Pew Finds Digital News Consumption Up but Revenue Dwindling

Industry less equipped to cover news, report finds

From big newspapers to local TV broadcasts, the news media continue to face severe challenges even though digital consumption is rapidly growing, according to the Pew Research Center’s 2013 State of the News Media report. With economic and audience trouble, the news industry is “more undermanned and unprepared to uncover stories, dig deep into emerging ones or to question information put into its hands,” the Pew report stated.

The biggest growth in news consumption was digital, due mostly to the growing ownership of digital devices, according to the report, slated for release today. Thirty-one percent of adults owned a tablet as of 2013—about four times the share of tablet owners in May 2011—and 31 percent of new tablet owners reported spending more time with the news, while 43 percent reported that they are adding to the news they consume. The top 25 news sites saw a combined 7 percent increase in unique monthly visitors in 2012, according to Pew.

A larger digital news audience isn’t translating into much revenue, though. Digital advertising grew 17 percent in 2012, according to eMarketer, but the news media are having trouble taking advantage of that growth. In the newspaper industry, for instance, digital ad revenue grew just 3 percent in 2012—not nearly enough to stem overall ad revenue losses. National advertisers are increasingly turning to Google, Facebook and other large networks to sell local ads through geo-targeting, as are local advertisers that once relied on news websites. And while mobile display advertising is continuing to expand, it's similarly dominated by big tech companies. 

At the same time, two rapidly growing digital advertising categories could provide a solution for news outlets, Pew reported. Video advertising, the fastest growing category, expanded 46.5 percent in 2012. Sponsorship advertising, encompassing everything from Promoted Tweets to native ads, was up 40 percent in 2012. Traditional print outlets like The Atlantic and Forbes, as well as sites like Gawker and BuzzFeed, have increasingly relied on native ads to support digital revenue, while brands like Fortune are lending their writers to outside companies to produce branded editorial content.

Print media, continuing a familiar theme, were especially hard hit in 2012. Cutbacks were severe at newspapers where employment is down 30 percent since its peak in 2000, and the total number of employees has fallen below 40,000 for the first time since 1978. Magazine and newspaper revenue also continued to decline sharply, by 10.4 and 5.9 percent, respectively.

As for TV news, Pew found that local news was especially hard hit in the past year. Local TV audiences were down across every key time slot and all networks in 2012, with overall audiences falling 6.5 percent. The decline was especially sharp among younger viewers. According to Pew data, regular local TV viewership among adults under 30 fell from 42 percent in 2006 to 28 percent in 2012. People are increasingly turning to digital outlets for breaking news, weather and traffic content—traditionally the bread and butter of local news. Advertising revenue was up among local TV news, but that was mostly due to massive spending on election-driven advertising.

Viewership troubles were also present in other areas of TV news where network broadcasts saw audience numbers drop about 2 percent and cable news channels’ audiences grew less than 1 percent, despite the fact that election years usually equal big gains for cable. Pew noted that while network TV news has remained mostly the same, the content mix on cable and local has shifted substantially. To save money, daytime cable TV news is relying more on interviews and less on live event coverage, while local TV news has increased the amount of traffic, weather and sports coverage while producing fewer (and shorter) packaged stories.

The public’s awareness of the news industry’s financial trouble is limited, the report found. However, the public is noticing a decline in both the amount and the quality of news content. Because of that, nearly a third of U.S. adults—primarily well-educated, wealthy ones who are more likely to pay for news content—have abandoned a specific news outlet, saying that it “no longer provided them with the news they were accustomed to getting.”