While eyes remain on the impact of the recent tsunami that devastated Japan, the latest State of the News Media report from the Pew Project for Excellence in Journalism describes another kind of tsunami — digital news.
This year's overview of the major trends impacting American journalism brings bad news for news organizations because "in the digital realm, the news industry is no longer in control of its own future."
While some may think the media has been obsessed with fretting about its own death, on the business side major media brands haven't done enough to adapt to digital, mobile and social media.
One of the game-changers in the business, says the report, is the fact that the 20th century saw the news media as the intermediary, but in the 21st century, the news industry was "late to adapt" and didn't acknowledge the rise of "a new intermediary: Software programmers, content aggregators and device makers [who] control access to the public."
This shifting landscape is demonstrated through some dramatic statistics: 47% of all Americans now get some form of local news on a mobile device, according to Pew's latest research. In 2010, every news outlet was stagnant or declined except the web. For the first time, more people said they got the news from the web than from newspapers. For the first time, more money was spent on online advertising than was spent on newspaper print advertising. And by January of this year, about 7% of Americans reported owning some kind of tablet.
Social media is now a major news source, with user reports augmenting links from traditional media outlets on Facebook and Twitter. LinkedIn, through its new newsfeed, and even personal Tumblrs and blogs are all competing to aggregate the news where editors and journalists once acted as gatekeepers and programmers.
Witness the ascension of The Huffington Post, the SEO- and social media-savvy web media brand recently acquired by AOL. Arianna Huffington may have been slightly tongue in cheek by referencing The Washington Post in naming her site, but turns out she was prescient as it's just one example of web properties outlasting traditional newspapers in the fight for digital dominance. That said, AOL has yet to figure out the online news business; hence their recent merger.
Another interesting development that differentiates the online players from traditional news sources is their access not just to content, but to audience data. In fact, says the report, "That data may be the most important commodity of all. In a media world where consumers decide what news they wan 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. That knowledge — and the expertise in gathering it — increasingly resides with technology companies outside journalism."
Two other major media trends uncovered by the report are:
1. Localization: The trend is towards media that is produced and delivered locally, especially in the online world. Already, says the report, 40 percent of all online ad spending is local. That includes both advertising and local news content. Still, producing local news effectively on an on-going basis is a challenge. Larger organizations like Yahoo!, Topix, and Examiner have made inroads into local reporting. Most recently, AOL has entered the area with local reporting through Patch. But the need for local news is not yet being met in a consistent way by any one source.
2. Paying for the News: At issue for many traditional newspapers is simply how to survive the loss of revenue. Traditional subscriptions continue to decline while readers demand and can get most news for free online. So far, according to the report, only about three dozen U.S. newspapers offer some kind of paid content on their websites. Of those, only 1 percent of users have opted to pay. Even among early adopters, only 10 percent of those who have downloaded local news apps paid for them. Those news organizations that have been successful in charging for news, like the Wall Street Journal and the Financial Times, target business executives who will pay for access to financial and business news and information. A successful pay-for-content scheme still doesn't exist in the online news world for consumers. It appears that a future online model will be made up of many different kinds of revenue.
The digital upheaval, says the Pew report, is resulting in "a news ecology full of experimentation and excitement, but also one that is uneven, has uncertain financial underpinning and some clear holes in coverage." Like an earthquake, it seems, the news industry is in a state of flux and hardly on firm ground. As the rumbling continues, one has to wonder what will become of the great news legacy brands — the New York Times, the Washington Post, the Philadelphia Inquirer, the Chicago Tribune, the Los Angeles Times and others — in this new digital media world.