So much for the diversity of news voices that the Internet was supposed to bring to the marketplace. But maybe not.  The report, in one of its many unusual definition of parameters, says that this applies only on the basis that you look at the online news community only, and don't include the actual print and broadcast products.

 

Get ready for the next shocker, or maybe semi-shocker.  Out of all those local news websites, only 17 sites are classified as true web-only local news websites.  17 out of 1,074.  Kind of reminds me that there are only 30 true all-news radio stations in the entire country.  All 17 are listed in the report including to my great surprise, one in little Greenwood, South Carolina.

 

Oh, yes, all those innovative, future-of-journalism, news websites that you see written about in trade and journalism publications as well as non-profit and foundation reports?  The report says Phfft.  Okay, so phfft isn't a word, and no, the report doesn't actually say that, but that's the net effect.  The point is they don't even show up in the comScore data – zip, nada, zero, nothing.  The study cites several examples of how these sites are non-entities.  Probably the most telling:  The Gotham Gazette in New York which in two months received 12 visitors out of the 19,998 panelists.  As to AOL's Patch hyper-local effort creating news websites in communities throughout America.  Another phfft.  In New York, where the Patch program started, there were between 37 and 50 visitors in the entire three months studied.

 

Out of the 1,074 local news websites, more than half (590) were newspaper websites and more than a third (390) belonged to television stations.  There were 41 that belong to weekly news publications and 31 that belonged to radio.  That averages out to 10.5 local news sources in a market which breaks out as 6.1 newspaper sites, 3.8 television sites, 0.3 radio and less than 0.2 web-only sites.  Some more number crunching perspective:  the newspaper websites averaged 0.25 percent (yes, one fourth of one percent) of their market's monthly page views while television websites averaged 0.20 percent.  Time wise they're a little more equal, both averaged 0.25 percent of the total time spent.

 

Criticisms of the report are that it relies heavily on the comScore data which, in turn, relies heavily on user panels.  But in all fairness, it should be noted that all three of the online measurement services (comScore, Nielsen NetRatings and Experian's Hitwise) use panels. Also, the study does seem at times to be comparing not just apples and oranges, but sometimes pears and peaches as well, with a mango or two thrown in occasionally.  For example, sometimes the report cites numbers, sometimes percentages; sometimes medians, sometimes averages; sometimes numbers, sometimes percentages.  But, as noted before, industry researchers, Borrell Associates had very similar findings. They recently released a report warning about the over-counting of unique visitors and the fact that many users are casual users, or the term they like to use – passers-by.

       

Hindman's study is one of six submitted to the FCC which, you may recall, did its own study titled The Information Needs of Communities.  That report raised questions about the financial viability of digital journalism, noting for example that search gets the majority of digital advertising dollars.  Even more critically it raised two other points.  One, it noted that as the Internet business model evolves, "local advertisers will have more ways to reach the consumers without using content-creating media."  Two, it posed the equation an average website with 2 Million page views with three ads per page and an average CPM of $2.52 would only generate about $15,000 a month.

 

Hindman's study raises the question whether advertisers will need the local-news-content-creating media, and whether local news CPM's are enough, or even valid, in the total universe of CPM's.  So, no, this isn't some chardonnay-sipping academic's report. It may not have the ring of "be afraid, be very afraid," but it would be prudent to say, after considering the report, "be concerned, be very concerned."  

 

 

 

 

 

   

Message from Michael - News of the World - July 11, 2011

Message From Michael                              

                                                                                                            July 11, 2011

 

SHOCK AND AWE IN THE MEDIA WORLD

 

LIVE FROM YOUR TV SET, THE LATEST STUDY

 

EVERYBODY WHO IS ANYBODY HAS ONE

 

 

 

 

 

 

JOURNALISTIC SHOCK FELT AROUND THE MEDIA WORLD:  UK Prime Minister David Cameron has ordered an inquiry into "press ethics" after the scandal about phone hacking by the News of the World.  It is expected to be far more critical than the Federal Trade Commission or the Federal Communication Commission studies of the media here in the U.S.  Three fairly recent surveys of public opinion of the news media raise the question of how the U.S. media would fare in such an inquiry.

 

Only a quarter of Americans say they have a "great deal" or "quite a lot" of confidence in newspapers (28%) and television news (27%), according to a Gallup survey.  In fact, more (one third) say they have very little or no confidence in newspapers (31%) or television news (32%).

 

A fourth of all Americans (26%) say they are "very angry" with the media with nearly two thirds (61%) saying they are at least "somewhat angry" with the media, according to a survey by Rasmussen Reports.

 

More than half of Americans (54%) say they are not at all confident about the media's impartiality in reporting political and economic issues, according to Harris Interactive survey.  Just under half (45%) say the media in America portray conditions in the country less accurately than they did five years ago.  As the authors of the Harris survey say, the story about media bias is an old one.  But, they say, "The media needs to do a good job of not just using slogans, but actually proving that they provide all sides of each and every story."

 

If it's any consolation, the Harris survey, which looked at the public perception of media in five other countries, seems to indicate that the public perception of the media in the U.S. is about in the middle.  Germans have much more confidence in their media than any other country, with a fifth (20%) saying they are either "extremely" or "very" confident in their media's impartiality.  That is four times more than the U.S. (5%), which, in turn, was double most other countries.  The Italians have the least confidence in their media's impartiality with three quarters (74%) saying they are not at all confident.  That could be attributed to the fact that the head of their country, Prime Minister Silvio Berlusconni, is also the head of the country's largest media empire and could probably also claim the title of head scandal maker in the country as well.  Interestingly, in light of the News of the World incident, Britons were the most unsure about their country's media's impartiality.  One in five (20%) answered "not sure" when asked about media impartiality.  That was more than double any other country.

 

In the Gallup survey of 16 'institutions", newspapers and television news ranked 10^th and 11^th in terms of confidence, just ahead of banks, organized labor, big business, HMO's and Congress which ranked last.  The Presidency ranked 8^th, and the institution that gets the greatest vote of confidence in American – the military with more than three quarters (78%) saying they have a great deal or lot of confidence in it.

 

For a little more perspective on the ranking of newspapers and television news, weigh the percentages of people who have little or no confidence against the percentage who have a great deal or a lot of confidence.  The net result is you get a negative three points for newspapers and a negative four points for television.  For even more perspective, the high point for newspapers came in 1990 when more than a third (39%) had much confidence while for television, the high point was 1993 when it was nearly a half (46%).  Since then there has only been a point or two difference between the two.

 

The Rasmussen Reports make a distinction between what it calls the mainstream and the "political class" with the political class being defined by three loaded questions – do you trust the judgment of the American people or political leaders more, has the federal government become a special interest group, and does government and big business work together in ways that hurt consumers and investors.  So, yes, their survey should probably be taken with a grain of salt.  The Rasmussen and Gallup surveys were both done last month while the Harris survey is from February of this year.

 

The British tabloids have long been noted for their sensationalistic coverage, often acquired through – pick your term – pay-to-play journalism or checkbook journalism.  It's a charge that is now being leveled more and more often at American media. The New York Times had a lengthy report titled "The Gossip Machine" which looked at how celebrity and gossip shows and websites are "feeding the public's seemingly bottomless appetite for dirt about the famous."  And it's not just the TMZ's and Radar's of the world.  Many so-called "mainstream" media are doing the same, although disguised as paying for pictures, not interviews.  AdWeek recently did a profile piece on Barcroft Media which "serves up oddities from around the world to major TV outlets – for a price."  Once primarily focused on British news organizations, the group has expanded into the American market and so-called 'traditional' media outlets. Remember the story about the Indonesian infant with the two-pack-a-day cigarette habit?  You can thank Barcroft Media for that.

 

The other criticism is the "cozy relationship," as PM Cameron put it, between the British media and British politicians.  Exhibit A:  The Prime Minister himself who hired fa ormer News of the World editor as his official spokesperson.  The American version:  Comcast hiring FCC commissioner Meredith Atwell Baker, who after voting for the merger of Comcast and NBCUniversal, left the FCC to head NBCUniversal's 'governmental affairs' division.  Or, if you want more, take a look at the various reports detailing the media members on the cocktail circuit "inside the beltway."  

 

Okay, okay, enough, you say.  The real reason that News of the World is being shut down has nothing to do with any journalistic principles. It is a business decision.  Advertisers were fleeing along with readers.  The Murdoch family was willing to sacrifice the News in hopes of preserving the BSkyB deal.  Besides, News Corporation British subsidiary News International was planning to expand The Sun newspaper into a Sunday edition any way.  And I agree with all that.  Just as I agree with the New York Times public editor, Arthur Brisbane, when he says the media needs to cover "events and culture wherever they may lead" even if it seems "the culture is headed for the curb."  (And, no, I don't know exactly what that means.)  But, as he also says, there is a question of standards as you cover stories "loitering on the edge of propriety."

 

LIVE FROM YOUR TV SET, IT'S THE LATEST STUDY:  Despite all the reports about consumers time-shifting their viewing, despite all the talk about consumers' desire for convenience and choice in their viewing and despite all the ways to watch video, most people prefer to watch TV programs the Leave it to Beaver way – Live and at its regular time.  That's according to a survey by Knowledge Networks which found that twice as many people (47%) preferred watching TV shows live versus watching it on DVR's (23%).  Not surprisingly, two-thirds (66%) of the Beaver generation (aka Baby Boomers aged 46 -64) preferred Live TV viewing.  Somewhat surprising, nearly half (44%) of the Gen Y-er's (13 to 31) also preferred Live TV – more than double the percentage who preferred watching on DVR's (16%).  Actually the Gen Y group's second choice was Internet viewing (24%).  More surprising, it was the so-called Gen X group (32 to 45) which showed the least interest, with nearly equal percentages preferring DVR's (35%) as Live (38%).  The Gen X group was not far behind Gen Y when it came to Internet viewing with a fifth (18%) voting for Internet viewing.  Also in the not-surprising category, very few Baby Boomers (6%) expressed any interest in Internet video viewing.  And, if you can take one more "despite"… despite all the emphasis on VOD by cable and ADS systems, only four percent of the Gen Y group, two percent of the Gen X group and one percent of the Baby Boomers picked VOD or pay-per-view as their favorite way to view. 

 

EVERYBODY WHO IS ANYBODY HAS ONE:  According to the latest comScore report, more than 234 Million Americans from the age of 13 and up, use a mobile device.  For a little perspective, the Census Bureau says there are 243 Million people aged16 and up in the U.S.  Add another 10 Million to that number to account for the three extra years and you get roughly 253 Million 13-plus-year-olds.  By my calculation, that means roughly 92% of everybody over the age of 13 has a cell phone.  The firm says nearly 77 Million of those mobile devices are Smart Phones.  More than two-thirds (69.5%) send text messages on their mobiles while more than a third use it either to browse the Internet (39.8%) or use mobile Apps (38.6%).  Other uses are games, of course, (26.9%) and listening to music (18.6%).

 

Another survey, this one by Prosper Mobile Insights, found that SmartPhones and Tablets are taking the place of many common household electronic devices including alarm clocks (61.1% say they have replaced them with their SmartPhone), GPS (52.3%), Digital Camera (44.3%), Landline Phone (40.3%), MP3 Player (37.6%) and Video Cameras (34.2%).  And more than half (57.7%) say they would be comfortable using their SmartPhone to make a purchase in a store.  A caveat here – the survey is based on a panel of people created by Prosper and only 149 people took part in the survey.

 

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