Online news and video ventures continue to grow and are seeing an influx of investment, but the newspaper and cable TV industries — both in decline — continue to dominate audience share, revenue and jobs in the media industry, according to the Pew Research Center’s State of the Media 2014 report released Wednesday.
If there is good news, it’s that the excitement around digital news outlets has brought about 5,000 full-time professional media jobs. But the newspaper industry remains the largest producer of original reporting, and its employment numbers dropped another 6.4 percent in 2012, with more losses anticipated when the 2013 numbers are released.
While the new investment in digital platforms is not nearly enough to replenish the jobs — and subsequent news production — that have been lost, researchers said news consumers have some reason to be hopeful. Local, international and investigative reporting are the main gaps that the new ventures are filling as newspapers continue to dwindle, close international bureaus and shutter investigative units.
“Last year it was pretty gloomy,” said Mark Jurkowitz, associate director of the Pew Research Center Journalism Project. “We were concerned about the continuing, primarily economic problems that were afflicting legacy media, most acutely the news sector, and there was concern that we just weren’t seeing a lot of forward momentum.
“We’re now seeing a lot of energy, decent amount of investment, seeing experimentation and creativity.”
Big-time digital players such as eBay co-founder Pierre Omidyar and Amazon founder Jeff Bezos made major investments in digital and legacy news outlets. At the same time, top-notch journalists are jumping into the digital space. “In the past six months alone, there’s been a migration of really talented journalists who are moving into this new world,” Jurkowitz said.
“Having said that, the underlying fundamentals didn’t change in 2013.”
While the new investment in digital platforms is not nearly enough to replenish the jobs — and subsequent news production — that have been lost, researchers said news consumers have some reason to be hopeful.
Despite the buzz around new ventures such as Omidyar’s First Look Media, the rapid growth of Vice — in which Rupert Murdoch bought a $70 million share last year — and the ongoing popularity and growth of The Huffington Post, it remains to be seen whether any of these business models will stick. Vice is reported to be profitable and projecting a doubling of revenue from 2013 to 2014, but Pew reports Huffington Post is only “flirting with profitability” and First Look Media isn’t expected to break even until five years from now.
“There isn’t going to be one business model to replace the one the Internet broke,” New York University journalism professor Jay Rosen told Pew. “The problem keeps changing.”
Jurkowitz said that making money online has been troublesome for traditional news outlets, which leaves the question of how the new ventures will survive.
“The big problem has been the failure to be able to monetize digital content for legacy news organizations,” Jurkowitz said. “If there hasn’t been a good business model for most legacy publications in this country, then how are we going to have one for a company that doesn’t have a legacy product at all?”
One source of funding that’s on the rise is subscriptions. While the classic newspaper model was an 80–20 split (with 80 percent of a newspaper’s funding coming from advertising and 20 percent from subscriptions), it is changing out of necessity as advertising continues to dwindle. Jurkowitz said ad revenue has been cut in half since 2006 and noted that The New York Times recently announced it made more money from subscriptions than from advertising.
While a reliable business model has yet to emerge, 2013 is looking like a pivotal year for the return of some international and investigative reporting that has eroded in the last several years.
“One of the more optimistic findings we had is that in a time when most people accept the reality that we’re getting less international coverage than we used to, some of these organizations are beginning to try and fill this gap pretty aggressively,” Jurkowitz said, noting the rise of the Boston-based Global Post, Huffington Post’s anticipated jump to 15 international editions, “and Al Jazeera America is certainly part of that conversation.”
If there hasn’t been a good business model for most legacy publications in this country, then how are we going to have one for a company that doesn’t have a legacy product at all?
Pew Research Center
In addition to sorting out a successful business model, news outlets continue to struggle with the riddle of social media.
Facebook, for example, drives many users to news sites, but most Facebook users say they visit the site for things other than news. Jurkowitz said a separate Pew analysis of 26 of the most shared news websites showed that visitors from Facebook stay on news sites for less time and return less often than those who visit the sites directly.
Still, social media is helping drive viewing and creation of online news video, according to a survey included in Pew’s study that found 36 percent of adults watch news video online and close to the same percentage (30 percent) get that news from Facebook. And 1 in 10 social media users have posted their own videos of news events on social sites. Not surprisingly, younger people watch online news videos more — 48 percent of 18- to 29-year-olds and 49 percent of 30- to 49-year-olds, as opposed to 27 percent of 50- to 64-year-olds and 11 percent of those 65 and older.
“I think news organizations and others are trying to figure what’s the best way to make use of this audience,” Jurkowitz said.
The appetite for news, however, appears to remain, and the new financing of journalism ventures is reason for optimism.
“I think people will look back at 2013 and recognize it as a year of energy, and investment, and interesting players getting into the game with different skill sets,” Jurkowitz said, noting Omidyar’s and Bezos’ previous successes in the digital world. “This is a year when people really tried new things. Whether it turns out to be a turning point is in a future script. That’s still going to depend on finding this elusive business model — or business models — that is going to sustain quality journalism going forward.”