Will money follow the eyeballs?


The news business is changing fast and television is among the industries trying to keep up with the changing demands of the American consumer. Because of that rapid change, the 5th Annual Report on the State of the New Media by the Project for Excellence in Journalism (PEJ) has a lot to say about financing journalism as well as where the field is heading. Television appears to be doing better than some of the other “old media” in dealing with the evolving news marketplace.

Network and local TV news audiences continued to decline in 2007.  But thanks to the power of TV advertising and the ability to add or shift timeslots, the industry is still robust, according to the study. It also said that cable news had a better year in 2007 than 2006, but may face a more long-term challenge. For the second year, there were no significant audience spikes from major events, which may reflect a slower news year but could also reflect a structural change in where audiences go for breaking news. Instead, prime-time programming, built around cable personalities, is what viewers were tuning into more substantially.

After a tumultuous 2006 with shakeups among anchor and executives, 2007 marked a return to more stability for network news. Yet efforts to expand the audience appear to have failed. In the evening, the total audience fell once again, continuing a trend that began with the advent of cable in the early 1980s. The morning news audience declined too, for the third year running.

Though it continues to be a robust business, local television news is nevertheless facing the challenges of new technology and new consumer lifestyles. In 2007, for the second consecutive year, local news ratings for evening news and late night news were down, and morning news just held steady.

“The future for local television seems to depend on how well it can capitalize on its existing strengths – content and reach – as it adapts to newer technologies,” said PEJ Director Tom Rosenstiel.

Among other findings:

* The three nightly network newscasts averaged 23.1 million viewers a night in 2007, a drop of 5%, or 1.2 million viewers, from 2006, according to data from Nielsen Media Research.

* For the three network news Web sites — MSNBC.com, ABCNews.com, and CBSNews.com – “partnership” was the key word in 2007.  All three formed alliances with other media companies in apparent attempts to drive revenue and attract an elusive younger audience.

* Cable news industry profits were projected to grow 20% pre-tax in 2007. Fox News led the way (30%). MSNBC was expected to grow 28%, after years of struggling to get into the black, while CNN & CNN Headline News were projected together to grow 10%.

* Among the international news channels that entered the U.S. market in 2006, only the BBC made headway, expanding its evening newscast to an hour. Al Jazeera International and France 24 saw no changes in their carriage in the U.S. market.

* More than half of local television news directors (53%) reported increasing their budgets in the latest year for which there are data, 2006. But that money is going to technology, not to people. News directors reported no significant change in salaries. Many of those dollars were put instead toward newer distribution platforms and getting ready for the mandated transition to digital in 2009.

* News contributes 42% to a station’s total revenue, according to local news directors surveyed in 2006. And the majority of them (56%) say their newsrooms are profitable.