To download the complete version of "The Story So Far: What We Know About the Business of Digital Journalism," a new report on digital news economics from the Columbia University Graduate School of Journalism, click here.

Impact: Readers have access to far more information than they used to, almost always for free. But for publishers, the competition is nearly infinite, meaning much of the news has become a commodity, with pricing to match.

• Digital is where the users are heading. In the most recent study by the Pew Research Center for the People & the Press, 65 percent of people ages eighteen to twenty-nine get their news from the Internet—outpacing television for the first time and far exceeding the 21 percent in that age group who rely primarily on newspapers. Among people ages fifty to sixty-four, the Internet (34 percent) and newspapers (38 percent) are almost tied. The web’s growing popularity means the “network effect” can kick in. That is, as more people use news sites, those sites become more valuable to their users, especially as readers and viewers comment on—and contribute to—stories. Meanwhile, more usage is gravitating from computer screens to smartphones, tablets and other mobile devices. According to a January 2011 Pew study, 47 percent of American adults say they get at least some local news and information on their cellphone or tablet computer.

Impact: Digital platforms provide ways for audiences to build quickly with lower marketing costs than in traditional media. And the shift to mobile provides news organizations with more opportunities for targeted content and advertising. But increased audiences don’t always lead to proportional gains; in other words, more people may be viewing a site, but that doesn’t mean revenue increases to the same or greater degree. Witness a recent report by McClatchy Co., the third-largest newspaper firm in the U.S. The company said the number of local daily unique visitors to its websites grew by 17.3 percent in 2010, yet digital revenue rose only 2.4 percent for the year. And mobile ad sales have so far been less lucrative than those on Internet platforms. Chris Hendricks, vice president of interactive media for McClatchy, says that “seven percent of our traffic comes from mobile. The traffic is significant, the revenue is not.”

• Digital provides a means to innovate rapidly, determine audience size quickly, and wind down unsuccessful businesses with minimal expense. The substantial capital expenditures that used to be involved in starting a new media company are largely gone. A video service need not build tall antennae atop the highest hills in town, and print publishers can avoid capital-intensive investments in printing presses. The large staffs associated with getting information to readers—whether they’re camera crews or printing staffs—aren’t as necessary. It took Sports Illustrated at least ten years to get its formula right and become profitable; it took Huffington Post less than six years to go from an idea to a valuation of $315 million in its 2011 sale to AOL.

Impact: The development time from idea to market is shortened, greatly increasing efficient use of a firm’s resources. But because competitors can imitate or adapt more quickly, it is difficult to cash in on innovations. The shorter cycles can lessen the length of time that innovations remain unique, relevant, and valuable.

• Digital platforms extend the lifespan of journalism. In the analog era, news stories were as ephemeral as fruit flies. An article was prominent for a day, then available only on a library’s microfiche; a video would be broadcast to millions on the nightly news, then it would be sent to a network’s vault. Journalism now can be freely accessible for as long as a publisher wills it to be. In the words of one programmer, “There is no such thing as ‘yesterday’s news.’”

Impact: News organizations can make money from their archives as part of a subscription or pay-per-view service, or as part of a scheme to provide more content and build traffic and ad revenue. But as increasing amounts of content stream into archives, consumers may have greater difficulty finding what they want.

II. Content and Distribution: A Fundamental Change

Bill Grueskin, Ava Seave, and Lucas Graves are the co-authors of "The Story so Far: What We Know About the Business of Digital Journalism." Grueskin is dean of academic affairs at the Columbia University Graduate School of Journalism. Seave is a principal of Quantum Media, a NYC-based consulting firm. Graves is a PhD candidate in communications at Columbia University. For further biographical details, click here.