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SPECIAL REPORT the NEWS INDUSTRY July 9Th 2011

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SPECIAL REPORT the NEWS INDUSTRY July 9Th 2011 SPECIAL REPORT THE NEWS INDUSTRY July 9th 2011 SRNEWS.indd 1 27/06/2011 10:58 SPECIAL REPORT THE NEWS INDUSTRY Bulletins from the future The internet has turned the news industry upside down, making it more participatory, social, diverse and partisanas it used to be before the arrival of the mass media, says Tom Standage EVEN IF YOU are not a news junkie, you will have noticed that your daily CONTENTS news has undergone a transformation. Television newscasts now in- clude amateur videos, taken from video-sharing websites such as You- 3 How newspapers are faring Tube, covering events like the Arab spring or the Japanese tsunami. Such A little local diculty videos, with their shaky cameras and people’s unguarded reactions, 5 Making news pay have much greater immediacy than professional footage. Messages post- Reinventing the ed on Twitter, the microblogging service, have been woven into coverage newspaper of these events and many others. You have these really intimate man-in- the-street accounts, and you can craft a narrative around them, says Jack 7 Social media Dorsey, co-founder of Twitter. A computer consultant in Pakistan unwit- The people formerly known tingly described the raid on Osama bin Laden’s compound in a series of as the audience tweets. The terrorist attacks in Mumbai in 2008, too, were reported on 10 WikiLeaks and other Twitter in real time by people who were there. newcomers The past year has also seen the rise to fame of WikiLeaks, an organi- Julian Assange and sation that publishes leaked documents supplied to it anonymously. Wi- the new wave kiLeaks and its media partners have published detailed records of the Af- ghan and Iraq wars, hundreds of classied American diplomatic cables 12 Impartiality and records from the Guantánamo Bay detention centre. We believe The Foxication of news that true information does good, says Julian Assange, WikiLeaks’ foun- 14 The end of mass media der. Our goal is not just to have people reading documents, but to Coming full circle achieve political reforms through the release of information. In January this year Al Jazeera, a news organisation based in Qatar, published its own cache of leaked documents, known as the Palestine Papers, which lifted the lid on more than a decade of Israeli-Palestinian ACKNOWLEDGMENTS negotiations. And by broadcasting amateur videos of the Tunisian upris- In addition to those quoted in the ing to its millions of satellite viewers across the Arab world, the channel text, the author would like to thank played an active role in spreading the protests across the region. Among A list of sources is at the following for their generous help: television news organisations it has led the way in integrating social me- Economist.com/specialreports Annelies Van Den Belt, Harry Evans, dia (such as tweets, Facebook posts and amateur online video) into its op- Alex Gubbay, Richard Gutjahr, An audio interview with Abhishek Kumar, Justin Osofsky, Meg erations in order to engage with its increasingly wired audience. The the author is at Pickard, Martin Raymond and way we operate has changed because the landscape has changed dra- Economist.com/audiovideo/ Georey Sands. matically, says Moeed Ahmad, the rm’s head of new media. 1 specialreports The Economist July 9th 2011 1 SPECIAL REPORT THE NEWS INDUSTRY Reading EUROPE -8 the news NORTH ASIA AMERICA +13 WORLD Paid-for daily newspapers -11 +6 Average circulation, 2005-09, % change By country SOUTH AFRICA AMERICA OCEANIA < -15 0 to No to > 150 No +30 -15 change 15 data -5 -6 Selected countries United Average circulation Britain States Germany France Japan Australia 2005-09, % change -15.9 -13.3 -8.3 -5.7 -4.2 -3.8 0 6.1 10.4 20.7 39.7 South China Brazil India Africa Circulation WORLD 2009, m 517 14.0 46.3 19.7 7.3 50.4 2.5 1.6 109.0 8.2 109.9 Social-media 50 penetration % of population, Q2 2011 25 Facebook Twitter 0 na News sources 100 Newspaper revenues Where Americans get most of Contribution to paid-for their news about national and 75 daily-newspaper revenues, The Economist international issues, 2008, % of total % of respondents: United States Germany 50 Advertising 25 Newspaper Television Internet Radio 0 Circulation Britain Japan 2001 02 03 04 05 06 07 08 09 10 Sources: comScore; OECD; Pew Research Centre; socialbakers.com; UN; World Association of Newspapers; 2 Clearly something dramatic has happened to the news pictures or video that can be picked up and republished. Journal- business. That something is, of course, the internet, which has ists initially saw this as a threat but are coming to appreciate its disrupted this industry just as it has disrupted so many others. benets, though not without much heart-searching. Some orga- By undermining advertising revenue, making news reports a nisations have enlisted volunteers to gather or sift data, creating commodity and blurring the boundaries between previously new kinds of crowdsourced journalism. Readers can also distinct news organisations, the internet has upended newspa- share stories with their friends, and the most popular stories pers’ traditional business model. But as well as demolishing old cause a ood of trac as recommendations ripple across social ways of doing things, it has also made new ones possible. As pat- networks. Referrals from social networks are now the fastest- terns of news consumption shift, much experimentation is un- growing source of trac for many news websites. Readers are der way. The internet may have hurt some newspapers nan- being woven into the increasingly complex news ecosystem as cially, but it has stimulated innovation in journalism. sources, participants and distributors. They don’t just consume news, they share it, develop it, add to itit’s a very dynamic rela- Reporters all tionship with news, says Arianna Hungton, co-founder of the For consumers, the internet has made the news a far more Hungton Post, a news website in the vanguard of integrating participatory and social experience. Non-journalists are acting news with social media. as sources for a growing number of news organisations, either As well as making Twitter, Facebook and Google part of the by volunteering information directly or by posting comments, news ecosystem, the internet has also made possible entirely 1 2 The Economist July 9th 2011 SPECIAL REPORT THE NEWS INDUSTRY 2 new kinds of specialist news organisations. It has allowed Wiki- of their total revenue, more than any other country surveyed. Leaks, for example, to accept documents anonymously and pub- The 2008-09 recession made things worse. Between 2007 and lish them to a global audience, while oating in cyberspace 2009 newspaper revenues in France fell by 4%, in Germany by above national jurisdictions, operated by a small, nomadic 10% and in Britain by 21%. In America they plummeted by 30%. team. Other newcomers include a host of not-for-prot news or- On top of that, a series of mergers and acquisitions in the Ameri- ganisations that rely on philanthropic funding and specialise in can newspaper business left many companies saddled with particular kinds of journalism. Many of these new outts collab- huge debts and pushed several into bankruptcy. orate with traditional news organisations, taking advantage of For American regional and metro-area newspapers, further their broad reach and trusted, established brands. job cuts, closures and consolidation now seem likely. In retro- All these new inhabitants of the news ecosystem have spect it is clear that the industry became too dependent on local brought an unprecedented breadth and diversity of news and advertising monopolies. The real trouble that a lot of US news opinion to the business. This has cast new light on a long-run- organisations have is that they are dened by geographyby ning debate about the politics of journalism: when there are so how far trucks could go to deliver papers in the morning, says many sources, does political objectivity become less important? Joshua Benton, head of the Nieman Journalism Lab at Harvard This special report will consider all these trends in turn, University. The internet has undermined that business model by starting with a look at the state of the industry and the new busi- providing alternatives for both advertisers and readers. ness models that are emerging. It will argue that as news be- The health of newspapers is particularly important be- comes more social, participatory, diverse and partisan, it is in cause they tend to set the agenda for other news media and em- many ways returning to the more chaotic, freewheeling and po- ploy the most journalists. In America, for example, the national litically charged environment of the era before the emergence of television networks had around 500 journalists on their sta in mass media in the 19th century. And although the internet has 2009, compared with more than 40,000 for daily newspapers proved hugely disruptive to journalists, for consumerswho (down from 56,000 in 2001). But it would be wrong to conclude now have a wider choice than ever of news sources and ways of from the woes of American newspapers that newspapers and accessing themit has proved an almost unqualied blessing. 7 news are in crisis everywhere. The United States is the worst case that we see worldwide, and a lot of media news comes out of the US, so it is exceedingly negative. But the US experience is not being replicated else- How newspapers are faring where, says Larry Kilman, deputy head of the World Associa- tion of Newspapers (WAN), an industry body. There’s an as- A little local diculty sumption that there’s a single crisis aecting all news organisations, and that’s not the case, says David Levy, director of the Reuters Institute for the Study of Journalism at Oxford University.
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