“The News Industry Is No Longer In Control Of Its Destiny”

And other findings of the Pew State of the Media Report

Today the Pew Research Center for Excellence in Journalism released its annual “State of the Media” report, and it’s a mixed bag of good and bad news. According to the report, there are signs that the industry is beginning to recover “after two dreadful years”: hiring has picked up, as has revenue, and layoffs have slowed down somewhat.

At the same time, though, there is a nagging structural problem that only appears to be getting worse. As news organizations increasingly—and inevitably—come to depend on partnerships with third-party companies to stretch their newsrooms’ technological capacity, they also, unfortunately, lose control of vital audience data.

The report mentions social networks like Facebook and news aggregators like Google, upon which many news outlets depend to expand their readership and grow traffic. But the harshest language seems to be reserved for Apple, which, when hosting a news organization’s app on the iPhone or iPad, both keeps 30 percent of the revenue from the sale and also does not share the data about these sales. An excerpt from the report:

That data may be the most important commodity of all. In a media world where consumers decide what news they want to get and how they want to get it, the future will belong to those who understand the public’s changing behavior and can target content and advertising to snugly fit the interests of each user. That knowledge—and the expertise in gathering it—increasingly resides with technology companies outside journalism.

In the 20th century, the news media thrived by being the intermediary others needed to reach customers. In the 21st, increasingly there is a new intermediary: Software programmers, content aggregators and device makers control access to the public. The news industry, late to adapt and culturally more tied to content creation than engineering, finds itself more a follower than leader shaping its business.

There is evidence, however, that this structure won’t last. Outsourcing the distribution duties and the technical know-how seems unavoidable in this age, but news organizations probably won’t tolerate being in the dark about their own customers:

News companies are trying to push back. One new effort involves online publishers starting their own ad exchanges, rather than having middlemen to do it for them. NBC, CBS and Forbes are among those launching their own, tired of sharing revenue and having third parties take their audience data.

Pew also highlights some significant “firsts” across the online news universe, indicating that the move from print to web has reached an important tipping point. They are:

1) “Original reporting job hires at major online only news sites for the first time matched or exceeded the job losses in newspapers.”

2) “For the first time, more people said they got news from the web than newspapers.”

3) “When the final tally is in, online ad revenue in 2010 is projected to surpass print newspaper ad revenue for the first time.”

A big caveat to that last point, though: although web audience and revenue both surpassed newspaper audience and revenue for the first time ever, that didn’t necessarily help news websites: “by far the largest share of that online ad revenue goes to non-news sources, particularly to aggregators.”

Pew’s entire report is available here, and is chock full of useful statistics about readers’ habits, circulation numbers, revenue, and hiring trends. CJR previously wrote about the 2010 State of the Media report, Pew’s interactive feature about this past year of news, and its warning about the “Twitter echo chamber” —a warning that it probably wouldn’t hurt to revisit every few months or so, knowing us tweet-happy journos.

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Lauren Kirchner is a freelance writer covering digital security for CJR. Find her on Twitter at @lkirchner