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Key Findings

Audience

For the third consecutive year, only digital and cable news saw audiences grow among the key sectors that deliver news.

In cable in 2009, those gains were largely captured by one network, Fox, though during the day, a breaking-news time, CNN also gained viewers.

What’s more, the data continue to suggest a clear pattern in how Americans gravitate for news: people are increasingly “on demand” consumers, seeking platforms where they can get the news they want when they want it from a variety of sources rather than have to come at appointed times and to one news organization.

Online, an analysis of the list of Nielsen Net Ratings list of 4,600 news and information sites saw the collected number of unique visitors grow 9.25%, according to a PEJ analysis. But on that list the top sites tend to dominate. Of the 4,600 sites, the top 7% collect 80% of the traffic. And the top 20 sites attract the majority of that. Legacy media still make up the majority of the most popular destinations, although each year newly created websites are joining the list. Of the news sites with a half million visitors a month (or the top 199 news sites once consulting, government and information data bases are removed), 67% are from legacy media, most of them (48%) newspapers. And most people graze though among a limited number of sites. A new Pew Internet-PEJ survey finds only 21% say they tend to rely primarily on one destination for news online; only a third even say they have a favorite website. But these online news grazers do not range far. Most people, 57%, range from using two –to five websites, and only 11% use more than six.

The gains to cable news generated in the election of 2008 proved more ephemeral for some than others. Over all, median prime-time viewership for the three main news channels grew 7% to 3.88 million, while daytime rose 16% to 2.16 million. But those overall numbers are deceptive. At night, when cable is dominated by ideological talk shows, Fox grew by nearly a quarter to an average of 2.13 million viewers at any given moment. MSNBC rose 3% to 786,000, while CNN fell 15% to 891,000 viewers. In daytime, CNN was up 9% over 2008 to an average of 621,000 viewers. But Fox daytime viewership grew again by almost a quarter, to roughly twice CNN’s audience (1.2 million viewers). MSNBC, relying on NBC news people more than talk show hosts, fell 8% to 325,000 viewers.

Network news audiences in 2009, by contrast, continued their long decline. For the evening news programs, the rate of erosion appears to be slowing. Viewership for the year fell 2.5% (or 565,000 viewers), but that is about half the number of viewers on average lost annually in the evening over the last two decades. (The NBC Evening News actually gained viewers in 2009, while ABC’s World News Tonight lost the most heavily.) Still, over all, 22.3 million viewers tune in to network evening newscasts each weeknight at the dinner hour. That is more than five times the number watching cable news at any given moment during prime time, when more TV sets are in use. In the morning, 12.8 million people watch network morning shows. That figure, however, is down 2.4% from 2008, and marks the fifth year of decline.

Source: Arbitron, Audit Bureau of Circulations, comScore Media Metrix, Nielsen Media Research. 1

Local television news is now seeing rapid audience declines beyond those in network, and those numbers appeared to accelerate in 2009. According to PEJ analysis of Nielsen data, viewership of the late news fell an average of 6.5% in 2009, four times the rate of a year earlier. Early evening news, at the dinner hour, fell 5.5% (similar to 2008). And early morning news, the programs that air prior to network morning shows that have been an island of relative stability for audiences, fell by 6.1% on average.

Newspapers saw print circulation losses accelerate in 2009. In the latest period, September, industry-wide circulation fell 10.6% from a year earlier. That comes on top of losses of 4.6% in 2008. The industry has lost 25.6% in daily circulation since 2000. Those declines, however, pale by comparison to the loss in revenues, which represent a more significant problem.

Audio audiences are more stable. Fully 236 million Americans listened to at least some radio in an average week in the fall of 2009, a number that has been basically static for the past five years, and news/talk/information remains among the most popular formats. NPR’s audience in 2009 rose slightly, up 0.1%, from 2008. But new technology is encroaching on the amount of traditional radio use. More than 4 –in 10 Americans now say they listen to less terrestrial radio due to iPod/MP3 use, and nearly 1in 3 now say they listen to online radio

The magazine industry is also hard hit. Of the 472 consumer magazines for which comparable data were available from the Audit Bureau of Circulations, circulation fell 2.23% for the last six months of 2009 compared with the same period a year earlier. But the type of circulation that cannot be controlled through promotional discounts — single-copy, or newsstand, sales — fell 9%, on top of 11% a year earlier. Six news magazines tracked here, excluding U.S. News & World Report after its conversion to monthly, fell 8.2%.

In ethnic media, the results were again mixed. The two major Hispanic television broadcasters saw audience growth. While some Spanish-language newspapers were flat, others fell and some smaller publications flourished. The black press also saw circulation numbers moving in various directions.

Economics

In 2009, the recession only intensified the financial crisis that technology has brought to the news business. Every commercial news media sector saw revenue declines except for cable. Ad revenues were particularly hard hit. If estimates by ZenithOptimedia prove accurate, total U.S. ad spending fell 12.9% for the year, the sharpest drop since the Great Depression, although most news sectors saw declines close to double that.

In newspapers, ad revenue (for print and online combined) fell 26%, a rate of decline that was more than 50% steeper than a year earlier (16%). Even online ads fell, 10%, a far cry from the 35% growth rates of a few years ago. Papers responded by raising circulation prices, figuring the core audience would remain. With those numbers added in, total revenue for newspapers fell about 22% to a total of $38 billion.

In audio, traditional broadcast radio experienced an 18% drop in ad revenue in 2009 compared to 2008. Internet and mobile radio revenues are growing (a projected 9.4%), but they do little to alleviate the pressure – counting for less than one fortieth of total. In satellite radio, SiriusXM in 2009 increased its revenue 3.7%, compared with a year earlier, to 2.5 billion compared to 2008. The company, however, both before and after the merger, has continued to report net losses in each of the last three years. In 2009 SiriusXM posted a net loss of $441 million.

In magazines, the number of ad pages sold across all titles studied fell by 26% in 2009, more than double the decline of a year earlier (12%). Almost every magazine suffered. Only 8% of the nearly 250 titles monitored saw an increase in ad pages. Among news magazines, the larger ones were hard hit. Time and Newsweek, for instance, saw ad pages fall 17% and 26% respectively. Niche news magazines examined tended to do better, though even here, the only one to gain ad pages was the Week, up 9.5%.

Source: Cable: SNL Kagan; Online: eMarketer; Network: TNS Media Intelligence; Audio: Radio Advertising Bureau; Magazines: Publishers Information Bureau; Newspapers: Newspaper Association of America; Local TV: Television Bureau of Advertising 2

In local television, after an unprecedented ad revenue downturn for an election-Olympics year in 2008, declines accelerated in 2009. Ad revenue fell 24% from the year before. Most analysts predict a better 2010, buoyed by economic recovery, a Supreme Court decision overturning limits on campaign spending and a midterm election year. But those numbers will be pressured still by continuing declines in audience numbers and a wider range of advertising options.

Cable remained the outlier in 2009. Overall revenues for the three major players rose an estimated 5% thanks to subscription fees and audience growth. Ad revenue was flat, up less than 1%, but profits rose 9%. The channels’ particulars are more revealing. Fox saw profits grow 19% to $535 million on revenue growth of 14% to $1.21 billion, according to data from SNL Kagan. CNN and its sibling HLN saw profits rise 1% to $476 million on revenues that were down 1% to $1.18 billion. At MSNBC, profits rose 1% to $150 million, on revenues that were similar, up less than 1% to $368 million.

Online, advertising during the year declined for the first time since 2002, according to data from eMarketer. The firm’s updated August projections called for online ad spending to fall 4.6% to $22.4 billion. But some categories fared better than others. Search, which flows mostly to aggregators like Google, was projected to grow to 3% in 2009 to $10.8 billion, and by the end of the year, nearly half (48%) of the total online ad market was expected to be in search. But display advertising revenue, which news sites rely on, was expected to fall 2% to $4.8 billion. Even here, news does not get the greatest portion of revenue. Aggregators and internet service providers take in 28%. Newspaper websites get 5%, and other news and current-event sites less than 3%. Television websites, which include both news and entertainment material, get 6%. Another key ad category for news online, classified, is eroding in the face of free classifieds from places like Craigslist. Classified revenue was projected to plummet 31% to $2.2 billion in 2009. Accounting for 17% of online ad spending in 2003, classified are now just 9%.

Network news economics are harder to divine, but PEJ estimates that the three news divisions saw revenue declines in 2009, probably in double digits. Network ad revenue fell 7% over all. NBC now derives more than half of its news revenues from cable, and its single most important financial contributor is its financial cable news channel CNBC. PEJ estimates that CBS News did not turn a profit, and ABC managed to do so with cutbacks in 2009 and again in early 2010.

Ethnic media had a difficult year, although not as bad as some other quarters. For the 12 months ending June 2009, ad revenue for Spanish-language media fell by 6.3%, to $5.5 billion, according to estimates by Nielsen Media Research. But some segments fared better than others, and better their mainstream counterparts. Spanish-language television ad revenue, for instance, fell by just 2%, according to Nielsen data, compared with 8.3% for all television. Advertising revenue for local Hispanic newspapers fell to $88.6 million, or 20.3%, not quite as much as newspapers over all. Ad revenue to national Hispanic magazines fell by 17.5% to $146.7 million. Other ethnic media also had some bright spots. Black television ad revenue, for instance, rose 6.7%.

Online Economic Survey

A new survey by PEJ and Pew Internet and American Life Project finds a tough market for building economics on the Web.

The findings suggest there is a difficult hill to climb in putting content behind a pay wall. Most people graze the Web for news rather than rely on primary sources. Only about a third (35%) can even identify a favorite news website. And of those that do, only 19%3 said they would continue to visit if that site put up a pay wall.

The prospects for growth in conventional display advertising also look difficult. The vast majority of Internet users, 79%, say they never or rarely had clicked on an online advertisement. They don’t mind them. They simply ignore them.

News Investment

Newspaper staffs continued to shrink in 2009. We estimate with colleague Rick Edmonds that by year’s end 5,900 more full-time newsroom jobs were lost, disproportionately at larger papers, on top of a similar number in 2008. Roughly a third of the newsroom jobs in American newspapers in 2001 are now gone, and those cuts come particularly in specialty beats like science and the arts, suburban government and statehouse coverage.

In network television, the roster of journalists also continues to shrink. ABC News instituted three sets of cuts in the past year, NBC reportedly two, and CBS announced a big round in early 2010. We estimate that network news staffs had already been cut by roughly half from their peak in the 1980s.

At news magazines, the cutting continued as the publications moved farther, although not entirely, toward opinion journalism. Time’s ranks fell 20% more in 2009. U.S. News & World Report, in converting to a monthly print periodical, reduced its news staff by 38%. Newsweek cut about 9%. But the numbers over time reveal more. Time’s staff of 147 is less than half of the 304 it listed in 2003. Newsweek’s 150 is 15% less than the 176 in 2003, and 57% less than the 348 it listed in 1983.

Again, only cable, thanks largely to its reliance on subscriptions for half of its revenue, could claim more overall investment in newsgathering in 2009 than the year before, though those aggregate numbers are not true across the board. Fox News Channel’s estimated investment in news was up 10% to $674 million. Fox, however, spends 72% of that on producing its host-driven programs, including multimillion-dollar salaries. Only 28% goes to administrative and overhead costs, which include staffing and bureaus. That number, $188 million, is less than half of what is spent by CNN and HLN. Those two channel’s overall news investment fell for the first time in years in 2009, down 2.5% to $703.4 million. MSNBC, whose newsgathering is mostly borrowed from sibling NBC, was expected to spend roughly the same amount on newsgathering in 2009 as a year earlier, $218 million.

In local TV news, PEJ estimated that about 450 jobs were lost at stations in 2009, on top of 1,200 jobs lost in 2008. Despite staff reductions, the average amount of news increased to 4.6 hours, from 4.1 hours the previous year. Researcher Robert Papper estimates that local TV newsroom staffing peaked in 2007.

In audio, news plays an unusual role. The number of stations identified by Arbitron as news/talk/information rose in 2009 to 1,583, up from 1,533 in 2008. This category is broadly defined and includes a large amount of talk programming. But all-news stations make up a much smaller category. In 2009, there were just 27 commerical stations around the country that listed themselves as all news, down from 31 the year before. And even here the label is self-defined and may include talk or other less news-oriented programs. In commercial radio, local all-news stations now tend to be limited to only the largest markets.

Ownership

Perhaps the biggest news in media ownership in 2009 was the pending sale by General Electric and Vivendi of NBC Universal to the cable company Comcast. The sale includes NBC’s broadcast network, cable channels and company-owned local TV stations. This was the largest media merger since the combination of AOL and Time Warner in 2000, a union that since has broken apart. The $37 billion NBC deal, which is subject to approval by the Federal Communications Commission and the Justice Department, may not be completed until 2011.

Few newspapers (14) changed hands in 2009, and those that did were in special circumstances, often bankruptcy. On the other hand, the notion that newspapers in large numbers were going out of business was not true. In all only a half-dozen ceased to exist or cut back on daily print publication in 2009, and most of those were among the few remaining second papers in their markets. A number of companies, due to debt obligations, went into some form of bankruptcy and some passed to private equity owners, but newspaper stocks were up from their rock bottom prices of 2008.

In magazines, 41 acquisitions were made in 2009, compared with 42 a year earlier, according to tracking by the Jordan, Edmiston Group. One of the higher-profile sales of the year was Bloomberg’s purchase of BusinessWeek from McGraw-Hill in a deal reported to include $5 million in cash and the assumption of $31.9 million in debt. In another significant acquisition, the Economist Group purchased Congressional Quarterly from the Times Publishing Co., the owner of the St. Petersburg Times. Times Publishing is owned by the Poynter Institute.

In local TV, the ownership landscape was also difficult and transactions limited. A few station owners sought bankruptcy protection and still others showed signs of trouble. Station sales transactions were up in 2009, both in number and dollar value, although most of that activity was the result of bankruptcy auctions or sales of distressed properties. According to one accounting, there were 76 station transactions in 2009, with a total value of $715 million. This compared with 46 in all of 2008 for a value of $537 million. Investors had trouble getting credit for acquisitions and station values were down throughout 2009.

  1. The cable figure is based on PEJ’s analysis of Nielsen Media Research data. It represents the combined median total day viewership (individuals 2 and older) of CNN, MSNBC and Fox News. The online figure is based on PEJ’s analysis of Nielsen Online figures from Nielsen’s NetView Tool. It represents average unique visitors to sites in Nielsen’s News and Information category from 2008 and 2009. The network figure is based on PEJ’s analysis of Nielsen Media Research data. It represents the mean evening news viewership (individuals 2 and older) of NBC, CBS and ABC. The local TV figure is based on PEJ’s analysis of Nielsen Media Research data. It represents the mean evening news viewership (individuals over the age of 2) for ABC, CBS, Fox and NBC affiliates. The magazine figure is based PEJ’s analysis of circulation data provided by the Audit Bureau of Circulations. It represents the average circulation for the six months ending December 31, 2009, compared to the same period of 2008, for six news magazines studied by PEJ: Time, Newsweek, The Economist, The Atlantic, The Week, and the New Yorker. The newspaper figure is based on circulation data provided by the Audit Bureau of Circulations. It represents average circulation for 400 U.S. newspapers during a six-month period ending September 30, 2009, compared to the same period a year earlier.
  2. Cable figures are based on estimated combined ad revenues for CNN/HLN, Fox News Channel and MSNBC for 2008 and 2009, provided by SNL Kagan, a division of SNL Financial LLC. Online figures are total online display ad revenues, from January to September 2009, compared with the same period in 2008, provided by eMarketer. Network figures are based on revenue estimates for network television ads from January to September 2009, compared with the same period in 2008, provided by the Television Bureau of Advertising. Radio figures are based on AM/FM advertising revenues from January 2009 to January 2010, compared with the same period in 2008-2009, provided by the Radio Advertising Bureau. Magazine figures are based on ad pages sold – not revenue – provided by the Publishers Information Bureau for six news magazines: Time, Newsweek, The Economist, The Atlantic, The Week, and The New Yorker. Newspaper estimates are derived by Rick Edmonds of the Poynter Institute based on data provided by the National Newspaper Association. Local TV figures are based on revenue estimates for local and national spot advertising on local TV from January to September 2009, compared with the same period in 2008, provided by the Television Bureau of Advertising.