In its third annual state of the industry study, the Project for Excellence in Journalism found that paradoxically, although there are many more news outlets for readers, viewers and listeners than ever — including newspapers, magazines, television broadcast and cable channels, radio, podcasts, online and blogs — they are covering fewer stories, and covering them less well.
"It's the illusion of information," Tom Rosenstiel, project director, told BusinessWeek , "but it's actually a lot of repetition."
Starkly put, rather than creating broader and more in-depth news reporting, the plethora of new and old media is resulting in less not more real news coverage. As the points of news delivery proliferate, "the audience for each tends to shrink and the number of journalists in each organization is reduced."
According to the study, news industry problems are endemic and they run deep. In fact, the situation may be nearing a crisis point. As the report begins, referring to 2005, "Will we recall this as the year when journalism in print began to die?"
During the year, The New York Times cut nearly 60 people from its newsroom, the Los Angeles Times 85, and the San Jose Mercury News cut 16%, the Philadelphia Inquirer 15% — and that after a 15% reduction only five years earlier.
In November, one of the most cost-conscious newspaper chains of all, Knight Ridder, went on sale. In a dire sign for the industry, most major newspaper companies passed on the auction completely. It did sell, however, early this week to the McClatchy Company, a publisher half its size, for a reported $4.5 billion. As one analysts noted, "It was like a dolphin swallowing a small whale."
The report continued, "Even if newspapers are not dying, they and other old media are constricting, and so, it appears, is the amount of resources dedicated to original newsgathering."
Old media is under pressure from the new. Both ad revenue and readership are falling as news consumers migrate to alternate sources — yet those new sources seldom have the expertise or resources to fund effective, original newsgathering and journalism organizations. The Times wasn't built in a day, and neither were Hearst, CNN or the BBC.
Obviously, like it or not, good journalism is dependent on money. But how long will it take for online media to become a major economic engine, and will it ever be as big as print or television? As the report surmises: "If the online revenues at newspapers continue to grow at the current rate — an improbable 33% a year — they won't reach levels equivalent with print until 2017 (assuming print grows just 3% a year). Realistically, even with the lower delivery costs online, it will be years before the Internet rivals old media economics, if it ever does."
To balance this bad news somewhat, some good news for newspapers was just released by the Newspaper Association of America (NAA). Their figures showed that, for the seventh consecutive quarter, online newspaper advertising revenue increased in the fourth quarter of 2005, rising to $552 million, 32.5% above the level recorded in the fourth quarter of 2004.
"Despite a challenging year for advertising overall, ad spending on newspaper Websites was extremely strong, and newspapers enter 2006 aggressively taking steps to build audience across online and offline platforms," said NAA CEO John Sturm. "Not only have newspaper Websites captured a large and growing audience, but these ad spending estimates for 2005 demonstrate that newspapers are successfully monetizing the value of their Internet investments, leveraging online advertising opportunities and building consumer loyalties on the Web."
However, the key question remains whether an improving revenue picture will result in broader, deeper news coverage?