TEN INTERNET YEARS
As the Internet Grows Up, the News Industry Is Forever Changed
Monday, June 19, 2006; 12:00 AM
The news industry, congenitally nervous about its future, looks at the Web this spring and sees cause for panic.
Advertisers are rushing to the Internet. Readers, even of the best newspapers and magazines, are abandoning print, while network television news shows have been losing viewers faster than you can say "CNN, MSNBC or Fox?" Wall Street money managers, fed up with slowing growth of what are still immensely profitable news companies, just forced the second-largest newspaper chain in the land to sell itself off. The American Journalism Review's current cover story is headlined "Adapt or Die."
Some news organizations surely will die as the Internet disrupts and remakes the century-plus-old newspaper and half-century-old television industries. But overlooked in this massive transformation are some underlying insights that should give pause to those who would put a gravestone on the mainstream media.
News consumption has fractured and fragmented in the United States over the past 30 years, but the demand for news is strong. Network morning, evening and news magazine shows, cable news and public broadcasting audiences, combined with the explosion of growth in the digital media, are bathing consumers in more news and information than ever before.
While it's true that fewer newspapers roll off the presses than a generation ago, that only half as many people watch the nightly network news as did 25 years ago, and that news magazines do not carry the authority of the past, new sources of news abound. The Internet has largely replaced the immediacy of radio and television for breaking news. Blogs of every conceivable perspective offer free opinions and arm-chair analysis. Community listservs supplement neighborhood newsletters. Videologs and RSS feeds target specific interests. Talk radio, despite its all-too-common bombast and vitriol, fulfills a demand to discuss issues that affect a community -- one of the most basic definitions of news.
Readers are mixing and matching and have far more choices in how they get their news than ever before. Whether more people are consuming more news is not yet known because industry research organizations are only beginning to study the question.
Mainstream news organizations, shaken by the erosion of their viewers, readers and advertisers, and only hesitantly embracing the new media, still have significant strengths in the digital journalism world. Though their economic situation is serious, and perhaps critical, it's not over yet. What is over is the era of the well-staffed, single-medium newsroom with once-a-day or even once- an-hour deadlines.
First, The Bad News
That's a hard conclusion for many in the news business to handle. Newspapers, the biggest and oldest segment of the mainstream media, are built on the work of creative, contentious and quick-witted people, but also of curmudgeons who resist change.
Newsrooms shrunk by layoffs and battered by bloggers, are seeing their traditional audiences shrink. Daily newspapers lost 1.2 million readers in the six months that ended in March, down to 45.5 million. Online newspaper readership grew to 56 million.
Television, a newer medium built on newer technology, has its own blind spots. In 1980, when CNN started its 24-hour news operation, few in network television expected it to last. Few people had cable, and little evidence existed that anyone wanted more news than was already available nightly for free. But while the network nightly news audience has dropped from 53 million to 27 million in the past 25 years, overall viewership of cable news grew to about 160 million.
Why should the entrenched media change? The introduction of radio, network television and cable did not destroy the news franchise, so why should the Internet? Despite declining circulation, newspapers are still among the most profitable corporations in America, with an average profit last year of 21 percent, Merrill Lynch analyst Lauren Rich Fine noted recently, almost twice what the average Fortune 500 corporation earns.
But those profits are dropping and may hit the 14 percent range within five years, Fine predicts. Profits at the 13 publicly traded newspaper companies fell an average of 20 percent in 2005, another industry survey reports.