Mobile is reshaping news consumption in the US, but with the increase in ‘social’ news providers and aggregators and a decrease in traditional revenue models, will there continue to be an independent news sector available for all citizens? Guy Daniels reports
The Pew Research Center has just published the latest edition of its annual ‘State of the News Media’ report, the ninth edition of its annual series on the status of American journalism. Produced by the Center’s non-political ‘Project for Excellence in Journalism’, it examines how news consumers use social media and how mobile devices are changing the news business.
With more than four in ten American adults now owning a smartphone, one in five owning a tablet, internet usage on the increase and a deeper immersion in social networking, it would appear that the future looks good for digital news consumption. Monthly unique audience to the top 25 news sites was up 17 per cent, with 17 of those sites being legacy news outlets. 51 per cent of smartphone owners use that device to get news, as do 56 per cent of tablet owners. But the authors of the Pew report say this new digital era brings mixed blessings for news organisations.
In 2011, faced by the threats of online news specialists, the traditional news operations also took new steps to monetise the web in their own right. About a tenth of surviving US dailies have launched some sort of digital subscription plan or paywall. Some news companies are creating their own digital ad sales networks to cut out third parties, whilst a few others have opted out of the Apple and Google app world to create HTML5 based mobile web apps.
Yet Pew’s latest research finds that these efforts are still limited and that few news companies have made much progress. Part of the problem is an increasing decline in print media – when circulation and advertising revenues are combined, the US newspaper industry has shrunk 43 per cent since 2000. Of all media sectors, newspapers suffered the most in 2011.
Weekday print circulation fell about 4 per cent and Sundays fell one per cent, although digital audiences are growing.
The research company says the news industry is not much closer to a new revenue model than a year earlier and has lost more ground to rivals in the technology industry – despite the fact that news is becoming a more important and pervasive part of people’s lives.
A year ago, Pew concluded that: “the news industry, late to adapt and culturally more tied to content creation than engineering, finds itself more a follower than leader shaping its business.” It now says that in 2012, that phenomenon has grown, and the gap between the news and technology industries is widening: “technology intermediaries now control the future of news”.
The report indentifies six major trends for the US news sector in 2012: mobile, social media, digital subscriptions, increase in TV news viewership, and privacy.
Report authors Amy Mitchell and Tom Rosenstiel say that as sales of e-readers and tablets grow, consumers are reading more immersively on these devices than on earlier technology:
“More than a quarter of the population, 27 per cent, now get news on mobile devices. And these mobile news consumers are even more likely to turn to news organizations directly, through apps and home pages, rather than search or recommendations — strengthening the bond with traditional brands. Some rural populations like Native Americans who largely missed the desktop generation, are now moving straight to mobile options that do not rely on broadband access.”
Although 54 per cent of the online US population are now active users on Facebook (about 133 Americans), and over 24 million are active Twitter users, the Pew researchers don’t believe that social media are overwhelming drivers of news – at least not yet.
“The notion that large percentages of Americans now get their news mainly from recommendations from friends does not hold up. No more than 10 per cent of digital news consumers follow news recommendations from Facebook or Twitter ‘very often’, the survey finds. And almost all of those who do are still using other ways like going directly to the news website or app as well.”
What isn’t in doubt is that more US news outlets will move to digital subscriptions in 2012, just to survive. Over 150 publications already have some kind of digital subscription model, and the Pew researchers believe another 100 will follow in the coming months. This is partially influenced by the success of The New York Times ‘metered model’, which now has some 390,000 subscribers and resulted in almost no loss in more casual online traffic. Mitchell and Rosenstiel say that with newspapers losing more than half their ad revenue industry-wide since 2006, then without an infusion of digital subscription revenue many will not survive:
“Over the last five years, an average of 15 papers, or just about one per cent of the industry, has vanished each year. A growing number of executives predict that in five years many newspapers will offer a print home-delivered newspaper only on Sunday.”
The reports also adds that the mobile ad landscape shifted in 2011. Text message advertising had been the largest type of mobile advertising, but in 2011 eMarketer research found that search now dominates the mobile ad space. The bad news for the establishment is that traditional news companies are essentially cut off from this growing revenue stream, which amounted to $653 million, or 45 per cent of the mobile ad market.
But what’s bad news for newspapers is good news for the ICT companies. That revenue is still out there, it’s just being picked up by OTT players. And with a healthy consumer appetite for news, surely everything is rosy? Not quite. It takes a lot of investment, effort and experience to run a news media outlet – the technology companies are happy to steal the revenue, but are they prepared to invest in the product? Who’s out there breaking stories? Who’s out there holding elected officials to account? Who’s out there bringing editorial judgement to the selection and presentation of news? Not the online aggregators. Independent news is essential for a democratic society – it has to survive. There’s a responsibility that comes with reshaping the news landscape, a responsibility that is not clearly understood by the ‘disruptors’.
please sign in to rate this article