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Newspapers finally eclipsed by online news and ad revenue

Newspapers and print publishing have been wondering how they can compete meaningfully with online media for years—and now the question is truly coming to a head. The Pew Research Center’s Project for Excellence in Journalism State of the News Media report for 2011 finds that, for the first time, online news readership and advertising revenue in the United States has exceeded that of traditional print newspapers. The study finds that traditional newspapers’ businesses are caught on the horns of two forces: the general economic downturn that dramatically reduced advertisers’ spending, and consumers’ increasing choice to look online for news and information rather than in print publications.

According to the report, some 46 percent of Americans surveyed get their news online at least three times per week, compared to just 40 percent who get news from traditional newspapers or newspapers’ Web sites.

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Overall, the study found that advertising revenue for newspapers was down by some 46 percent in 2010 compared to 2006, although it still accounted for some $22.8 billion in revenue. However, while television has started to see a rebound in advertising sales as the economy shows signs of recovery, newspapers have yet to see any uptick in their ad sales. Furthermore, with smaller audiences, newspapers can’t sustain their ad rates.

According to the study, newsrooms are currently about 30 percent smaller than they were in 2000. and news operations are hurt even more by conversion to online advertising, where nearly half the money spent is in search advertising, comparatively little of which targets news. However, the study also notes online news outlets are starting to add reporters, which may be offsetting jobs lost in traditional newsrooms: before recent layoffs, AOL was estimated to have some 500 journalists employed in its Patch operation for local news, and major outlets like Bloomberg and News Corp have added online reporting positions.

Newspapers weren’t the only media outlet to suffer during 2010, according to the report. While online media saw a 17.1 percent increase in its audience during the year, cable television saw a drop of 13.7 percent, and magazines saw an 8.9 percent drop. Audio (like AM/FM radio) saw a 6 percent drop, whereas newspapers only saw a 5 percent drop during the year. Network TV dropped 3.4 percent, and local TV saw the smallest decline of all: 1.5 percent.

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