Evolution of News and the Internet

The Organisation for Economic Co-operation and Development (OECD) has released a new report on The Evolution of News and the Internet. I was involved in advising on Australian developments, and the report provides a valuable overview of recent trends in the newspaper industry worldwide.

It can be accessed here.

Some of the key findings are:

* After very profitable years, newspaper publishers in most OECD countries face increased competition (free dailies, Internet, multiple TV and radio sources) and often declining advertising revenues, titles and circulation as well as declining readership. The economic crisis has amplified this downward development. About 20 out of 30 OECD countries face declining readership, with significant decreases in some OECD countries.

* The share of advertising going to print newspapers has been declining for the last decade in most OECD countries, and the newspaper advertising market has more recently experienced large falls in offline and online advertising growth. !On the cost side, costs unrelated to editorial work such as production, maintenance, administration, promotion and advertising, and distribution dominate newspaper costs. These large fixed costs make newspaper organisations more vulnerable to the downturns and less agile in reacting to the online news environment.

* “Reading news online” is an increasingly important Internet activity. In some OECD countries, more than half of the population read newspapers online (up to 77 per cent in Korea) but at the minimum 20 per cent of the population read newspapers online. The willingness to pay for online news is low but increasing. In many OECD countries, TV and newspapers are still the most important sources of news but this is shifting with newspapers losing ground more quickly to the Internet than TV. In countries such as Korea the Internet has already overtaken other forms of news.

* In many Western OECD countries the Internet web pages of broadcasters and online newspaper sites play a large role in attracting news-related visits. More recently newspaper websites have seen strong growth in their own pages, with large newspapers reporting several million of unique visitors to their pages per month, including increasingly readers from abroad, a radical shift for newspapers.

* The impacts of the changing media landscape on news are pulling in two opposite directions. One extreme is that online and other new forms of more decentralised news will liberate readers from partisan news monopolies which have tended to become more concentrated and to dominate the production and access to news. The other extreme is that the demise of the traditional news media is with us (partially caused by the rise of the Internet), and with it an important foundation for democratic societies is at risk.