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The Evolution of News and the Internet

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The Evolution of News and the Internet Unclassified DSTI/ICCP/IE(2009)14/FINAL Organisation de Coopération et de Développement Économiques Organisation for Economic Co-operation and Development 11-Jun-2010 ___________________________________________________________________________________________ _____________ English - Or. English DIRECTORATE FOR SCIENCE, TECHNOLOGY AND INDUSTRY COMMITTEE FOR INFORMATION, COMPUTER AND COMMUNICATIONS POLICY U DSTI/ICCP/IE(2009)14/FINAL nclassified Working Party on the Information Economy THE EVOLUTION OF NEWS AND THE INTERNET English - Or. English JT03285390 Document complet disponible sur OLIS dans son format d'origine Complete document available on OLIS in its original format + DSTI/ICCP/IE(2009)14/FINAL FOREWORD This report was presented to the Working Party on the Information Economy (WPIE) in December 2009 and was declassified subject to minor revisions by the Committee for Information, Computer and Communications Policy in March 2010. The report was prepared by Sacha Wunsch-Vincent in conjunction with Graham Vickery of the OECD‘s Directorate for Science, Technology and Industry. Cristina Serra Vallejo (OECD) and Soo Youn Oh (Seoul National University, Korea) have contributed to the research of this study. The report has benefitted from multiple inputs provided by delegations and external experts as referenced in the ‗Background‘ section. This work is part of the WPIE‘s work on digital broadband content under the overall direction of Graham Vickery. Other studies in the series include scientific publishing, music, online computer games, mobile content, user-created content, film and video, public sector information and content, and work on virtual worlds. It is published on the responsibility of the Secretary-General of the OECD. © OECD, 2010 2 DSTI/ICCP/IE(2009)14/FINAL TABLE OF CONTENTS SUMMARY .................................................................................................................................................... 6 MAIN POINTS ............................................................................................................................................... 7 Part 1: The evolving newspaper publishing industry ................................................................................... 7 Part 2: The value chain and economics of the traditional newspaper industry ............................................ 8 Part 3: Online news: Developments, value chains, business models and actors .......................................... 8 The Internet as an important but complementary source of news ............................................................ 9 Internet traffic to online news sites .......................................................................................................... 9 Online news distribution: Value chains, business models and actors .................................................... 10 Part 4: The future of news creation and distribution: Opportunities and challenges ................................. 11 Part 5: Business and policy issues ............................................................................................................. 11 INTRODUCTION ......................................................................................................................................... 12 Background ................................................................................................................................................ 13 Objective and structure of this study ......................................................................................................... 13 PART 1: THE EVOLVING NEWSPAPER PUBLISHING INDUSTRY .................................................... 15 Historic evolution of news provision ......................................................................................................... 15 Size of the global newspaper publishing market and industry ................................................................... 17 Market and turnover ............................................................................................................................... 17 Circulation .............................................................................................................................................. 19 Employment ........................................................................................................................................... 20 Recent newspaper market developments ................................................................................................... 22 Number of titles ...................................................................................................................................... 22 Paid newspaper circulation ..................................................................................................................... 24 Mostly declining reach and readership ................................................................................................... 28 Free dailies ............................................................................................................................................. 30 The impacts of the recent economic crisis ............................................................................................. 31 PART 2: THE VALUE CHAIN AND ECONOMICS OF THE TRADITIONAL NEWSPAPER INDUSTRY ................................................................................................................................................... 33 Traditional newspaper value chain ............................................................................................................ 33 The economics and revenue structure of established newspapers ............................................................. 34 Advertising ............................................................................................................................................. 35 Circulation revenues ............................................................................................................................... 38 The economics and cost structure of established newspapers ................................................................... 39 Profitability ................................................................................................................................................ 40 PART 3: ONLINE NEWS: DEVELOPMENTS, VALUE CHAINS, BUSINESS MODELS AND ACTORS ....................................................................................................................................................... 42 Online news distribution: Developments ................................................................................................... 42 Drivers of online news ........................................................................................................................... 42 3 DSTI/ICCP/IE(2009)14/FINAL The Internet as an important but complementary source of news .......................................................... 43 The demographics of online news consumption .................................................................................... 44 Internet traffic to online news sites ........................................................................................................ 47 Online news distribution: Value chains, business models and actors ........................................................ 50 Changed news value chain ..................................................................................................................... 51 Changed online news business models .................................................................................................. 54 Online news actors: Impacts, approaches and business models ............................................................. 55 PART 4: THE FUTURE OF NEWS CREATION AND DISTRIBUTION: OPPORTUNITIES AND CHALLENGES ............................................................................................................................................. 58 Opportunities in the changing news environment ...................................................................................... 58 Challenges in the changing news environment .......................................................................................... 59 PART 5: BUSINESS AND POLICY ISSUES.............................................................................................. 63 Policy overview for the news industry ....................................................................................................... 63 Recent policy discussions and actions ....................................................................................................... 66 Selected policy issues ................................................................................................................................ 71 Fostering newspaper readership and multimedia skills .......................................................................... 71 Freedom of information, the press and expression ................................................................................. 71 Journalistic skills and working conditions ............................................................................................. 72 Quality, reliability and governance of online news ................................................................................ 73 The role of public sector
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