The 2009 edition of Pew’s annual State of the News Media Report paints a fairly bleak picture of what 2008 actually looked like, and ventures to guess that things are not going to get much better in 2009. The key finding are here, read it for all sectors. Below are some pulled quotes and points pertinent to local television and online:
Audience: The big online sites are pulling the big audiences now, which are drawing them with aggregated content from wires and legacy media. Yahoo, MSNBC, CNN, and AOL are the top news sites, growing at twice the rate of last year. The 24-hour “on demand” culture now rules, scheduled broadcasts and established news cycles are broken.
Local television remained the nation’s most popular source for news, but, on a percentage basis, it was among the biggest losers of audience in 2008. Just over half of Americans are now regular viewers (52%), according to a survey, down from nearly two-thirds (64%) a decade earlier. Viewership of local evening newscasts, those around the dinner hour, fell by an average of 4.5%, according to an analysis of ratings data by PEJ. Morning and mid-day newscasts held basically stable. Even the trend toward adding new shows in new timeslots seems to have slowed.
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Economics: The economic downturn has hit the media industry at a very bad time, and the ad forecast for 2009 is downright chilling, but this doesn’t account for all of it. The report finally recognizes that the Internet breaks supplychains and middlemen, saying the current advertising spending trend “also reflects the powerful structural shifts brought on by digital technology, which has allowed those who want to reach consumers to do so without the news media as intermediary.”
In local television, a deteriorating market for advertising had analysts scrambling to revise their estimates downward as the year wore on. Most concluded that the final revenue numbers were as much as 7% lower than the year before and that profit margins had probably been cut in half. And that came during an election, a bad sign for a sector that counts on political ads to replenish coffers every two years. Local television is being particularly hurt by the collapse of the auto industry, its biggest advertiser.
In overall ad spending, cable is gaining the biggest share where newspapers and magazines are losing the most. Online ad spending is almost completely benefiting Google and other search providers.
Investment: Aside from cable, there was virtually no investment in newsrooms in 2008. 2009 could be worse.
The news teams Americans say they most rely on — the familiar faces at the local television stations — also shrank in 2008. Fewer stations reported hiring, and the median staff size slid from an all-time high the previous year as news directors looked for ways to combine newsgathering functions. The move to expand or add news programs also appeared to be slowing. A big capital infusion in equipment for the conversion to digital broadcasting came to a close. And by the end of the year layoffs were accelerating.
Ownership: Newspaper stock prices fell 83% in 2008. People are waking up to the reality that stand-alone news companies can survive as publicly traded stocks is pretty much dead. There are no buyers for media assets.
In local television, which had been a financial bright spot, the situation dimmed. With credit tight and revenues declining, the number of television stations bought was half the figure reported the year before and the lowest since 2004. According to one accounting, 96 stations were sold from January to December 2008, with a total value of $866 million. This compared with 270 in all of 2007 for a value of $4.6 billion. The stock values of publicly traded companies that own stations plunged.
Digital Trends: Expansion and innovation are coming from outside of traditional news industries. It is clear that banner advertising in the current form cannot supply sufficient revenue to replace lost dollars and support worldwide newsgathering operations. No media company has figured out a way to monetize search advertising paired with news content.
Economically, one growing cause of concern for news is that national websites and aggregators like Google are fast making inroads in attracting local advertising. That means even if online advertising returns to big growth rates of two years ago, it may not help news organizations as much as once thought. Over the past decade, the share of Internet advertising derived from local businesses has doubled, by some estimates to 40%, but most of those ads (57% in 2007) are now going to national Internet-only sites like Google and Yahoo, not to local news organizations.
In online content, citizen news sites that do original reporting gained some steam in 2008, especially in areas where traditional coverage has vanished. But, according to a study of citizen sites in 46 markets, they remain far from a substitute for legacy media. Their range of topics is narrower, the sourcing somewhat thinner and the content often not updated even once a day. They also trail legacy news sites in the various methods for distributing their content.
Finally, the key findings summary notes that “Refugees of the mainstream press helped launch or staff a number of independent new ventures online.” There is a review of some of the more notable new ventures here.