Pew: US newspapers still struggling despite aggressive digital strategy

The grim news for newspapers: digital is doing little to rescue them from their deepening woes. Reeling from weak circulation and ad revenue, the traditional newspaper world faces an ugly picture while social media and tech firms benefit from the shift to digital, a Pew Research Centre study released on Wednesday found. Average weekday newspaper circulation -- print and digital combined -- fell 7% in 2015, the greatest decline since 2010, Pew's annual State of the News Media report found.

// Source: Pew Research Centre

Although digital circulation gained a slight 2%, that amounted to just 22% of total circulation, and online subscriptions have done little for the overall revenue picture, Pew said. It found that total 2015 advertising revenue among publicly traded newspaper companies declined almost 8%, reflecting weakness in digital as well as print.

To make matters worse, newspaper newsroom employment fell 10% last year, the biggest drop since 2009, the researchers found. "Newspapers had a near recession-level year," AFP reports quoting Jesse Holcomb, a Pew researcher.

Tech firms reap gains

Major tech companies are reaping most of the revenues from online news, Pew found. "There is money being made on the web, but news organisations have not been the primary beneficiaries," the report said. Total digital advertising spending grew 20% last year to around $60bn, a higher growth rate than in 2013 and 2014, Pew said.

// Source: Pew Research Centre

"But compared with a year ago, even more of the digital ad revenue pie – 65% - is now swallowed up by just five tech companies," the report said, naming Facebook, Google, Microsoft, Yahoo and Twitter. "Increasingly, the data suggest that the impact these technology companies are having on the business of journalism goes far beyond the financial side to the very core elements of the news industry itself." Facebook took in some 30% of digital display ad revenue last year, or $8bn, according to Pew. Google accounted for 16%.

// Source: Pew Research Centre

Part of the reason for the revenue shift is due to how people discover news -- often by happenstance on social networks or by searching online -- the report opined. Since the Newspaper Association of America stopped reporting revenue figures for the newspaper industry as a whole in 2013, Pew tracked data from the seven publicly traded newspaper groups, which owned some 300 dailies at the end of last year. The data accurately tracks the sector even though a majority of newspapers are privately held, the research firm said.

// Source: Pew Research Centre

Mixed news

The picture was more nuanced elsewhere in the media industry. Some digital news startups appear to be generating revenues and profits, although data has been spotty, according to the report.

Source: Pew Research Centre

Those digital news operators include BuzzFeed, Vox Media and Business Insider. Although several have raised capital from investors, as private firms they are not required to report financial results. In television, network broadcasters increased ad revenue by 6% in the evening and 14% in the morning. Cable news channels were projected to increase their revenues by 10 percent and experience profit gains, Pew said. It also found radio remains an important news source for around 25% of Americans, and is getting some help from digital technologies and podcasts. But overall radio revenues were flat in 2015, with a 3% decline in traditional AM/FM spot advertising offset by gains in digital and off-air advertising, the report said.

Source: Pew Research Centre