What is the Future of Journalism?
Almost a decade ago, the average North American newspaper made the lion’s share of its profit through print circulation and advertisement. This profit plan quickly changed in the past few years as accessing timely, organized and flashy news content became as easy as scrolling through a free smart phone application. As a result of these rapid changes, newspapers in North America today, of varying scopes and circulations are scrambling to maintain their profit in the digital era through charging online subscriptions for their digital media content, through advertisements in both their print and online media, and through seeking non-traditional newspaper revenue, such as hosting events, consulting with businesses, or selling business products.
The demise of print media has been expected and fearfully monitored in the past few years, with recent statistics demonstrating that there are currently 1,350 English-language daily newspapers in the U.S., compared to 1,400 in 2007.
A recent study that was completed by the Pew Research Center's Project for Excellence in Journalism examined the revenue models that 38 American newspapers have adopted in order to adjust their profit to the changes that the digital era has introduced. As executives in the newspaper industry begin to adjust their strategies and fund allocations more to digital newspaper subscriptions and online advertisement revenue, they will begin to experience a steady but slow growth in their revenue in the coming few years. However, this will not resuscitate the newspaper industry’s profit back to what it was 20 or 30 years ago.
As content media shifts to digital media, and as acquiring information becomes easier due to advancing technologies and the wide spread use of social media, readers will have an incredibly large variety of sources that would provide news, updates and discussions in whichever mediums they prefer, and which are not necessarily established newspapers.
Further solidifying the argument that newspapers will likely never reign as they did a decade ago is the profound power of the citizen journalist which was discovered around this time last year during the mass uprisings in the Middle East and in North Africa, where citizens were just as effective and timely at delivering news as the average newspaper. The importance of a citizen journalist was undeniable when viewers around the world noticed that strict government-issued media bans failed to suppress the waves of photos, videos and blog entries of citizens that were providing firsthand account of their experiences.
A fact that was placed forth in the results of the study produced by the Pew is that most newspapers are very reluctant to make drastic changes to their revenue strategies due to what they define as “cultural inertia.” As several senior executives of newspapers explained, they are reluctant to make any drastic changes or innovations to their newspaper because they are afraid it would worsen the profit decline. This is now expressed as the big dilemma for the surviving newspapers; they either take the risk of changing the way that the newspaper runs only to meet the expected decline faster or meet unlikely success.
Statistics show that advertisement revenue for American newspapers declined 48% from 2006 to 2010. The decline in print advertisement revenue held an inverse relationship with web advertising revenue in the U.S. which has surpassed print advertising revenue consistently since 2005, reaching $26 billion in 2010, and $32 billion in 2011. Digital Research firm eMarketer has released statistics which foreshadow that online advertisement spending will increase exponentially in the coming years by about $7 billion dollars a year.
Another source of profit that American newspapers have recently initiated is that of digital subscription. An increase in digital subscriptions to participating newspapers including the the New York Times, the Financial Times, and the Wall Street Journal has provided newspapers another profit plan.
Despite growth in online advertisement, one of the main statistical findings of the recent study by the Pew Research Center demonstrates that the newspapers that took part in this survey received about $11 in print revenue for every $1 that they attracted online in the last year. However, compared to the 9% decline in print advertising for newspapers, the ratio demonstrates that for every $1 gain in digital revenue, there is a $7 loss in print revenue.
Predicting how the newspaper industry will survive the digital era remains a difficult talk, since the move to digital content and the rapid expansion of social media have only been experienced for a few years. As the recent study conducted by Pew discussed, it is important for newspapers to begin undertaking initiatives from the ground-up to overhaul their revenue plan in accordance with the recent popularity of digital media.
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