Americans are spending more time consuming news, using devices such as smartphones and tablets to track events on the go. But even as news consumption rises, the traditional media companies that have produced the news aren’t necessarily benefitting.

P-I newspaper boxes. Photo Kurt Schlosser

The 2012 State of the News Media report from the Pew Research Center’s Project for Excellence in Journalism found that five technology companies — Google, Microsoft, Yahoo, AOL and Facebook — now account for 68 percent of all online ad revenue.

The report notes that these technology “intermediaries” are increasingly controlling the future of news.

The authors write:

Two trends in the last year overlap and reinforce the sense that the gap between the news and technology industries is widening. First, the explosion of new mobile platforms and social media channels represents another layer of technology with which news organizations must keep pace.

Second, in the last year a small number of technology giants began rapidly moving to consolidate their power by becoming makers of “everything” in our digital lives. Google, Amazon, Facebook, Apple and a few others are maneuvering to make the hardware people use, the operating systems that run those devices, the browsers on which people navigate, the e-mail services on which they communicate, the social networks on which they share and the web platforms on which they shop and play. And all of this will provide these companies with detailed personal data about each consumer.

Given the changing dynamics, the authors speculate that some of the technology giants may consider buying legacy media properties such as magazines or newspapers in order to strengthen their content offerings.

As the chart above suggests, newspapers are taking it on the chin. Print circulation continues to fall, and the advertisers continue to flee, causing a downward spiral in newspaper revenue.

Consider this factoid from the report: “Losses in print advertising dollars outpaced gains in digital revenue by a factor of roughly 10 to 1.”

In total, the report said that newspaper industry (circulation and ad revenues) has fallen by 43 percent since 2000.

“In sum, the news industry is not much closer to a new revenue model than a year earlier and has lost more ground to rivals in the technology industry. But growing evidence also suggests that news is becoming a more important and pervasive part of people’s lives. That, in the end, could prove a saving factor for the future of journalism.”

Report here.

Comments

  • http://moniguzman.com Monica Guzman

    It’s been amazing to watch: Journalists learn more and more about digital media as the media outlets they write for struggle to keep pace with innovations in content distribution that they can’t seem to beat. It’s a can’t-beat-‘em-join-‘em world as Google, Facebook and Twitter have become essential to getting content out there, even though media outlets see so little in the form of direct revenue from sharing on those sites. Increased page views, yes — but that revenue model has a very limited return. It’s the sites where so much content is being shared — these technology intermediaries — that have proven most capable of capitalizing on their content. Which, of course, is everybody else’s.

  • Guest

    This is truly awful news for journalism. Rather than talented authors producing good material to read, we’re suckling at the teats of 15-word summaries and celebrity worship.

    I really wish more Americans would read at least 20 curated news stories about what’s important in the world, not just in their circle of friends, every day. The amount of ignorance in the world’s only superpower is genuinely horrifying.

  • http://twitter.com/tsupasat tsupasat

    I agree with Guest’s comments about this being truly awful news for journalism. Still, there is a lot of quality content out there (much more than I could possibly read). The problem is finding it. Blogs and sites such as Geekwire can help to curate content. I love the “Around the Web” sections that sites like AllThingsD and CNet offer, pointing me to interesting stories elsewhere, whether they be from traditional outlets or independent blogs. 

    Great photo of those P-I newspaper boxes! What a telling image! 

    • johnhcook

      That’s a great idea on more curation, and I think when done properly and mixed with original journalism it can be quite powerful. GeekWire certainly has interest in building out this functionality over time. Sounds like you’d also be a fan of TechMeme, which is one of the best tech news aggregators out there. (I am personally a huge fan).

      In terms of the photo of the P-I boxes, that’s a bittersweet one for all of us who used to work under the globe. The P-I was a great newsroom, the best I’ve ever worked in with some top-notch journalists.

      That image was taken by Kurt Schlosser, the former page one designer for the P-I. The way things are going, I am not sure that will even be a job title in the next 10-15 years. Kurt is a good friend, and is now working at msnbc.com.

  • Guest

    Lost in all of this is how truly awful it is to attempt to do business with most newspapers. A few years ago I attempted to seel a car using the Seattle Times. I also placed an ad in Ebay, Autotrader, and Craigslist. The Times was 2x as expensive as Ebay and Autotrader and 6x as hard to place the actual ad. It was a ridiculously bad experience and any reasonably competent person for the Times should have been able to figure this out.

    Sorry, no sympathy.

    • johnhcook

      I grew up in a newspaper family (my mom was a reporter) so newspapers are/were very dear to my heart. But I’ve often said that the demise of newspapers has as much to do with the lack of innovation by the newspapers themselves as it does by the tectonic changes in technology. At least based on my experiences, newspaper companies (not the reporters who worked for them) were lazy monopolies who didn’t  invest a dime in R&D. 

      As proud as I am to have worked at some great daily newspapers, including the P-I and the Akron Beacon Journal, newspapers got slow and stodgy and refused to innovate. In that regard, I don’t have much sympathy either. 

    • johnhcook

      I grew up in a newspaper family (my mom was a reporter) so newspapers were very dear to me. But I’ve often said that the demise of newspapers has as much to do with the lack of innovation by the newspapers themselves as it does by the tectonic changes in technology. At least based on my experiences, newspaper companies (not the reporters who worked for them) were lazy monopolies which didn’t  invest a dime in R&D. 
      As proud as I am to have worked at some great daily newspapers which did some amazing journalism, including the P-I and the Akron Beacon Journal, newspapers got slow and stodgy and refused to innovate from a business standpoint. In that regard, I don’t have much sympathy either. 

      • Monica Harrington

        One problem with traditional news media is that the labor force is typically unionized – which means that when you’re in a period of decline, young people rarely if ever get hired.  In the tech world, companies know that you need to keep the pipeline to fresh talent alive.  

        In a fast-changing business with very high margins for success, unions are problematic because they make it harder to adapt and move quickly.  In high tech, cultures that attract insanely great people will always do better than ones that don’t and insanely great people are rarely interested in situations where the emphasis is on protecting the status quo or moving cautiously.

        Just something for news types to think about…..

    • Jhadle

      Newspapers have fumbled at adjusting to the new digital world, but consider that they were monopolies with significant barriers to entry to their business raking in steady and outsize profits for several decades. That doesn’t exactly hone your competitive instincts. 

      Still, newspapers are providing some of the best and only original reporting and I would sure hate to see that fade away. That is one reason I signed up for NY Times digital subscription, even though I was able to get most NY Times content I was interested in for free via Twitter, Google, etc.

  • Renee

    I agree that traditional journalists and publishers were slow to move and innovate. But it also seems that there is less value placed on the skills of seasoned journalists and creative types.  Journalism was never a career path where one got rich, but it also seems that many digital publishers have lessoned their standards when it comes to quality content and are not willing to pay a living wage for quality content. So while programmers make $90k fresh out of college, journalists are being offered $50 or less for their work.  When will this imbalance catch up to the digital content distributors?

  • John Nelson

    From a business standpoint the size of the pie is shrinking and no one can figure out how to fix this.  It pains me to say this but I think in the end there will be very little money on local news…

  • http://blog.CascadeSoft.net @CascadeRam

    I don’t necessarily disagree with the “newspapers got slow and stodgy and refused to innovate from a business standpoint” perspective, but imo the decline of newspapers has been driven by much more than the lack of innovation.

    Today, many liberals get their news from MSNBC, conservatives get their new from Fox News. These channels didn’t exist a couple of decades ago. The advent of online news sites and proliferation of these sites has obviously hurt newspapers.

    Today many other people get  their news from websites which do very
    little original journalism. Some websites do original reporting, but many others monitor twitter trends and
    popular news reports, then rehash the content of a different site into a new post. Readers looking for short-term gratification don’t seem to appreciate the distinction between original reporting and zero-value-add-content-rehashing (or stealing as some may say). So content-rehashing has been very lucrative for many websites.

    Anyway, regardless of cause, imo the decline of newspapers and original reporting will be detrimental to readers/society in the long run.

  • Guest II

    Is the root problem, Newspapers or is it Journalism? Aren’t newspapers really stables for journalists. Journalism is a talent-skill not a business. Newspapers as businesses have been a successful model for serving society and providing journalists a voice and income. Newspapers have served as platforms for businesses that in turn enabled individual economies for journalists. Customers of the newspaper and its advertisers have interacted financially, exchanging value for money to fund the stable and its journalists. Newspapers became non-readers and fiscally irresponsible and led their journalists to compromise their investigative fact reporting. As a result the consumer and the business community lost their reliable relationships and money sought out another channel. 
    Overlooked is the news editor, the missing necessary news element. The editor is the interface between the newspaper business and its journalists insuring honest value for the consumer $s. Today’s writers (bloggers, etc) are not normally journalists but op-ed writers and without an editor they easily become self-serving pitch persons. Journalism in once respected newspapers has yielded to all opinion all the time. 
    Many consumers now look to the feelings of their friends regarding events for their take-away. Factual reporting is alien and requires time for thoughtful processing. Consumer indiscriminate demand for immediacy trades rumors for news. The loss of responsible newspapers, print and digital, is a loss for society. Hopefully proper stables, ethical journalists and thinking readers are on the horizon.

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