Friday, 21 September 2012

News (including online) is a dying business

The demise of printed news has been prophesized for years and now there are statistics confirming it's official.  But, it's not just the traditional printed newspaper that's withering: it's the news altogether.

A bit of recent history: News houses like The Guardian, The Washington Post et al were initially slow to react to the Internet.  Afraid of cannibalizing print circulation if they published their news online for free, they were eventually forced to join the Web or risk losing ground to free news websites that were cropping up everywhere.  The hope was that their online presence would entice people to subscribe and pay for well reported news, qualified insight and weighted opinion.  The website served as the free (but generous) appetizer, but the full meal you had to pay for.

Today the websites of The Washington Post and Time Magazine are highly regarded and presumably attract healthy traffic.  Yet the Capre Diem blog published this graph showing a steep, unmistakable decline in newspaper ad revenue, both including (red line) and excluding (blue line) online revenue.




















Yes, it's not just print news that's suffering, it's online news too.  Advertisers spent about $56 billion in 2004, and within an alarmingly short space of time it's dropped to practically a third of that in 2012.  Note the source of information: it's the Newspaper Association of America (N.A.A), not some anti-news lobby.  Advertising revenues are set to drop below 1950 levels, the year in which the N.A.A. started tracking these numbers.

The traditional news houses are losing out to a plethora of information portals like search engines, social networks and blogs, particularly:

Google Search

Advertising with Google sees a much higher click through rate than an ad that's randomly placed on a website.  When you do a search for the latest Nike Air Jordan shoes, immediately an ad that links you to someone selling that very pair of shoes will crop up.  The instant you actively seek something, Google serves up the provider.  The timing couldn't be sweeter.  This is why most marketing departments have a healthy advertising budget allocated to Google.

Social Media

While I feel that most social media platforms are faddish and run the risk becoming uncool very quickly, the current popularity of Facebook and the like cannot be ignored.  And if something is popular it attracts advertisers.  This popularity is coming at the expense of the newspapers as advertising money is re-directed towards these social networks.  Marketing departments at present don't seem to mind the low click through rates of ads featured on Facebook and Twitter, so until they one day see that the king has no clothes they will continue to spend money advertising on this thing called social media, while the newspapers lose out.

Blogs

Many sites that appear to be news sites are actually tarted up blogs.  Business Insider, Bleacher Report and Tech Crunch come to mind.  They provide readers with opinionated, summarized news.  Much of their information is simply gleaned from respected news sites, ironically.  Their reporters will then give it a mild do-over and publish it as their own story (nothing illegal about this).  These blogs spend next to nothing on reporters and research yet attract very high and frequent traffic.  Through 'reverse engineer' reporting from various sources, they churn stories out much faster than your respected newspaper does.  Research, proofreading and editing are not too consequential; the lack thereof doesn't seem to deter their readership much.

News as a business is sadly on the decline, and it's a dark day indeed when sensational quasi-journalism is preferred over thorough, carefully written, professionally edited material.

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