Wednesday, February 18, 2009

Pew Research Center Uncovers A Major Crossover In News Consumption; More People Now Get News From The Internet (40%) Than From Newspapers (35%)

If anyone thinks Anchorage Daily News Executive Editor Patrick Dougherty has merely been playing Chicken Little about the financial health of the newspaper industry in general and ADN in particular (read the ADN Editor's blog), this post will cure you of that notion. The newspaper industry is in trouble, and the Pew Research Center has uncovered a major sea change occurring in 2008 which does not portend better tidings for the industry's future.

Pew reveals that we've reached a crossover point. For the first time ever, more people get their news from the Internet than from newspapers. Specifically, while 40 percent cite the Web as their prime source of news, only 35 percent cite newspapers as their main outlet. But the Web still has quite a way to go to catch up with television, which is still cited as the primary news source by 70 percent of people. You can read their full story HERE.

The story is accompanied by a chart measuring trends since 2001. During that time, newspaper preference, which started out in the 45-50 percent range, dropped off into the mid-30s in 2005 and has remained constant since then. In contrast, Internet preference started out in the teens and climbed slowly into the 20s. In 2007, 34 percent of people still preferred newspapers while only 24 percent preferred the Web. But in 2008, while newspaper preference remained at 35 percent, Internet preference dramatically skyrocketed to 40 percent.

Some of the increase can be attributed to the "election bump", particularly with the advent of Sarah Palin's candidacy. A similar but smaller election bump occurred in 2004. But there's more to it than an "election bump"; Internet access has increased exponentially as providers offer progressively more attractive package deals to residential users. Increased competition has kept prices relatively stable; many offer unlimited Internet access for a fixed monthly fee. And most websites themselves are free. This is one reason why, although ADN has had to cut newspaper size and personnel staff to get back in the black, their website was among the top 30 newspaper websites in the U.S. during December, ranking number 24. One hell of a dichotomy, I say.

With interest in newspapers shifting from the physical product to the cyber product, this means at some point the revenue streaming must likewise shift, if the newspapers want to remain in business. Making their sites all-subscription will NOT work; the public is too accustomed to a free product. I guarantee you if the Anchorage Daily News was to become a paid subscription site, they would be on the fast track to bankruptcy overnight, overtaking parent company McClatchy on the way down. An interesting article in the Telegraph further discusses prospective alternatives.

But there are a couple of business models I've seen that would enable ADN and others to start financially exploiting some of that increased Web traffic, while remaining fundamentally "free":

(1). The Ogden Standard-Examiner: This paper's website has two options; a subscription-only Digital Edition, and a free Standard Edition. The Examiner will post exclusive stories only to the Digital Edition initially, then release them to the Standard Edition 24-48 hours later. This permits financial exploitation of those who value the freshest news and who don't mind paying a small subscription fee.

(2). The Salt Lake Tribune: All of their content is free, but it automatically gets dumped into paid archives 30 days later. Of course, that sucks if you're a blogger and you link to their stories; after 30 days, a reader clicking on the link will get a "paid archive" message instead of the story.

The skyrocketing trend in Internet preference is likely to level off in 2009, but the shift in preference appears permanent, for now. We can probably expect more people to get their news from the Internet rather than newspapers for the foreseeable future. And at some point, the newspapers will have made all the cuts possible, and will have to look at restricting access to some parts of their website to what Stormfront calls "sustaining members" (that means "pony up") in order to stay in business. And keeping newspapers in business serves the national interest. Would you rather have the local Assembly meeting covered by six accredited reporters and maybe four or five experienced bloggers, or would you want it overrun by 50 or more bloggers, half of whom might have a personal ideological axe to grind?

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