GANAHL ON MEDIA: State of News Media

OK, I admit it: I’m an addict…a stat-addict. To be sure, I’m not alone, there are many stat-addicts: sport-stats, market-stats, caloric-stats, you name it. Me, I’m a media-stat addict, and I can’t get enough stats about circulation, advertising or site traffic. Lucky for me I found the mother lode of all media stats, the Pew Research Center’s The State of the News Media: An Annual Report on American Journalism. The series of reports are the work of the center’s Project for Excellence in Journalism (PEJ).

The 2009 report is the 6th in a 6-year series beginning in 2003. It analyzes 9 major media sectors across 5 areas: audience, economics, newsroom investment, ownership and digital journalism. Its analysis is based on ‘aggregating as much publicly available data as possible,” and PEJ’s own extensive content analyses. At 180,000 words, or 700 plus printed pages, and dozens of charts it is mammoth. Go figure: that’s over one million words during the 6-year project! The online edition allows us true stat-addicts to sift the data and create our own multi-variable charts. Cool, huh?

So…what is the ‘state of the news media?’ PEJ concludes that the 6th annual report “is also the bleakest.” While equal numbers of news seekers still seem to value the practices and values of traditional journalism, they are increasingly abandoning legacy media as sources of traditional news, and migrating to ‘on demand,’ online platforms. These online platforms deliver news when audiences want it, in formats they want. These formats include wi-fi, mobile, social networking sites, blogs, video, microblogs, RSS and e-mails. News audiences now “hunt and gather what they want when they want it.” Additionally, many of these news seekers then share, or repurpose the content through the very same platforms they initially hunted.

Thus, the crisis is less about audience size, and more about audience migration, and the resulting shifts in platform revenue from legacy media to online media. The gains in online platform revenue are nowhere equal to the losses in legacy media revenue. PEJ describes it is as the “decoupling …of advertising from news.” Add to this today’s economic collapse, which has “at least doubled the revenue losses”, caused by the migration of audiences from legacy media and you start to appreciate the depth of the crisis.

So what are the media habits of these online news hunters and gatherers that are precipitating such change? PEJ concludes that while those that use the Internet has remained relatively constant for the last several years at 70% to 75% of the country’s population, they increasingly ‘hunt and gather’ for news more frequently and for longer periods of time.

Nielsen's ranking of the top 10 news sites

Moreover, online platforms seem to be more popular sources of news when compared to most traditional news sources. According to a Pew Research Center survey (August 2008) 37% of the total Internet users go online for news at least 3 times a week, compared to the 29% that watch network nightly news and the 22% that watch network morning shows. Another PRC survey (December 2008) found 40% relied on online sources for national and international news compared to 35% that relied on newspapers. Where do they seek their online news? PEJ reports the top 5 most popular news sites in 2008 according to Nielsen Online are MSNBC, Yahoo! News, CNN, AOL News and The New York Times.

As to the future of legacy media, PEJ concludes, “There are growing doubts…about whether the generation in charge has the vision and boldness to reinvent the industry.” I agree. The skills necessary for traditional journalism don’t readily translate into online entrepreneurship. The future of legacy media is tied to their ability to forge increased collaborations with innovative online partners. And that…means more excitement for us stat addicts! Stay tuned.

GANAHL ON MEDIA: How Dire Is It?

Today more people rely on the Internet than newspapers for national and international news. For those involved in traditional media, the question of the moment is survival. How threatened are traditional media? How deep is this crisis, and when will it get better?

In a word…the crisis is dire. Hopefully it will get better, but this may take a very long time.

Consider total reported advertising revenues for the first half of 2009. Advertising Age reports that overall ad revenues measured by Nielsen are down almost 16% during the first 6 months 0f 2009 when compared with the same period in 2008.

The only two media categories among the 19 measured categories reporting increases during the first half of 2009 are Cable TV with a 1.5% increase and Spanish Language Cable TV with a 0.6% increase. Internet ad spending is down 1% during this period. Please see the table titled Year-to-Year Change in Ad Spend, by Media published September 2, 2009 in Advertising Age.

The media most impacted by this crisis are newspapers. Richard Pe’rez-Pena reports in The New York Times that newspaper revenues fell almost 29% during the first half of 2009 according to the Newspaper Association of America. Also, the NAA reports that the current rate of decline in newspaper ad revenues is accelerating from the 2007 decline of 16.7%, and the 2006 decline 7.9%.

More over, the current precipitous decline represents long-term erosion in newspaper ad revenues. Ryan Chittum concludes in the Columbia Journalism Review that “(the 2009 decline) understates just how awful the numbers are…You have to go back to 1965 to find a year with revenue lower in 2009 dollars than what this year is projected to be.” Do the math…newspapers are an industry with revenues little improved for almost 45 years ago!

Declines in newspaper circulation mirror its revenue declines. The NAA reports paid circulation for daily newspapers totals 48.497 million in 2008. This translates to a 41.8% penetration level of the total 116 million US households in 2008. The last time paid circulation for daily newspapers totaled 48 million was in 1945! Paid circulation for daily newspapers peaked at 63.34 million in 1984.

There are several websites devoted to chronicling newspapers’ traumas. One of the most interesting is Paul Gillin’s Newspaper Death Watch. The NDW tracks those forces that Gillin thinks will “ultimately destroy 95% of American major metropolitan newspapers.” These forces include newspapers’ high fixed costs such as equipment, paper and labor.

Gillin calls himself an optimist and thinks “this painful decline will give birth to a new model of journalism built upon aggregation and reader-generated content." His site lists 12 metropolitan dailies including the Rocky Mountain News and the Baltimore Sun that have closed since the site’s beginning in March 2007. It also lists 8 dailies including the Seattle Post-Intelligencer and the Ann Arbor News that have ‘adopted hybrid online/print or online-only models.’

Another site, paper cuts uses mapping software to depict ‘layoffs and buyouts at U.S. newspapers.’ St. Louis designer, journalist and site creator Erica Smith reports almost 32,000 newspaper jobs have been lost, and 31 daily and weekly newspapers have closed since June 2007. The site also reports salary and benefit reductions at various newspapers.

Of course other media are also severely impacted. Jason Fells reports in FOLIO that according to the Publishers Information Bureau consumer magazine ad pages fell almost 30% in the 2nd quarter of 2009 compared to the same 2008 time period. This compares to the 11.7% ad page decrease in 2008 when compared to 2007.

And, what about media’s future? How guarded are the predictions? Pe’rez-Pena reports in the NYT that while the rate of decline in advertising revenue seems to be slowing, many analysts think it will be 2010 before we see any substantial improvement.