US newspapers are in a state "perilously close to free fall" and time is running short for them to find a business model and reinvent themselves, according to a study released on Monday. The Pew Research Centers Project for Excellence in Journalism said its 2009 report on the State of the News Media was the "bleakest" it has issued since it began doing the annual studies six years ago.
The report examined newspapers, online media, network, cable and local television news as well as news magazines, radio and the ethnic press. US weekly news magazines and daily newspapers, it found, are particularly troubled. "The newspaper industry exited a harrowing 2008 and entered 2009 in something perilously close to free fall," the reports authors said. Nevertheless, they said, "we still do not subscribe to the theory that the death of the industry is imminent.
"The industry over all in 2008 remained profitable. "But the deep recession already threatens the weakest papers," they warned. "Nearly all are now cutting so deeply and rapidly that simply coping with the economic downturn has become a major distraction from efforts to reinvent the economics of the business. "If the industry is not dying, the more pertinent question may be can newspapers beat the clock?" they asked. "Can they find a way to convert their growing audience online into sufficient revenue to sustain the industry before their shrinking revenues from print fall too far?"
The Pew report said two developments converged in the last year to "shorten the time that journalism has left to reinvent its business model and secure its financial future.
"First, the audience migration to the Web accelerated substantially in 2008 ... but online ad revenue flattened, and in newspapers it declined. Second, the recession hammered advertising and diverted attention away from innovating new revenue sources," the report said. "The result of the changes of 2008," the study said, "is an industry diminished, with less time and resources to finance the transition.
"On the other hand, the notion that traditional journalism is on the brink of extinction is overstated," it said. "The death of newspapers is not imminent, despite news of bankruptcies and even some closures. "Even newspapers whose companies are in bankruptcy are profitable. But revenues fell 14 percent last year, and have fallen 23 percent in two years.
"The stock of publicly traded newspaper companies fell 83 percent in 2008. "The industry lost 10 percent of its newsroom jobs, we estimate, last year, and more than that at larger papers. By the end of 2009, a quarter of all the newsroom jobs that existed in 2001 will be gone," the report said.
While some US papers are abandoning print to go online, "going all-digital is not likely to become widespread anytime soon," the report said. "Papers still make roughly 90 percent of their revenue from print." The study said alternative news sites were not filling the gap. "The new media in aggregate are far from compensating for the losses in coverage in traditional newsrooms, and despite enthusiasm and good work, few if any are profitable or even self-sustaining," they said.
Weekly news magazines are also facing a bleak future. "Less than a quarter of American adults said they read a magazine of some kind the day before - down from a third in 1994," the report cited a recent survey as saying.
Local and network television news are also in trouble. "In local television, news staffs, already too small to adequately cover their communities, are being cut at unprecedented rates," the report said. "In network news, even the rare programs increasing their ratings are seeing revenues fall." Cable television news was the only bright spot. "With an almost singular focus on politics, cable saw overall average ratings through the day and evening rise 38 percent in 2008, and profits rose 33 percent," the report said.