News producers are shifting their budgets away from traditional media and onto the internet, with a new report finding that with the exception of cable TV, ad budgets are eroding for offline media.
According to the
State of the News Media 2006, from Columbia University’s Graduate School of Journalism, newspaper revenue rose by between 1% and 2% in 2005, resulting from a 30% increase in revenue from adverts on newspapers’ online portals.
The report asserts that without this revenue newspaper revenue in 2005 would have been flat. The State of the News forecasts a gloomy future for offline press, with newspapers online sites expected to eat into revenue from print newspapers’ classified ad sections.
Despite the US newspaper industry reporting a 20% profit margin in 2006, Merrill Lynch attributes much of this profitability to deep cost cuts.
This downwards trend is also seen in evening news programmes on network TV, while cable TV’s news networks seem to be doing well moving into 2006.
Radio news also suffered at the hands of online in 2005, with a survey from Radio and Television News Directors Association (RTNDA) and Ball State University claiming that the number of programming directors reporting a profit for radio news programmes dropped to 20% in 2005, from 22.4% in 2004.
Online news is now seen as commonplace, and is increasingly being used as a mainstream information source. A survey earlier in the year by Merrill Brown for the Carnegie Corporation revealed that the US population is shifting to the internet as their primary source of news (see Internet Becoming Primary News Source In US).
The success of online newspapers is not being mirrored in the print world, with Initiative Media projecting the UK press market as a whole to remain static in 2006, with a downward trend in sales of national newspapers resulting in advertisers cutting adspend by 1.2% (see UK Adspend To Rise By 3.7% In 2006).
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