The Pew Research Center's annual Project for Excellence in Journalism "State of the Media" report reads like a grim epitaph of traditional media.
National and local TV, newspapers and magazines have endured painful staff cuts as ad revenues continue to evaporate. And while new voices proliferate online and on TV, resources devoted to traditional newsgathering continues to shrink.
Only cable television did not suffer the hemorrhaging evident at legacy media companies. And even there, CNN and MSNBC remained basically flat (rising 1%, according to estimates provided by SNL Kagan), while Fox News profits rose 19%.
At the broadcast networks, PEJ estimates that half of NBC's revenue is now derived from its cable news operation. CNBC (which commands some of the highest CPM rates on cable thanks to its extremely affluent audience) is the biggest contributor to the bottom line. PEJ estimates that CBS News did not turn a profit in 2009, while ABC News only managed to do so with cutbacks.
CBS News announced cutbacks, about 7% of its news operation, earlier this year, while ABC News is in the midst of very deep cuts, which could trim as much as 25% of its 1,400 person staff.
As broadcast news divisions are attempting to navigate newsgathering in the face of ever-declining television ad revenue, one thing has become abundantly clear: online ad revenue, says the PEJ study, "will never sustain the industry."
For all of the talk of citizen journalism and the rise of online only media (including Politico and The Daily Beast), the long-term prospects of these organizations remains in question.
PEJ's survey of online economics finds that 79% of online news consumers say they "rarely if ever" click on an online ad. News organizations have signaled an intention to experiment with pay walls as a secondary revenue stream. News Corp.-owned Wall Street Journal has always been behind a pay wall, and Chairman Rupert Murdoch has signaled his intention to put all of the company's content behind pay walls. And The New York Times has said it is looking at instituting some form of pay wall by 2011.
But a survey produced by the Pew Internet and American Life Project finds that online news consumers are not only indiscriminate about where they get their news but are largely unwilling to pay for it. Only 35% of Americans have a "favorite" online news destination, and among these users, "only 19% said they would continue to visit if that site put up a pay-wall."
And for all of the expansion of online news and opinion, says PEJ, this space is still dependent on legacy media for the overwhelming majority of its content--either as aggregated material on sites such as The Huffington Post, or as the basis for original commentary. According to PEJ's analysis of more than a million blogs and social media site, "80% of the links are to U.S. legacy media."