People are spending more time with news than ever before, according to Pew Research Center survey data, but when it comes to the platform of choice, the web is gaining ground rapidly while other sectors are losing. In 2010, digital was the only media sector seeing audience growth. And cable news joined the ranks of older media suffering audience decline.
Source: Nielsen Media Research, Pew Research Center for the People & the Press, Audit Bureau of Circulations. 1
Digital: In December 2010, 41% of Americans cited the internet as the place where they got “most of their news about national and international issues,” up 17% from a year earlier. When it came to any kind of news, 46% of people now say they get news online at least three times a week, surpassing newspapers (40%) for the first time. Only local TV news is a more popular platform in America now (50%). The new wild card in digital is mobile. A new survey released as part of the State of the News Media find finds that 47% of Americans now say they get some kind of local news on mobile devices such as cellphones or other wireless devices (such as iPads). As of January 2011, just 7% of Americans owned electronic tablets, according to our new survey, but that is nearly double from four months prior; and 6% of American adults have e-readers.
Cable News: That activity may explain one other change in the sociology of news consumption in 2010. The audience for cable news in the last year declined substantially. In aggregate, the median viewership fell 13.7% across the entire day in 2010. Prime-time median viewership fell even more, 16% to an average of 3.2 million, according to PEJ’s analysis of Nielsen Market Research data. Daytime fell 12%.
And for the first time in the dozen years we’ve monitored this segment, every channel was losing. CNN suffered most. Its median prime-time viewership fell 37% to 564,000 viewers, and MSNBC beat it in total viewers during prime time for the first time. But Fox fell, too, 11%, and MSNBC declined 5%.
Network News: If the losses were new to cable, they were not for network broadcast news. Audiences for almost every network news program fell again in 2010. Evening news audiences fell by 752,000 viewers, or 3.4%, from 2009 and have been on a downward trend for three decades. Network evening news is, however, still an extraordinarily powerful source of information in America. Some 21.6 million people on average watched one of the three programs each night. That is roughly four times the combined number watching each cable news channel’s highest-rated program. In the morning, an average of 12.4 million people tuned in each day over the year, 3% fewer than in 2009. That is the sixth consecutive year of losses. The PBS NewsHour averaged 1.1 million viewers nightly during the 2009-10 season, basically unchanged from the year before.
Newspapers: Print circulation also continued to decline in 2010. Weekday circulation fell 5% and Sunday fell 4.5% year-to-year for the six-month period ending September 30. There is some good news in those numbers, however. The losses in 2009 were double that. Online audience, though imprecisely measured, did grow some, and many papers can claim their overall audience is bigger than ever, but the data suggest that it did not fully compensate for print losses industrywide. One survey, by the Pew Research Center for the People & the Press, finds the total audience that reads newspapers, in print and online, at least three times a week dropped by six percentage points over the last two years. By this count, 40% of Americans report reading a newspaper in any form, down from 46% in 2008 and 52% in 2006. The number of those who reported reading “yesterday” print and online now sits at 37%, down two percentage points from 2008.
Magazines: Circulation for the six news magazines in our report fell 8.9%. By far the largest portion of that, subscriptions, fell 8.6%, but that number is controlled, based on how much magazines want to spend to “buy” readers. Newsstand sales, which is a smaller component, dropped 17.7%. Circulation for the magazine industry as a whole dropped 1.5%.
Audio: Of all the traditional media, the audience for AM/FM radio has remained among the most stable. In all, 93% of Americans listened to AM/FM radio at some point during the week in 2010, according to data from Arbitron, and this has dropped only three percentage points in the last decade. News may have suffered more. According to the Pew Research Center for the People and the Press, 16% of Americans say they get most of their national and international news from radio, down 6% from 2009. And 34% of Americans said they got some news on the radio “yesterday,” down from 43% in 2000. NPR, by contrast, has flourished as commercial all-news radio programming has become scarcer. NPR’s audience grew 3% in 2010, according to NPR internal data, to 27.2 million a week. That is up 58% since 2000.
But the biggest change in radio listening may be just ahead. A good deal of radio listening occurs in cars, and we are on the brink of internet radio being widely available there for the first time. Toyota is including Pandora in its multimedia system in all new models in mid-2011. Pandora also signed a deal with Pioneer that would put its online radio service in at least six other car manufacturers by the end of 2011. People may be ready. More than quarter of Americans (27%) said they were “very interested” in online radio in the car in 2010; this is up 17 percentage points from 2009.
Local TV News: The one traditional media platform that possibly could claim some good news on audience was local TV. At network affiliates, viewership continued to decline in all the traditional time slots (i.e. 5-7AM, 5-7PM, 11-11:30PM), across all sweeps periods, this year an average of 1.5%. Fox affiliate newscasts lost viewers in both their basic timeslots – local morning newscasts lost 1% and prime-time news lost 4.9%. But stations of all types added audience at the new early timeslot of 4:30 a.m.; stations in 69 cities had news that early, up from 28 a year earlier. And 7 p.m. audiences, where some stations are adding news, are also growing. Finally, there is some evidence that viewership gains at independent stations offering news may now compensate for the loss of audience at network affiliates, meaning that the overall audience for local news, because of more news being available, has roughly held steady.
Every sector of the news media we study saw revenues grow above the levels of a dismal 2009 except for one: Newspaper revenues fell again, a sign that its structural problems of the print newspaper are more severe than any other media sector.
Source: SNL Kagan, eMarketer, Kantar Media, Radio Advertising Bureau, Publishers Information Bureau, National Newspaper Association, BIA/Kelsey.2
Newspapers We estimate that advertising revenues at newspaper organizations fell by 6.4% in 2010 from the year before. That compares to a drop of 26% in 2009. We estimate print newspaper ad revenue at $22.8 billion, with roughly $3 billion more for online. (After our report was published, the Newspaper Association of America released its final tally and put the drop at 6.3%.) Going back, that means newspaper ad revenue is down 48% in four years. Circulation revenue, though the final estimates are not yet calculated, is expected to be flat or down marginally, after falling 10% from 2003 to 2009. Contrary to what those who have already written print’s obituary may think, newspapers generally are still operating in the black. Typical profit margins hovered around 5%, according to our analysis. That is less than a quarter of what they were in the 1990s. With revenues declining, it means that newspapers are surviving largely by managing costs. Though difficult to measure, our analysis suggests that about half the fall-off in ad revenue now is due to declines in the size of the print audience delivered to advertisers. Not only is the total number of ads decreasing, but with such smaller audiences, newspapers are not able to charge to as high a rate.
Digital: The economics of the web hit a milestone in 2010. For the first time, more money was spent on online advertising than on print newspaper advertising. Online advertising overall grew 13.9% to $25.8 billion in 2010, according to data from eMarketer. A challenge for news organizations is that much of this online ad spending, 48%, is in search advertising, little of which finances news. Banner ads, where news organizations currently get most of their online ad revenue, make up less than half that — or 23% of all online ad spending. There was, though, in 2010 some development in more sophisticated banner ads that might attract greater advertising.
Mobile ad spending still amounts to just 3% of total online ad spending ($743 million), but it increased an impressive 79% in 2010. User fees have not seen this kind of growth yet. Fewer news organizations than expected moved to paid content models in 2010, and consumers paying for news apps are still rare. Just 10% of those who use an app for local news had paid for it, according to new survey data released in this report.
Cable News: Despite declining audiences, revenues for each of the cable news channels were projected to increase in 2010 a total of 10.7% across the three networks: Fox grew 17% to $1.5 billion, CNN and HLN 5% to $1.2 billion, and MSNBC was up 7% to $383 million. Ad revenue was up 8.4%. Cable derives half its revenue from subscription fees, which are set in long-term contracts and thus are somewhat recession-proof. Less than 1% of households, research suggests, dropped cable subscriptions in 2010, despite a difficult economy. And in the targeted world of cable, demographics are critical. SNL Kagan estimates that the financial channel CNBC, though its audiences are small, would generate $723 million in revenue, up 7% over 2009 and nearly double the amount brought in by MSNBC and rivaling the broadcast revenues of NBC TV news (all three are owned by NBC Universal).
Network News: PEJ estimates that the three networks news divisions each saw ad revenue growth between 5% and 7% in 2010, benefiting from a more robust ad environment than 2009, even though declining audiences put pressure on how much programs can charge. NBC, thanks to its multiplatform structure developed some years ago, continues to be in the strongest position. In early 2011, CBS looked to cable for new leadership, tapping Bloomberg TV executive David Rhodes to become president of CBS News. ABC News was projected to make a profit in 2010, thanks largely to cutbacks of 25% in staffing.
Local TV News: Among traditional media, local TV may have had the best year financially. Revenue rose 17%, exceeding projections, thanks in part to a 77% increase in auto advertising and a record $2.2 billion in political advertising for the midterm elections. Local stations also brought in $1.34 billion from online and mobile advertising in 2010, up 8% from the year before, according to Borrell Associates. Nonetheless, when adjusted for inflation, average station revenue has still dropped by almost half in just the past nine years.
Audio: Traditional radio also regained its financial footing in 2010. Revenue grew 6%, after a drop of 18% a year earlier. But its ventures into newer media aren’t fairing as well. HD Radio, once the hope of traditional broadcasters to gain new audience and advertisers, looks to be failing. Only 31% of Americans had even heard of it, and the number of stations converting to HD has dropped sharply. Satellite radio, out of bankruptcy now, picked up with revenue growth of 12%.
Magazines: In print magazines the number of ad pages sold across the industry overall was flat in 2010 (-0.1%), after steep declines in 2008 (11.7%) and in 2009 (25.6%). News magazines fared slightly better with an increase in ad pages of 1.4%. Much of that growth came from niche publications, while general-interest publications have had a harder time, according to Publishers Information Bureau. The year no doubt would have been tougher had ad pages not increased in the automotive category by 16.9%. But 2010 is probably earmarked as much as anything by the sale of Newsweek for a dollar and the assumption of debt by audio magnate Sidney Harman. Newsweek, according to its sales prospectus, lost $85 million (before pension credit) in 2008 and 2009 combined and was on track to lose $22 million in 2010.
In general, traditional American newsrooms are substantially smaller than they were a decade ago, although in 2010 the cutbacks eased off. What is occurring now, however, is investment in new quarters. Online publications such as AOL’s Patch and Yahoo are growing. So is Bloomberg Government (at bgov.com), a new spate of products covering government aimed at audiences no longer served by the mainstream press. In a sense, resources are shifting both to the net, and particularly to destinations aimed at niche and elite audiences that will pay this content. Specialized audiences can also attract elite advertising.
Cable: For the first time, Fox surpassed CNN in total dollars spent on the news. The market researcher SNL Kagan projected Fox would spend $686 million in 2010 to CNN/HLN’s $672 million. CNN, however, still maintained a bigger news infrastructure than its competitors, with 47 bureaus, domestic and foreign, in 2010. Fox, which spends more of its money on hosts, had 17 bureaus or offices. MSNBC, which uses NBC News bureaus, had access to 21 editorial offices, according to information from the channels.
Network News: The network news divisions already much smaller and more mobile than just a few years ago, continued to adjust their news division strategies. At ABC, outgoing news president David Westin cut the staff by 25%, or close to 400 people, before stepping down at the end of 2010, trying to move the news division toward one-person mobile journalists. CBS started the year with some layoffs, too, but generally held steady, and in early 2011 named a new management team to run its news division. NBC, after several years of cutbacks, also held steady in 2010, but went through major ownership change. It remains to be seen how its new owner, Comcast, will regard the news division, which includes MSNBC TV, CNBC, CNBC International and NBC News.
Newspapers: In newspapers, the bloodletting seemed to have eased somewhat. After losing close to a third of its editorial ranks in the previous decade, and 11,000 in just three years, the nation’s newspapers trimmed only marginally in 2010. We estimate losses of about 1,100 to 1,500 people, or 3% to 4%. By recent standards, that is an improvement, although it leaves the largest newsrooms in the most American cities bruised and necessarily less ambitious than they were a decade ago.
Online: After years of building largely in the realm of curation and aggregation, online news entities invested in news gathering. By one count, even before acquiring Huffington Post (which has an editorial staff of 70 to 80, of which an estimated 18 produce content and the rest aggregate and curate), AOL had hired 900 employees over the summer 2010 (it then let go 200 people from the content team after the merger with Huffington Post). Bloomberg’s new Washington operation, Bloomberg Government, expects to number 150 journalists and analysts by the end of 2011, doubling Bloomberg’s Washington bureau and making it the biggest in the capital. The Bloomberg Government model melds journalists and expert analysts to produce an editorial product that combines news, data, analysis and analytic tools. The universe of local new media is becoming more robust as well. With 14 full-time journalists, Texas Tribune, the new nonprofit-funded operation in Austin, now makes up a third of the Texas Statehouse reporting corps and obviously the largest contingent. That, however, partly reflects the decline in traditional media. Tribune Editor Evan Smith says the number of reporters covering the statehouse has shrunk by two-thirds in the 20 years he has been in the state.
Four events stand out in the changing media landscape this year.
NBC: In January 2011, Comcast, the nation’s largest cable TV company, finally completed taking control of NBC Universal, cementing one of the largest media mergers in recent history. In the works for more than a year, the deal gave Comcast 51% control of NBCU for a cost of $14 billion. That leaves General Electric with a 49% stake after its purchase of French company Vivendi’s 20% share of the company. Under Comcast’s management now are NBCU’s broadcast, cable and online news brands, along with its entertainment divisions, theme parks and unconsolidated investments. NBC president Jeff Zucker is gone, replaced by Steve Burke, Comcast’s chief operating officer. Comcast has publicly talked about maintaining the integrity of NBC News. It denied having any part in the decision to dismiss MSNBC’s liberal prime-time host, Keith Olbermann. But there are signs that some of the brand issues left over from GE’s stewardship may be a concern going forward. One internal memo from MSNBC.com talked about rebranding the website for fear that the site’s general news orientation would be confused with the point-of-view programming on its corresponding cable channel.
Newsweek: On Nov. 12, 2010, Newsweek magazine and The Daily Beast web publication agreed to merge operations into a new company — the Newsweek Daily Beast Company. Daily Beast editor-in-chief Tina Brown became the editor of both entities. The merger was the second transition in just a few months for the beleaguered Newsweek. Four months earlier, Newsweek’s longtime owner, the Washington Post Company, had sold the magazine to audio magnate Sidney Harman for $1 and the assumption Newsweek’s extensive debt. After searching for months to find a new editor for Newsweek, Harman decided to pursue a multimedia partner for the weekly news magazine. Brown, a high-profile editor with successful stints at Vanity Fair and the New Yorker, said: “I see Newsweek and the Daily Beast as a marriage between Newsweek’s journalistic depth and the vibrant versatility The Daily Beast has reached on the web.” The first issue of the revamped Newsweek magazine is scheduled for spring 2011.
AOL: In February 2011, one of the web’s oldest companies, AOL, purchased one of the youngest, Arianna Huffington’s brainchild, the Huffington Post for $315 million. AOL is already a major player in online news, AOL News is the third- or fourth-most-visited news site on the web (depending on the measurement company) and HuffingtonPost.com is No. 8. While HuffingtonPost’s revenue is relatively small, around $31 million in 2010, relative to AOL’s $2.4 billion, AOL gets to roll a top-10 news destination into its wider content, and more importantly advertising, network. Huffingtonpost.com benefits from becoming part of a larger network, using AOL’s network to reach more consumers and attract larger and more diverse advertisers.
Philadelphia: On Oct. 8, 2010, a collection of 32 financial institutions called Philadelphia Media Network took control of the Philadelphia Inquirer, the Philadelphia Daily News and the website Philly.com, ending an acrimonious 20-month bankruptcy battle for control for the Philadelphia region’s dominant news source. The new company replaced Philadelphia Media Holdings, a local investors group led by Brian P. Tierney, which bought the newspapers and the website for $515 million from McClatchy in 2006. When the company declared bankruptcy in early 2009, it owed senior lenders about $318 million. Eventually, there were two auctions for the company, one in April 2010 and another in September 2010. Both ended with the company’s senior lenders winning with a bid of about $139 million. Greg Osberg, a former publisher of Newsweek, became president and chief executive officer. Osberg immediately reduced the company’s staff by 5% and removed a number of top managers, including Inquirer editor William K. Marimow. Over the next few months, Osberg instituted content, design and product changes that he said were “designed to make us more competitive in the new media landscape.”
- 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 a December 2010 survey conducted by the Pew Research Center for People and the Press. 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 average morning news (5-7AM E.T.), early evening news (5-7PM E.T.) and late evening news (11-11:30PM E.T.) combined viewership (individuals over the age of 2) for ABC, CBS, Fox and NBC affiliates (for the three sweeps measured, May, July, November). The magazine figure is based PEJ’s analysis of circulation data provided by the Audit Bureau of Circulations. It represents the average circulation full year of 2010, compared to 2009, 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, 2010, compared to the same period a year earlier. The radio figures are based on a December 2010 survey conducted the Pew Research Center for the People & The Press. ↩
- Cable figures are based on estimated combined ad revenues for CNN/HLN, Fox News Channel and MSNBC for 2009 and 2010, provided by SNL Kagan, a division of SNL Financial LLC. Online figures are total online display ad revenues, from January to September 2010, compared with the same period in 2009, provided by eMarketer. Network figures are based on revenue estimates for network television ads from January to September 2010, compared with the same period in 2008, provided by Kantar Media. 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 for print and online ad revenue combined are derived by Rick Edmonds of the Poynter Institute based on data provided by the National Newspaper Association. After our report was published, the Newspaper Association of America released its final tally and put the drop at 6.3%. Local TV figures are based on revenue estimates for local and national spot advertising on local TV from January to December 2010, compared with the same period in 2009, provided by BIA/Kelsey. ↩