Five myths about the future of journalism

4. Newspapers around the world are on the decline.

Actually, print circulation worldwide was up more than 5 percent in the past five years, and the number of newspapers is growing. In general, print media are thriving in the developing world and suffering in rich nations. Print newspaper ad revenue, for instance, rose by 13 percent in India and by 10 percentin Egypt and Lebanon in the last year for which data is available. But it fell by 8 percent in France and 20 percent in Japan.

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The forces tied to a thriving print newspaper industry include growing literacy, expanding population, economic development and low broadband penetration. In India, for example, the population is growing and becoming more literate, but a substantial portion is not yet online.

By and large, American newspapers are suffering the most. Roughly 75 percent of their revenue comes from advertising, vs. 30 percent or 40 percent in many other countries, where papers live and die by circulation. That means the collapse of advertising is not hitting papers elsewhere as hard as it is hitting them here. It also suggests that the need to charge for online access may be even more important abroad.

5. The solution is to focus on local news.

Going “hyperlocal” was the war cry of Wall Street to the news industry five years ago. The reasoning was simple: In the Internet age, when users can access content from anywhere, it didn’t make sense for local operations to compete with the big national news providers.

The problem is that hyperlocal content, by definition, has limited appeal. To amass an audience large enough to generate significant ad revenue, you have to produce a large volume of content from different places, and that is expensive. On top of that, many hyperlocal advertisers are not yet online, limiting the ad dollars.

Now we are entering what might be called Hyperlocal 2.0, and the market is still up for grabs. Google, which garners two-thirds of all search advertising dollars nationally, doesn’t exert similar control over local advertising. Locally, display ads — all those banners and pop-ups — are a bigger share of the market than search ads.

But how to produce local content remains a mystery. Can you put paywalls around it? Can you build a “pro-am” model, in which professional journalists work with low-paid amateurs to produce a comprehensive report? Or will the winner be something like AOL’s Patch, in which hundreds of hyperlocal sites are owned by a single company that can connect those readers with major advertisers?

So far, no one has really cracked the code for producing profitable local news online.

Tom Rosenstiel is director of the Pew Research Center’s Project for Excellence in Journalism. He is the co-author, with Bill Kovach, of “Blur: How to Know What’s True in the Age of Information Overload.”

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