While ad revenue for traditional media is still on the decline and newspapers continue to layoff staff, there are signs of hope including new potential revenue streams, according to Pew Research Center’s State of the News Media 2014 report.
Potentially game-changing shifts in revenue, jobs, technology, content, and consumer behavior are taking place within the news media industry, the report found. Through close examination of all of the research, six major trends emerged. Below is a summary of those trends:
1) Thirty of the largest digital-only news organizations account for about 3,000 jobs and one area of investment is global coverage. Vice Media has 35 overseas bureaus; The Huffington Post hopes to grow to 15 countries from 11 this year; BuzzFeed hired a foreign editor to oversee its expansion into places like Mumbai, Mexico City, Berlin, and Tokyo. This comes amid pullbacks in global coverage from mainstream media. International reporters working for U.S. newspapers have declined 24% from 2003 to 2010. As the new digital native outlets continue to add staff, the country may be seeing the first real build-up of international reporting in decades.
2) So far, the impact of new money flowing into the industry may be more about fostering new ways of reporting and reaching audience than about building a new, sustainable revenue structure. The U.S. news industry brings in a little over $60 billion of revenue annually. Advertising accounts for roughly two-thirds of this amount, most of which remains tied to legacy forms. New kinds of earned revenue streams like event hosting and web consulting account for about 7%, while investment sources such as venture capital and philanthropy amount to only about 1% of the total. One part of the equation worth exploring is what kind of savings occurs at digital news startups free of the legacy infrastructure, but taking on the newer costs of technology development and maintenance.
3) Social and mobile developments are doing more than bringing consumers into the process – they are also changing the dynamics of the process itself. New survey data finds that half (50%) of social network users share or repost news stories, images, or videos while nearly as many (46%) discuss news issues or events on social network sites. With broader mobile adoption, citizens are playing important eyewitness roles around news events. Roughly one-in-ten social network users have posted news videos they took themselves. On social sites and even many of the new digital-only sites, news is mixed in with all other kinds of content – people bump into it when they are there doing other things. This means there may be an opportunity for news to reach people who might otherwise have missed it, but less of that may be in the hands of news organizations. Only about a third of people who get news on Facebook follow a news organization or individual journalist. For news providers, this means that a single digital strategy will not be enough.
4) New ways of storytelling bring both promise and challenge. One area of expansion in 2013 was online news video. Ad revenue tied to digital videos overall grew 44% from 2012 to 2013 and is expected to continue to increase. For now, though, its scale is still small, accounting for just 10% of all U.S. digital ad revenue. YouTube alone already accounts for 20% of these revenues and Facebook has entered the digital video ad market and is expected to quickly account for a significant portion of these dollars. News media outlets are taking notice with The Huffington Post celebrating its one-year anniversary of HuffPost Live. Also, the Texas Tribune held a successful Kickstarter campaign to raise funds for the purchase of equipment to stream live video coverage of the 2014 Texas governor’s race.
5) Local television, which reaches about nine in ten U.S. adults, experienced massive change in 2013, change that stayed under the radar of most. Nearly 300 full-power local TV stations changed hands in 2013 at a price of roughly $8 billion. The number of stations sold was up 205% over 2012 and the value up 367%, with big owners getting even bigger. If all the pending sales go through, Sinclair Broadcasting alone will own or provide service to 167 stations in 77 markets, reaching almost 40% of the U.S. population. As of early 2014, joint service agreements exist in almost half of the 210 local TV markets nationwide, up from 55 in 2011. And fewer stations are producing their own newscasts.
6) Dramatic changes underway in the makeup of the American population will undoubtedly have an impact on news in the U.S., and in one of the fastest growing demographic groups – Hispanics – we are already seeing shifts. The Hispanic population in the U.S. has grown 50% from 2000 to 2012 – to 53 million people. Most of that growth has come from births in the U.S. rather than the arrival of new immigrants, reversing a trend from previous decades. In response to this trend, more general-market media companies – like ABC, NBC, Fox, and The Huffington Post – have started Hispanic news operations. Since 2010, six national Hispanic outlets have been launched all of which are either owned in full or in partnership by a general-market media company. Not all of them have been successes, however. Earlier this year, NBC Latino – a website-only outlet – closed, after only 16 months. At the same time, Fusion, a joint effort by ABC and Univision, initially described the channel as aimed at Hispanic millennials but later switched to aiming it at millennials more broadly – currently the largest and most diverse generational group in the U.S. As demographic shifts within the U.S. continue, so too will their impact on the news ecosystem.
Want to hear more about the changing media landscape? Distinguished panelists including top media players like the executive producer of “Frontline” and a Pulitzer Prize winning Boston Globe columnist will discuss the changing media landscape during “Where is the Future of the Media?” from 5-8 p.m. on Thursday, April 17 at Boston University’s Photonics Center, 8 Saint Mary’s St., 9th Floor, Boston.