The Pew Research Center’s annual “State of News Media” report is a must-read for US media watchers. This year’s 118-page study provides an extensive exploration of annual variances – and wider longitudinal trends – across newspapers, cable, local and network news, digital outlets, podcasting and audio, as well as more specialist media.
As the report authors note, “the pressures facing America’s newsrooms have intensified to nothing less than a reorganization of the industry itself,” with business models, staff structures and consumption habits, all being affected in many markets on a massive scale.
Here are seven conclusions from the full report worth noting:
Newspapers experienced an annus horribilis
“In 2015,” the study states, “the newspaper sector had perhaps the worstyear since the recession and itsimmediate aftermath.”
The main reasons for this stark conclusion: ad revenues fell by 8 percent (2015 vs 2014) and “average weekday newspaper circulation, print and digital combined, fell another 7 percent in 2015, the greatest decline since 2010.”
Declining audiences and revenue are, understandably, having an impact on employment numbers too. US newsrooms are 10 percent smaller than a year ago. And although there are still c.33,000 full-time employees in newspaper newsrooms across the States, this represents 20,000 fewer staff than 20 years ago.
Alongside cuts in jobs, the report also cites conclusions from Editor & Publisher’s DataBook when commenting that by 2014 the US was home to 126 fewer daily newspapers than ten years’ previously.
Meanwhile, tucked away in the middel of page 21 is the fascinating observation that several non-US newspapers enjoy a considerable footprint in the US; cannibalising the domestic market and showing – even more acutely – the uphill struggle faced by many American publishers:
“….even though Americans largely do not have access to print editions of these papers. U.S. web traffic coming to dailymail.co.uk or theguardian.com (measured in terms of unique visitors) would place them within the top five U.S.-based newspapers by web traffic, while telegraph.co.uk and independent.co.uk would rank in the top 10. The top 50 would include papers from Australia, Canada, India, Ireland and New Zealand.”
For print outlets, digital is yet to stem the tide
During the past year, digital circulation grew. But, at 2 percent, only just. Despite this small growth, digital still only constitutes 22 percent of total newspaper circulation.
In part, this is because physical copies remain more popular than might be expected. More than half of US adults (51 percent) who read a newspaper still do so only in print, compared to 25 percent who read a newspaper across digital-only platforms.
Circulation aside, digital advertising also remains challenging for the printed press.
As the report authors state: “It has been evident for several years that the financial realities of the web are not friendly to news entities, whether legacy or digital only.” They go on to add that although “total digital ad spending grew another 20 percent in 2015 to about $60 billion… journalism organizations have not been the primary beneficiaries.”
Instead, most of these monies find their way into the pockets of major tech companies.
“None of these are journalism organizations,” the report reminds us, “though several – including Facebook, Google, Yahoo and Twitter – integrate news into their offerings.”
For US newspapers, digital now accounts for 25 percent of total advertising revenue, a figure in-line with its digital only audience. Digital revenues have grown a mere 8 percent – as the percentage of their total ad revenue – in 4 years.
Overall digital revenues (in $ terms) were actually down slightly in the past year, so the percentage growth of digital vs. non-digital income has more to do with the increasingly rapid decline of traditional revenue sources, rather than a positive story about successful digital sales.
Mobile news use is broad but shallow
The economic challenge for newspaper outlets is further demonstrated in the battle for attention, eyeballs and engagement.
In this space, many newspapers typically saw large gains in mobile audiences during the past year. However, this was offset by a decline in time spent on publisher’s sites via mobile devices.
For 34 of the US’ top 50 newspapers, time spent viewing content on mobile devices decreased last year, even though 42/50 saw an increase in the number of unique users.
In contrast, desktop visitors are more likely to spend longer on a site than mobile users, reminding us that despite the move to mobile, desktop continues to function as an important part of the online experience for many audiences.
Perhaps this is why it as only in the past year that – across all markets – mobile spending ($32 billion up from $19bn in 2014) overtook desktop ($28 billion down from $31 bn) in the States.
Banner ads are still the digital market leader
The general advertising market is an area which is changing substantially year-on-year.
Video ads are growing fast, worth nearly $8 billion a year, up 46 percent from the year before. But, rich media ads increased faster still, up 50 percent in 2015. They now account for 21 percent of the digital display market.
Nonetheless, the market for banner ads is still growing too, up 13 percent in 2015. Collectively, banner ads account for 44 percent of the digital display market.
Sponsorships, a category which also includes native advertising, trails some way behind. Despite being a source of much industry discussion, this format accounts for a mere 6 percent of total display spending. Although, at $1.7 billion, this market was also up (+9 percent) from 2014.
As news goes increasingly social, we may have seen peak app
A Pew study from earlier in the year revealed 65 percent of US adults had used digital sources in the past week to learn about the 2016 presidential election. News websites and apps led the way (48 percent) followed closely by social networks (44 percent).
When mapped against 2012’s election, the move to social news is quickly apparent. At that time, 17 percent of adults admitted using social media as a source for election news, compared to 35 percent using general “internet sources.”
Although publishing content on social cedes some power to third parties (in terms of both revenue and analytics) it does reflect the preferred news experience for many consumers.
Perhaps this social reality is a driver behind the fact that of the 40 digital news providers Pew studied, 15 had no app at all, with just 14 of them having apps for both iOS and Android.
Given the cost, life cycle and timescale required to create and publish a good news app, some publishers are shifting away from having dedicated apps as part of their distribution strategy.
However, this is not necessarily being replaced by going “all in” with social media.
Of the 40 publishers Pew analysed, many failed to have a wide presence on social networks.
Given the long trumpeted rise of social news, I was expecting this figure – alongside the one for news apps – to be much higher. That it isn’t suggests that many publishers are still pining a lot of their digital hopes on the success of their website.
TV news is proving more financially robust
For all of the doom and gloom found in the print media, as well as the challenges faced by the new breed of digital only providers, TV news typically remains a profitable market.
News providers across Cable (+10 percent), Local TV (+4 percent) and Network TV (+6 percent for evening news and +14 percent for morning shows) all saw revenue gains during the previous 12 months. This growth is seen despite stable, or moderately declining audiences.
Alongside this, retransmission fees are becoming an increasingly lucrative revenue source for TV news channels. They’re expected to bring in $6.3 billion in 2015, a figure that’s five times what it was in 2010.
Across the board, these news audiences, nonetheless, might be smaller than expected. For example, prime-time cable news network’s (CNN, Fox and MSNBC) reach 3.1 million viewers, with daytime audiences being around 2 million. In a country of 320 million inhabitants, this is a small cohort, but it is a powerful one. And one which is clearly attractive to advertisers.
The impact of this year’s Presidential Election may give these markets a further boost in 2016, but as the Pew team note, the pull of digital – and the rise of chord cutting – cannot be ignored.
The authors note, ominously:
“With audience challenges already in view and few immediate financial incentives to innovate, the dilemma facing the TV news business bears an eerie resemblance to the one faced by the newspaper industry a decade ago except for the fact that the digital realm is much more developed and defined today.”
Given that online revenue still account for less than $1 billion of the revenues generated by one subset of this market – the 833 local news stations found across the US – with projections for growth anticipated as being in-line with the wider revenue projects for this sector – this is a market which looks to stay true to its commercial roots for some time yet.
Podcasting remains a niche product
Finally, for all the talk of a podcasting renaissance, only 21 percent of Americans listed to a podcast in the past month, with just over a third (36 percent) ever having done so.
Around half of US adults (49 percent) expressed familiarity with the term “podcasting” a figure which has grown by just +6 percent in six years.
That said, although podcast listeners tend to be dedicated listeners – often listening to multiple shows per week – podcasts account for a mere 2 percent of total audio listening. Traditional AM/FM radio, in contrast, still holds a massive 54 percent share of this market.
So, although the number of podcasting posted online – and downloaded by audiences – has increased, it’s not surprising that the advertising market around this genre – at c.$34 million p.a. – is dwarfed by most other audio platforms.
Relative to audience and market size, podcasting continues to punch above its weight, enjoying considerable column inches and investment. Conversely, we hear little about platforms like satellite audio provider Sirius XM, even though it’s revenue in 2015 stood at $4.6 billion.
It remains to be seen if continued investments in content innovation, analytics and efforts to make audio viral, will see podcasting chip away at the larger audio market.
But, for now, despite the attention – and the high quality output which can be found in this space – it looks set to remain a niche market for the foreseeable future.
Damian Radcliffe is the Carolyn S. Chambers Professor in Journalism at the University of Oregon, a Fellow at the Tow Center for Digital Journalism at Columbia University, an Honorary Research Fellow at Cardiff University’s School of Journalism, Media and Culture Studies and a Fellow of the Royal Society for the encouragement of Arts, Manufactures and Commerce (RSA).
He is an experienced Digital Analyst, Consultant, Journalist and Researcher who has worked in editorial, research, teaching and policy positions for the past two decades in the UK, Middle East and USA. Connect on Twitter at @damianradcliffe