U.S. newspapers saw ads revenue decline by more than 6% in 2010 - report

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U.S. newspapers saw ads revenue decline by more than 6% in 2010 - report

2011-03-14 21:11:30 GMT+7 (ICT)

WASHINGTON, D.C. (BNO NEWS) -- U.S. newspapers saw their revenue from advertisements decline by more than six percent in 2010, compared to a year earlier, according to a report released by Pew Research Center's Project for Excellence (PEJ) on Monday.

The report, which analyzed the state of the U.S. news media in 2010, showed that most sectors in the media improved in 2010. The only exception were newspapers, which have seen continued ad revenue and audience decline for years as an increasing number of people get their news online.

Last year marked the first year that online publications surpassed print newspapers in both revenue and audience. But, the report notes, these online publications are increasingly depending on independent networks to sell their ads and on aggregators such as Google News and social networks such as Twitter to deliver a substantial portion of their content to their audience.

Also, with news consumption starting to go mobile, device makers such as Apple and software developers such as Google are increasingly being build upon by news organizations. These new players often take a share of the revenue generated and in many cases control the audience data.

"In a world where consumers decide what news they want and how they want to get it, the future belongs to those who understand the audience best, and who can leverage that knowledge with advertisers," said PEJ Director Tom Rosenstiel. "Increasingly that knowledge exists outside of news companies."

The study shows that nearly half of all Americans now get some form of local news on a mobile device. And seven percent of people who participated in a PEJ survey in January said they own some kind of electronic tablet, which is nearly double from four months earlier.

But, the study notes, this large percentage of people getting mobile news does not necessarily mean that mobile news providers can make a substantial profit from it. The survey conducted showed that only 10 percent of people who have downloaded local news apps paid for them.

In addition, the report shows that 46 percent of all Americans now say they get news online at least three times a week, surpassing newspapers (40 percent) for the first time. But with 50 percent, only local TV news is a more popular platform in America.

And in another milestone, more money was spent on online advertising than on newspaper advertising in 2010. Online advertising overall grew 13.9 percent to $25.8 billion in 2010, according to data from eMarketer. And while eMarketer does not offer figures on print ad revenue, PEJ estimated that newspapers took in $22.8 billion in print ad revenue in 2010.

Overall, advertising revenues for the newspaper sector fell by roughly 6.4 percent in 2010 from the year before. Weekday circulation fell 5 percent and Sunday fell 4.5 percent, the report said. Meanwhile, seven of the top 25 newspapers in the United States are now owned by hedge funds, which had virtually no role in the industry a few years ago. Many of these new owners are turning to other outsiders to turn the business around. But one potential silver lining is the finding that 23 percent of Americans said they would pay 5 dollars a month for an online version of their local paper if the print version were to perish.

And in another sign that online news organizations seem to have a bright future ahead, all media sectors except online lost audience in 2010. CNN suffered most with median prime-time viewership falling a staggering 37 percent in 2010, compared to 11 percent for Fox News and 5 percent for MSNBC. In aggregate, the median viewership fell 13.7 percent across the entire day in 2010, while prime-time median viewership dropped by 16 percent.

Further, PEJ says large national online-only news operations began to get into the creation of original reporting in a significant way in 2010. AOL hired nearly 1,000 employees, over half of whom went to the new local news venture Patch.com. Bloomberg Government expects to number 150 journalists and analysts by the end of 2011, doubling Bloomberg's Washington bureau and Yahoo added several dozen reporters across news, sports and finance. These hiring increases appeared to have compensated for the 1,000 to 1,500 job losses the study estimates the newspaper industry suffered in 2010.

Among traditional media, local TV may have had the best year financially, PEJ said. Revenue rose 17 percent, which exceeded projections, thanks in part to a 77 percent increase in auto advertising and a record $2.2 billion in political advertising for the midterm elections. And, to boost audience, local TV has added newscasts at 4:30 AM in 69 cities; more than double the startups in that time slot a year ago. Nonetheless, when adjusted for inflation, average station revenue has still dropped by almost half in the past nine years, the report noted.

Meanwhile, AM and FM radio remained a stable media platform in 2010. But PEJ expects this to change as Toyota is about to put online radio in all its models and Pandora has made an agreement with Pioneer that would include its online radio service in the cars of at least six additional auto manufacturers by the end of the year.

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