WhatTheyThink Blog

Report Explores New Digital Dimensions of the News Media

By Patrick Henry
Published: April 13, 2011

Did you know that seven of the top 25 newspapers in the United States are now owned by hedge funds? Or that that nearly half of all Americans now get some form of local news on a mobile device?

Facts like these—and commentaries on what to make of them—abound in The State of the News Media 2011, recently released by the Pew Research Center’s Project for Excellence in Journalism. It’s must reading not only for journalists, but for anyone trying to make sense of what digital technologies are doing to the market for mass communications.

Beginning with the revelation that every news channel is losing audience with the exception of online, The State of the News Media 2011 takes a deep dive into eight major sectors and comes up with some striking—or, depending on the medium in which you earn your living, alarming—conclusions. Chief among them, say Tom Rosenstiel and Amy Mitchell, the report’s chief editors, in an overview, is that “in the digital realm the news industry is no longer in control of its own future.”

News organizations, they explain, rely increasingly on outside providers to sell their ads, aggregate their readers, and develop the software that lets them deliver their content digitally. Above all, news organizations depend on these intermediaries for control of audience data on which crucial strategic decisions about the future of the news business are based.

“In a media world where consumers decide what news they want to get and how they want to get it, the future will belong to those who understand the public’s changing behavior and can target content and advertising to snugly fit the interests of each user,” write Rosenstiel and Mitchell. “That knowledge—and the expertise in gathering it—increasingly resides with technology companies outside journalism.”

In every sector except online, that lack of expertise has been paralleled by decline or stagnation in audience. In 2010, all three cable news channels (CNN, Fox, and MSNBC) lost viewership. So did network news and local TV (although losses in the latter are said to have “slowed to a trickle” thanks to rising interest in local programming). Magazine circulation was flat, as was AM/FM radio listenership. Likewise, African-American media and alternative weeklies managed to put floors under the audience losses they suffered in 2009.

Nevertheless, in 2010, each of these media did manage to grow its revenue above the level of “a dismal 2009,” according to a summary of the report’s key findings.

The same, unfortunately, could not be said of newspapers, and nothing captures the essence of The State of the News Media 2011 better than the contrast it presents between the fortunes of newspapers and online sources. It reports that 46% of people now say they get news online at least three times a week, surpassing newspapers (40%) for the first time. The Internet, now trailing only television as a destination for news, is also on its way to surpassing print newspapers in advertising revenue for the first time.

Newspapers, says the report, are “still laboring to find a sustainable business model for the future” as revenues and readership continue to decline. These losses slowed considerably in 2010 versus the two preceding years, and, contrary to print-is-dead assumptions, the papers that remain in business generally are operating in the black. But the search for more readers and fresh sources of income remains uncertain, and some of the newspaper industry’s new leaders (including hedge fund managers) are outsiders whose lack of news experience will be a catalyst for further change in the business model.

As if all of this didn’t provide enough turmoil for news organizations to cope with, there’s also what the report describes as the “new wild card in digital”: mobile access to content. According to a new survey included in The State of the News Media 2011, 47% of Americans now say they get some kind of local news on mobile and wireless devices such as cell phones and iPads. Only 7% of Americans owned electronic tablets in January of this year, according to the survey, but that share was nearly double what it had been just four months prior.

The State of the News Media 2011 is the eighth edition of the Pew Research Center’s annual report on the health and status of American journalism. This year's study contains a series of special reports: the aforementioned survey on how people use mobile technology to get local news; a report comparing the U.S. newspaper industry with the rest of the world’s; and two reports on community news websites.

Also of interest is Pew’s Who Owns the News Media, an interactive database that lets users compare companies by various indicators, explore media sectors, and read profiles of individual companies.