Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Newspaper boxes on display on the streets of Philadelphia. (GEORGE WIDMAN/AP)
Newspaper boxes on display on the streets of Philadelphia. (GEORGE WIDMAN/AP)

U.S. media outlets reeling? Who knew? Add to ...

News organizations may be looking for ways to make money from the content they produce, but a new study suggests most readers don’t have any idea about the troubled finances at American media outlets.

As advertising pulls back in newspapers, publishers have turned to paywalls in the hopes readers would subsidize the news their papers produce. But a paper from the Pew Research Centre – a journalism think tank based in the United States – found 60 per cent of Americans “have heard little or nothing at all about the financial problems besetting news organizations.

More Related to this Story

Newspapers and magazines have been reeling since the recession as print advertising declines at a rapid pace. They once hoped digital advertising would make up the difference, but growth online hasn’t been sufficient to replace the lost print revenue. About a third of American daily papers have launched pay models on their websites to help fund their operations, but it’s not clear yet whether this model will be sufficient to steady the industry.

While they may not care about the industry’s finances, they do appear to care about the side effects. A third of news consumers said they have stopped turning to a news outlet because “it no longer provide them with the news they were accustomed to getting.”

“In the news media, a continued erosion of reporting resources has converged with growing opportunities for news makers, such as political figures, government agencies, companies and others, to take their messages directly to the public,” the report states.

The report estimates newspaper cutbacks have pushed newsroom employment down 30 per cent since 2000, and that the number of people working in newsrooms has dropped below 40,000 for the first time since 1978. Television newsrooms are also challenged, the report found, with audiences down across “every key time slot” in 2013.

“News stories have shrunk in length, and, compared with 2005, coverage of government has been cut in half and sports, weather and traffic now account for 40 per cent of the content,” the report stated. “On cable, coverage of live events during the day, which often requires a crew and correspondent, fell 30 per cent from 2007 to 2012, while interview segments were up 31 per cent.”

The report’s authors said “this adds up to a news industry that is more undermanned and unprepared to uncover stories, dig deep into emerging ones or to question information put into its hands.”

“There are all sorts of contributors in the evolving landscape of news and, in many ways, more opportunities for citizens to access information,” Amy Mitchell, acting director of the Pew Research Center’s Project for Excellence in Journalism, wrote in a release. “But there are more signs than ever that the reduced reporting power in the news industry is having an effect and may weaken both the industry’s capacity to produce in-depth journalism and its credibility with the public at the same time that others are gaining more voice.”

Other findings:

TV Trouble: “Local TV remains a top news source for Americans, but the percentage who say they watched it yesterday is dropping – and dropping sharply among younger people. Advertising revenues were up for the year, but were largely a result of the record $2.9-billion in political advertising.

Digital dilemma: “In the rapidly growing market for mobile display advertising, six companies already draw 72 per cent of the market share–none of which produce news. Facebook is one of the six, and though its first mobile ad product came in mid-2012, the company says mobile display already accounted for 23 per cent of its fourth quarter ad revenue. Local digital advertising, a critical ad segment for news as the majority of outlets cater to a local audience, is also growing – up 22 per cent in 2012. But improved geo-targeting is allowing many national advertisers to turn to Google, Facebook and other large networks to buy ads that once might have gone to local news media. At the same time, Google and Facebook are also moving directly into local ad sales. Google is now the ad leader in search, display and mobile.”

Sponsored advertising: “Though it remains small in dollars, this ad category grew 39 per cent, to $1.56-billion; that followed a jump of 56 per cent in 2011. Promoted tweets on Twitter account for some of the growth, along with the rise of native ads–the digital term for advertorials containing advertiser-produced stories–which often run alongside a site’s own editorial content. This may come with some risk, though, as certain news outlets have found this type of advertising can cause confusion among readers who cannot differentiate between advertising and news content.”

Paywalls: “Some 450 of the nation’s 1,380 dailies have started or announced plans for some kind of paid content subscription or paywall plan, in many cases opting for the metered model that allows a certain level of free access before requiring users to pay. This is already helping rebalance the print industry’s heavy reliance on advertising over subscription revenue. Indeed, digital advertising for newspapers grew only at an anemic 3 per cent rate in 2012. At the New York Times, circulation now accounts for more than advertising revenue – attributed in large part to its two year-old digital subscription program. Small and mid-size papers, while not near an even split are seeing success as well.”

Friends and family: “Two-thirds of Americans at least somewhat often seek out a full news story after hearing about an event or issue from friends and family. Fully 72 per cent get most news from friends and family via word of mouth. But social media is a growing component: 15 per cent of U.S. adults get most of their news from friends and family through social media; that number rises to nearly a quarter of 18- to 29-year-olds.

Follow us on Twitter: @GlobeBusiness

In the know

Most popular videos »

Highlights

More from The Globe and Mail

Most popular