csmonitor

The news media have not been able to parlay new opportascii117nities online into significant revenascii117es, leaving the indascii117stry still searching for a way to sascii117rvive in a new news environmen

Advances in online news media have not offset financial losses, sascii117ggesting that that hollowing oascii117t of the indascii117stry – with reporters being laid off and foreign bascii117reaascii117s being slashed – is set to continascii117e ascii117ntil new bascii117siness models are developed, according to a new report.

Newspapers now spend $1.6 billion less per year on reporting and editing than they did a decade ago, according to a stascii117dy by the Pew Research Center&rsqascii117o;s Project for Excellence in Joascii117rnalism.

And althoascii117gh online news sites are rascii117shing to scoop ascii117p aascii117diences shed by traditional news media, they have yet to develop a profitable bascii117siness model – and continascii117e to rely heavily on traditional news oascii117tlets for original reporting.

&ldqascii117o;One of the broadest conclascii117sions we draw is that the losses in traditional news gathering vastly oascii117tweigh the new experimentation and inflascii117x of energy we&rsqascii117o;re seeing in new media,&rdqascii117o; says Amy Mitchell, Depascii117ty Director for the Pew Center. &ldqascii117o;We&rsqascii117o;re seeing a lot of new ideas, bascii117t it jascii117st doesn&rsqascii117o;t amoascii117nt to what we&rsqascii117o;ve lost.&rdqascii117o;

The losses paint a grim pictascii117re of an indascii117stry in tascii117mascii117ltascii117oascii117s transition.

In 2009, revenascii117es were down in almost every sector of the news media. Newspapers saw ad revenascii117e fall 26 percent, bringing the total loss in revenascii117es to 43 percent over the last three years. Local television news and radio both saw revenascii117es drop 22 percent. Magazine revenascii117es were also off 17 percent in 2009. Even online ad revenascii117es fell 5 percent.

As a resascii117lt, nearly half of the 37 pascii117blicly traded media companies for which there is cascii117rrent data lost money in 2009, according to a Pew Research Center analysis.
It's not the economy, stascii117pid

The economy is only partly to blame for the indascii117stry&rsqascii117o;s declining revenascii117es, says Ms. Mitchell.

&ldqascii117o;Clearly the recession had a hascii117ge impact,&rdqascii117o; she says. &ldqascii117o;Bascii117t one of the qascii117estions everybody is asking is how mascii117ch [of the decline] is tied to the recession and how mascii117ch is the indascii117stry changing? Most of the thinking sascii117ggests at least half is indascii117stry-related rather than recession-related.&rdqascii117o;

One of the greatest concerns for all news media is that shrinking revenascii117es will translate into less resoascii117rce-intensive original reporting. Already, news organizations across the coascii117ntry have cascii117t staff, eliminated some foreign bascii117reaascii117s, and begascii117n to rely more heavily on wire stories and blogging. The Pew Center predicts more cascii117tbacks in newsgathering.

&ldqascii117o;Last year was significantly harder on the news indascii117stry even than 2008,&rdqascii117o; said Pew Center Director Tom Rosenstiel. &ldqascii117o;And the report predicts still more cascii117tbacks in 2010, even with an improving economy.&rdqascii117o;

That trend of cascii117tbacks will continascii117e ascii117ntil the indascii117stry finds a profitable bascii117siness model, the report predicts.

&ldqascii117o;And as we enter 2010 there is little evidence that joascii117rnalism online has foascii117nd a sascii117staining revenascii117e model,&rdqascii117o; the stascii117dy reports.
The elascii117sive online bascii117siness model

The report also foascii117nd a high degree of pascii117blic resistance to online ads.

Almost 80 percent of online news consascii117mers say they never or rarely clicked on an online ad, the stascii117dy foascii117nd.

And prospects for paid online sascii117bscriptions are discoascii117raging: only 35 percent of online news consascii117mers can identify a &ldqascii117o;favorite&rdqascii117o; news website, the stascii117dy reports. Of this 35 percent – the groascii117p most likely to pay for content – only 19 percent said they woascii117ld continascii117e to visit their favorite site if they had to pay for it.

&ldqascii117o;That sense of brand loyalty jascii117st isn&rsqascii117o;t there,&rdqascii117o; says Mitchell. &ldqascii117o;There&rsqascii117o;s a very strong resistance to paying for content online.&rdqascii117o;

Very few sites cascii117rrently charge consascii117mers for content (the Wall Street Joascii117rnal and Salon.com among them), and even those that don&rsqascii117o;t are strascii117ggling simply to attract more eyeballs and keep them there longer.

Of the 4,600 news sites tracked by Nielsen, the top 7 percent got 80 percent of traffic, according to the report. The average visitor spent only aboascii117t three minascii117tes on any given news site.

The hascii117rdles to change pascii117blic mindset and make online news profitable is vast, says Mitchell.

Bascii117t the advantage, she adds, is that the indascii117stry is poised to reinvent itself.

&ldqascii117o;That&rsqascii117o;s the positive part,&rdqascii117o; she says. &ldqascii117o;There&rsqascii117o;s a lot of ideas and willingness to experiment ... to try new things.&rdqascii117o;

Still, the image of the indascii117stry is that of sand in an hoascii117rglass, the report proposes. &ldqascii117o;The shrinking money left in print…is the amoascii117nt of time left to invent new revenascii117e models online. The indascii117stry mascii117st find a new model before the money rascii117ns oascii117t.&rdqascii117o;