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News Investment

News Investment

By the Project for Excellence in Journalism

How did online newsrooms fare in the deepening recession of 2008?

Getting a firm grasp on newsgathering resources online is elusive. There are so many sites, and accounting for the time devoted to online vs. in legacy platforms is difficult.

The Project hopes that a new survey of online journalists produced as part of this report in conjunction with the Online News Association will help.

Still, there are some data that offer at least a broad sense of how they are doing.
For those companies better known for aggregation, such as Yahoo, the year saw investments in technology more than people.  For those more closely tied with older media, such as the website of the Los Angeles Times (latimes.com), whatever gains they made in resources came from more tightly integrating digital and print operations than from expansion.

The biggest area of development was seen in a handful of niche publications that popped up online, some started by journalists laid off or bought out from traditional newsrooms.

Rarely if anywhere in the online world did gains in employment match gains in readership. Instead, the path of resources devoted to journalism online in 2008 was mostly a matter of trying to manage, or in some cases salvage, long-term strategy amid financial hardship.

Online Newsroom Staffing: Aggregators

Among the most visited sites are those that aggregate news from others, or rely heavily on wire copy that they may edit. In 2008, these sites reflected a preference for new technology over new hires.

Yahoo News, by some measures the most popular news site, uses human editors to make its aggregation decisions and it also has tried in fits and starts to do some limited original reporting.

In 2008, it did not add to its staff, either editors or reporters.  “Over all, the corporate situation is obviously tough, though we’re holding pretty steady investment,” Yahoo News senior product manager Peter Roybal said.1

Part of that investment in 2008 was not in original reporting but in doing original things with content it aggregated: editing or combining content to produce new information for its audience. Much of this work was tied to the presidential election.

The site hosted a virtual debate among Democratic candidates for president, gathering tapes from interviews conducted by Charlie Rose and Bill Maher and inviting users to select the issues and candidates they wanted to hear from. It was called the Democratic Candidate Mashup. On the Republican side, it partnered with Politico to conduct a virtual interview with President Bush and permitted Yahoo users to submit questions. Yahoo also introduced a news blog of material aggregated by Yahoo editors.

Yahoo News also redesigned its site to take advantage in surging interest in political news. “We are in the midst of a very powerful news cycle,” said Scott Moore, Yahoo’s senior vice president and head of U.S. audience. “There is a real sea change going on here.”2

AOL News, another aggregator, also sought to take advantage of the election with technological wizardry rather than shoe-leather reporting. It created a “widget” called the “Hot Seat” that users could add to their own websites. The Hot Seat featured content from bloggers and other sites to “stimulate a dialogue between voters, pundits and politicians” (see Special Report on Citizen Media).

MSNBC.com, by some measures now Yahoo’s rival as a news destination, also leaned on technology over people. The site, a partnership between the cable network of the same name and Microsoft, represents something of a hybrid of aggregation, wire editing and original reporting (see the Online Audience Section). More than 200 people work there, including editors, reporters and producers. It is headquartered in Redmond, Wash., on the Microsoft campus, and has newsrooms in New York, London and Redmond.

The lion’s share of these people are editors managing or in some cases combining wire copy and producers assembling pages and content. Relatively few of MSNBC’s staff are engaged in actual reporting.

Here, too, in 2008, the newsroom innovations were largely technological rather than reportorial. MSNBC.com added new NewsWare tools to permit users to download news-focused screen savers and video games. One tool, called NewsScroller, gives users their own custom news ticker to display headlines updated throughout the day.

“We’ve coined a phrase, ‘news infusion,’ to capture the essence of what MSNBC.com is accomplishing with NewsWare,” said Catherine Captain, vice president for marketing at MSNBC.com, was quoted as saying in a company statement3 (see the Cable Digital Trends Section).

Digital tools present inexpensive opportunities for news organizations to boost audiences. Certain Web tools, like comments, RSS feeds and most-popular rankings can draw in readers and keep them engaged. Likewise, supplying user-generated “reporting” tools can give users more of a reason to come back to news sites with video and written posts of their own.

The biggest online investment of the year came in the network’s coverage of the 2008 Summer Olympics. As sole U.S. carrier of the games, NBC worked to take full advantage of the capabilities of the Internet. This included the creation of a microsite, www.NBCOlympics.com, which provided over 2,000 hours of streaming video of events, highlights and replays.4 Viewers could, for example, visit the cycling area of the site to grab the latest news updates and watch videos.5

Record numbers of viewers visited its coverage online. At an average of 4.3 million unique visitors a day, NBC pulled in more than double the traffic of the 2006 Winter Olympics and 2004 Summer Olympics combined.6

NBC also used the website to test a comprehensive way of tracking viewership across television, online and mobile platforms. Networks have long had to piece together television audience numbers and online and mobile consumption with no overarching strategy for measuring how individuals divide their time. NBC used the Olympics website to test its Total Audience Measurement Index, or TAMi, which summarized users’ viewership across television channels, websites, mobile programming and video-on-demand.7

Online Newsroom Staffing: Legacy Operations

Data on the number of people employed online at legacy newsgatherers, those attached to print or television operations, are in short supply. Those trying to do such accounting, such as the American Society of Newspaper Editors, have found it difficult to sort out who is an online journalist and who is not. And trying to do so is becoming increasingly difficult, or perhaps even irrelevant, because of a continuing integration of online and offline staffs. But evidence suggests a shift of balance in favor of merged digital newsrooms even as overall payrolls were trimmed.

“Online wasn’t immune to cuts, but online was cut less in general than core newsrooms and core news operations,” Tom Davidson, the vice president for content at Tribune Interactive, told PEJ in an interview in October, before the company’s situation worsened and it filed for reorganization under bankruptcy protection.  “You feed resources to the growing part of your business and you cut resources to those aren’t growing anymore. Online tended to fare better.” 8

Some publications from larger organizations attempted create economic efficiency by merging online operations. In October, Condé Nast merged the online functions of two of its magazines, Portfolio and Wired, resulting in job losses in Portfolio’s digital operations.9 Similarly, Hearst Digital laid off workers as it merged its online and offline divisions.10

Mansueto Ventures, the publisher of Fast Company and Inc., took even more drastic action in early October. It shut down both digital divisions entirely, laying off 20 employees.11 Their duties were absorbed by print magazine reporters and the websites continued.12

Elsewhere, there were signs of cutbacks. The Los Angeles Times website, for instance, lost some digital staff in 2008, but benefited from the increasing cooperation from print staffers who are reporting, editing and publishing for the website. “For us, the short answer is that investment is up, even though our Web budget is flat from a year ago,” latimes.com executive editor Meredith Artley said.

In the case of latimes.com, the focus on the digital product paid off for the newspaper. In 2008, website revenues were nearly enough to cover the entire newspaper’s reporting payroll, Artley said.13 Despite that encouraging development, the future of the Times became even less certain when its owner, the Tribune Media Company, filed for bankruptcy protection in December.   

One of the clearest trends in newspaper newsrooms was the integration of the print and online operations. The integration came in two ways — bringing print and digital staffs together under one roof and training print staff to perform tasks involved in publishing to Web.

Integrating newsrooms not only saved money, but it also recognized a need to more efficiently produce content for a variety of platforms. “All newspaper websites are going through this right now. Maybe there is no magic recipe, but constant overcommunication is a huge key to success,” Artley of latimes.com, said.

Both national news organization and midtier newspapers embraced integration in 2008. The Washington Post, following the lead of the New York Times and the Los Angeles Times, brought online and offline staff operationally closer together. The ultimate goal is a more efficient way of publishing information in a variety of different digital formats.

A focus on integration is not limited to the big national news organizations. A 2007 PEJ-sponsored survey of newspaper editors found that the vast majority of newspaper editors (81%) consider the print newspaper and their Websites “part of the same product” rather than “different entities.”14

Percent of Newspapers Integrating Web and Print Operations, 2008
Percent of editors operating web and print as an “integrated editorial product”
Design Your Own Chart

Source: PEJ survey of newspaper editors, 2008

For the first time, a majority of newly hired journalists reported job duties that involved reporting for the Web, according to a 2007-2008 survey of journalism and mass communication graduates.15 Over 55% of bachelor’s degree recipients with jobs in communications reported that their jobs involved writing and editing for the Web. The figure had been 41.5% a year earlier and 22.6% as recently as 2004.

Percent of Journalism School Graduates in Web-Related Journalism Jobs
2004-2007
Design Your Own Chart

Source: The Cox Center at the University of Georgia, Annual Survey of Journalism & Mass Communication Graduates

Such integration was less true in television. There union rules can be an impediment, forbidding people from doing technical tasks. Culture may be a factor, too. But the notion that everyone is working across platforms has not developed in the same way in television.

Ending Print Editions

The year also marked the point when a few publications took the more highly anticipated step of cutting back on or entirely halting their legacy productions in favor of going online, from the Christian Science Monitor (which is shifting from a daily printed newspaper to one online plus a printed weekend magazine) among newspapers to U.S. News & World Report (which is shifting from weekly to monthly publication) in magazines. The key factor here is how much advertising revenue the print edition is earning. If print is not producing sufficient revenue, it may make more sense to grab the cost savings of eliminating print production.

Other newspapers also downsized their print operations to fewer days a week to save money on printing and distribution on low-revenue days. For example, Detroit’s major newspapers, too, cut home delivery to three days a week and beefed up their websites (see the discussion in the Newspapers Chapter).

And in television, particularly national outlets, one other trend appeared to continue in 2008: using citizens to supply video. In 2008 CNN, as part of an effort to integrate user-generated content both online and on-air, relaunched the beta version of its iReport program. First attempted in 2006, iReport was primarily a way to gather news for CNN.com and the cable channel. Users flooded the site with almost 10 times the content that CNN could use, and CNN suspended it in 2007 (see Citizen Media and Cable Digital Trends).

The new incarnation, iReport.com, more closely resembles YouTube. It is a website that allows users to share video, audio and photos with little interference from editors. The site sports the look, feel and openness of YouTube, as it exists as its own community. The only vetting CNN does is to remove objectionable content.16 Some of the content could appear on the news channel and website.

“The community will decide what the news is,” said Susan Grant, executive vice president of CNN News Services. “We are not going to discourage or encourage anything… iReport will be completely unvetted” 17 ( see Special Report on Citizen Media).

Other news organizations feature their own citizen-produced content sites. MSNBC’s FirstPerson invites users to upload video, photos or first-hand reports from breaking news events. The site has a button that says: “Are you on the scene? Send us your video.”

ABC has a version called i-CAUGHT,” whose focus is less on breaking news and more about sharing personal content. Users can post videos in multiple categories, including politics, weather,” entertainment, fun and animals.

Legacy Sites Adopt Aggregation

Another trend, noted last year, accelerated in 2008: Newsgathering organizations continued to move toward aggregation and devoted more resources to organizing it for its audience.  In many cases this means including content from competing news organizations.18

Among the most visible examples of the trend was its adoption by NYTimes.com, the most widely read newspaper website. The site, which formerly limited itself almost entirely to stories generated by its namesake newspaper, announced in December 2008 a feature called Times Extra that steers readers to stories on the same topic appearing on competing websites.19 ” We would be remiss as a news organization if we didn’t develop this,” said Marc Frons, chief technology officer for digital operations at the newspaper. “People are coming to our website because they want to know what the Times thinks is newsworthy on any given day.”

Newspaper websites around the world have long included links to other news sites on their own home pages, but the Times is the first to feature them so prominently. ”The Internet offers so much stuff, that newspapers have in a sense been marginalized,” said newspaper analyst Ken Doctor. “If readers come to you to get a sense of that wider world, you’ll do better than by only pointing them to your own content.” 20

Online Newsroom Staffing: Niche Publications

Some of the biggest expansions of news investment occurred at niche publications focused on specific topics.

Politico, a newspaper that was created with both online and print in mind, announced in September of 2008 the hiring of more than 100 people as it expanded its White House and congressional coverage.21

“Our goal is simple,” said Politico publisher Robert Allbritton in a statement. “We want to offer readers the fastest, smartest, most authoritative coverage of Washington in the nation, period.”

The publication itself was only a month shy of 2 years old at the end of the year. Politico’s plans are not limited to delivering news on its Web site and in a print edition circulated around Washington. It also has plans to become a regular source of content for daily newspapers around the country. The news outlet covered the 2008 political conventions through a content-sharing arrangement with newspapers in St. Paul, Minnesota, and Denver, Colorado, where the conventions were held.

Another politically focused website,  HuffingtonPost.com, enjoyed strong traffic growth due to the election and was able to secure an additional $25 million from venture capital firm Oak Investment Partners to invest in its operation. How much of that will go to reporting is unclear.

A statement from HuffingtonPost.com said it would “invest in its technology and infrastructure, increase its in-house advertising capabilities, and continue to expand its content offerings — including a new investigative journalism initiative and a rollout of local versions of The HuffingtonPost in select cities.” 22 What it has in mind, according to sources who have talked with HuffingtonPost, still appears to be relying heavily on citizen volunteers for content, under the supervision of news professionals.

But the investors behind this still appear to believe that advertising will be the revenue source for the future of news. Fred Harman, general partner at Oak Investment Partners, said, “Much of the news media business needs to be reassembled online around an ad-supported model and the timetable for this has been accelerated, not slowed, by this economic down cycle.”23

AP Goes Mobile

The Associated Press, the news cooperative founded by newspapers in the 19th century, made a major move towards a digital – and mobile – future.
The news service rolled out in May its mobile news network. It is the first product released by the AP’s Digital Cooperative, an initiative aimed at finding new digital outlets for news and information produced by AP members.

Using software developed by Verve Wireless, the network delivers news directly to smartphones, for now available on the two most popular, the iPhone and the BlackBerry.24

The AP merges its content with that from a consortium of local news organizations so cellphone users can receive international, national and local news content

As of early 2009 the content focused primarily on hard national and local news. The next offerings on tap for the network are locally focused:  movie reviews, listings and restaurant guides that the AP hopes will eventually form a coherent news and local resource hub for users.

Ultimately, Jeff Litvack, the AP’s global product development director, sees its value in local information. “It’s truly our belief that people are looking to get their hometown news alongside their sports scores,” he said.25

The mobile news network has so far been well received by both the public and news organizations that see partnerships as way to keep themselves alive in the future. In August, the first full month of service, it received more than 16 million page views. By September, the service had 948 news organizations signed up to provide content.26 In November, the service had 35 million page views, according to Arthur Howe, the CEO of Verve Wireless. Verve provides the technical expertise to actually move electronic content online to the mobile web.27

The AP will not publicly confirm the project’s cost, but Litvack told MediaPost in July that the company invested millions to get the project up and running.28

As of early 2009, revenues remained extremely small, though some partners have high hopes for the future. “Collectively,” said Howe, “our content and brands work better together.” Still, he says, mobile news and advertising is not going to be enough to save the industry as the struggle to monetize online news continues.29

Part of the impetus for new projects at the AP stems from its struggles with news organizations that are members of the AP, a battle that led some of them to threaten to abandon the syndicate in 2008. Newspapers, in particular, complained about the costs of the service30 (see discussion in Newspapers Chapter).

Footnotes

1. Peter Roybal interview with PEJ, Dec. 5, 2008.

2. Mike Shields, “Post-partisan reflection: surging pol sites looking beyond historic election year,” Media Week, Oct. 20, 2008

3. “MSNBC.com Launches NewsWare, Its Lab for News-Infused Digital Tools,” MSNBC.com press release, PrimeNewswire, May 5, 2008

4. Mike Shields, “NBC’s Victory Lap,” Media Week, August 25, 2008

5. Brian Stelter, “Web Audience for Games Soars for NBC and Yahoo,” August 25, 2008

6. Brian Stelter, “Web Audience for Games Soars for NBC and Yahoo,” August 25, 2008

7. Richard Sandomir, “Tracking the Olympics Audience Across the NBC Media Universe,” New York Times, July 7, 2008

8. Interview with Tom Davidson, October 24, 2008

9. Erik Sass, “Caught In Web: Magazines Cut Digital Staffs,” Media Post, November 12, 2008

10. “Publishing Mix and Match,” New Media Age, October 2, 2008

11. James Erik Abels, “Slowing Fast Company?” October 23, 2008

12. Erik Sass, “Caught In Web: Magazines Cut Digital Staffs,” Media Post, November 12, 2008

13. Interview with Meredith Artley, October 27, 2008

14. “The Changing Newspaper Newsroom,” The Pew Research Center’s Project for Excellence in Journalism, March 2008

15. Annual Survey of Journalism & Mass Communication Graduates, Grady College of Journalism & Mass Communication, University of Georgia, November 2008

16. Mike Shields, “CNN Launches iReport.com,” Editor & Publisher, February 13, 2008

17. Mike Shields, “CNN Launches iReport.com,” Editor & Publisher, February 13, 2008

18. PEJ Interview with Anthony Moor, November 18, 2008

19. Grant Surridge ,  “New York Times takes bold steps with its web coverage,” Financial Post, Sunday, December 7, 2008

20. Grant Surridge, “Tackling the Loyalty Paradox,” December 8, 2008

21. Joe Strupp, “ ‘Politico’ Announces More Staff, Circulation, and Coverage,” Editor & Publisher, September 22, 2008

22. “25 mi. infusion for HuffPo,” Adweek.com, Dec. 1, 2008

23. “25 mi. infusion for HuffPo,” Adweek.com, Dec. 1, 2008

24. Tanya Irwin, “AP Launches Mobile News Network App For BlackBerry,” Media Post’s Online Media Daily, October 21, 2008

25. Steve Smith, “Building A Mobile News Network,” Mobile Insider, July 10, 2008

26. “AP Mobile News Network Reaches 16 Million Page Views in First Full Month,” Business Wire, September 18, 2008

27. “Who Will Pay for the News?” Poynter Institute Conference, St. Petersburg, Fla., November 10-11, 2008

28. Steve Smith, “Building a Mobile News Network,” Media Post’s Mobile Insider, July 10, 2008

29. “Who Will Pay for the News?” Poynter Institute Conference, St. Petersburg, Fla., November 10-11, 2008

30. Steve Boris, “Ohio Newspapers Try to Break Away from the AP Cartel,” thefutureofnews.com, May 2, 2008