Date

Thu - 21.09.2017


Pew Report on the US newspaper industry: show me the money

Pew Report on the US newspaper industry: show me the money

Ad revenue falling, print circulation down, newsroom cuts, no new business model in sight… It’s not uncommon to read reports about the dire situation that the US newspaper industry finds itself in. But are things really as bad as all that? As the Pew Research Center’s Project for Excellence in Journalism publishes its annual report today on the state of American media, we have a chance to step back and look in greater details at how the US newspapers handled their search for a new business digital business model over the course of the last year.

There’s no denying that the figures make grim reading, particularly when it comes to newspapers’ advertising revenue. Pew references Newspaper Association of America statistics, which estimate that online ad spend at papers grew by $207 million, but print ad spend fell by $2.1 billion, meaning that for print losses at US papers were ten times greater than digital gains.

According to Pew, newspaper ad revenue stood at $23.9 billion in 2011, less than half what it was in 2000, and is predicted to fall further this year. With circulation revenues contributing just under $10 billion, the total value of the newspaper industry is now $34 billion a year, compared to $59.2 billion in 2000. And it gets worse: Pew describes how in 2011 print circulation declined, stock prices fell and several newspapers entered bankruptcy proceedings. Pew describes net profit margins at most newspapers as “razor-thin” and notes that “most papers achieved profitability largely through cutting”.

However, while there’s no doubt that this is not a cheerful read, the report focuses on a couple bright spots. Pew notes that Sunday papers are doing relatively well as circulation numbers have stabilized somewhat and preprint insert advertising has proved comparatively resilient. As a result, writes the report, many papers are pushing customers to subscribe to Sunday editions rather than sign up to receive the paper every day of the week. Pew notes that, in an earlier report, news executives predicted that in five years time, many newspapers might only put out a print edition on Sunday.

Pew delves into other trends in the news industry, such as the rise of metered paywalls. Currently, according to statistics from Newspapers & Technology, around 150 small to medium-sized daily metros have put up metered paywalls in the style of the New York Times in a bid to increase circulation revenue while not harming traffic. Often, the charges are bundled with print subscriptions, so they don’t just increase digital revenue, they also “shore up print circulation”. As Gannett prepares to follow suit and start charging for access to its papers (with the exception of USA Today) its clear that paywalls are becoming increasingly commonplace. But the report concludes that subscription fees for web access won’t necessarily make a big difference to newspaper finances straight away, although they may put papers in a better position to “wean themselves away from print” in the future.

While the rise of paywalls has been extensively reported, a move by traditional news organisations to find new digital revenue through licensing fees has received comparitively less coverage. Pew writes notes that the AP and 28 other news organisations have clubbed together to launch a licensing organisation called NewsRight, with a view to making money from companies that aggregate their content. For now, the association is only targeting businesses who sell aggregated content to customers who pay licence fees (Meltwater, for example) and even this initial, limited goal may prove a struggle. Pew notes that president of NewsRight David Westin acknowledges that “success is far from guaranteed”. However, if NewsRight is successful the report speculates that “asking royalties from bigger players and for aggregated short summaries may come later”.

What’s the human cost of the continuing struggle to find a new, sustainable, digital business model? The newsrooms cuts described in the report are grim, and as a result, coverage of local and state government and specialist topics such as religion and science have suffered. However, Pew notes that its difficult to judge how many jobs are being lost overall, and how many traditional journalists are being replaced by new digital hires. What’s more, while jobs are being lost across the American news industry as a whole, Pew notes that the financial, political and wire service sector is bucking the trend. Reuters and Bloomberg are both growing, writes the report not only employing new people, but "hiring away stars from other organizations”.

Changes may be taking place, but the Pew emphasises that they are slow and painful. "Attachment to daily news routines or old sales and circulation department cultures stands squarely in the way of progress on the digital side," the report concludes. And the slow transfer to digital is a grind on people who work in the industry. “The effort has been wearing for company executives and publishers trying to lead to a destination unknown as well as for business and news staffs perpetually asked to do more with less,” writes Pew.

Sources: stateofthemedia.org, Newspaper Association of America, PEJ, News & Tech, TIME, SFNblog 

Author

Hannah Vinter

Date

2012-03-19 15:11

Shaping the Future of the News Publishing


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