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In its annual review of the media industry in the United States — which it published online early Wednesday morning — the Pew Research Center says the news business looks somewhat healthier than it has in past years, thanks in part to an influx of new investors and new jobs being offered by rapidly-growing digital-native entities like Vox and First Look Media. However, the report notes that traditional players still make up the bulk of the industry and that as a whole the industry continues to shrink rapidly, both in jobs and revenue.
In the preamble to the report, which runs to more than 150 pages, the Pew Center says that 2013 and early 2014 brought “a level of energy to the news industry not seen for a long time.” The authors added that some of the new players who have emerged and/or broadened their ambitions — such as BuzzFeed, which now has a news staff of 170, or First Look with its $250-million budget from eBay founder Pierre Omidyar — have “created a new sense of optimism, or perhaps hope, for the future of American journalism.”
“The level of new activity this past year is creating a perception that something important, perhaps even game-changing, is going on. If the developments in 2013 are at this point only a drop in the bucket, it feels like a heavier drop than most. The momentum behind them is real, if the full impact on citizens and our news system remains unclear.”
Tentative signs of optimism are appearing
“New players are boosting reporting power, technological talent and financial resources going into news, creating a level of energy not felt for a long time,” Amy Mitchell, Pew Research Center’s Director of Journalism Research, said in a statement about the report. “The momentum is real, but it remains to be seen whether these new ventures will flourish and extend to the variety of ways in which the public consumes news and information.”
In the first-ever accounting of jobs created by new digital companies — a number based on surveys and public information — Pew said that about 5,000 full-time jobs had been created at nearly 500 digital news outlets. However, it also added that the “vast majority of bodies producing original reporting still lie within the newspaper industry,” and full-time employment in the industry fell by another 6.4 percent in 2012, with more losses expected in 2013.
“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.”
While the money that has been injected into the industry — whether by venture capitalists funding companies like Vox Media or by philanthropists such as Omidyar — is a welcome addition to the pie, the Pew report notes that it still amounts to “only a sliver of the money supporting professional journalists,” about 1 percent of the total. However, the center adds that these kinds of investments do signify “a pivot in the news world… a series of signposts pointing toward the ways journalism may be paid for in the years to come.”
Business models remain uncertain
And what of paywalls? The Pew Center says that what it calls “audience-driven revenue” or subscriptions accounts for about 25 percent of the total financial support system for journalism, a number that has grown both in total dollars and as a percentage of the whole as more and more newspapers and other media outlets have set up paywalls and metered plans. But the report suggests this is not likely to save the industry from more pain.
“This growth does not necessarily mean that more individuals are paying for news. Instead, the data suggest that more revenue is being squeezed out of a smaller, or at least flat, number of paying consumers.”
As for advertising, which still generates more than two-thirds of the money that supports the news business (although its contribution has fallen by 50 percent in the past decade), the Pew report said the industry is “in a state of churn.” Print advertising continues to decline sharply, TV advertising remains stable but likely won’t continue as viewers migrate to the web, and digital ads aren’t growing fast enough to fill the gap. New forms of advertising are gaining momentum, the report says, but “seem to favor a scale achievable only by few.”
What will the business models of the future look like? Even some of the major players and observers in the industry aren’t sure. “There certainly won’t be one [business model],” Pew quotes Eric Bates of First Look as saying, while First Look advisor Jay Rosen adds: “There isn’t going to be one business model to replace the one the internet broke. The problem keeps changing.”
Post and photo thumbnails courtesy of Shutterstock / Carlos Andre Santos