By David Levy and Damian Radcliffe:
Digital technology has dramatically reshaped the news and media industries in the past decade. We’ve left behind a world where established news brands could rely on reaching large audiences and hence secure advertising revenues. Now there is huge uncertainty about business models, even as digital gives consumers more convenient access to news than ever before. The emergence of new players, including BuzzFeed and The Huffington Post, coupled with the growth of social networking, the introduction of smartphones and the evolution of online advertising, have contributed to a media landscape that is changing at considerable speed.
We’ve been tracking the ways in which news habits online have been changing since 2012, when we launched our first survey from the Reuters Institute for the Study of Journalism at the University of Oxford. Since then the Digital News Report (DNR) has grown to become the largest international survey on digital news use in the world. But the aim remains the same – to understand the radical changes the news industry is undergoing from the perspective of users, and to track the ways these are developing in different countries.
Our latest research polled more than 50,000 news consumers in 26 nations and is summed up in our fifth Digital News Report. One caveat: since this is an online survey it will tend to underestimate the behavior of people who are not online. These nations include 20 within Europe, together with the U.S., Japan, Brazil, South Korea, Australia and Canada. They mostly benefit from high incomes, widespread internet adoption and share many linguistic and cultural characteristics.
Nonetheless, we found much variance in news habits and attitudes across the globe. Country to country, there were discernible differences in the willingness to pay for online news, as well as the popularity and trust placed in certain news outlets. We discovered major contrasts even among countries as seemingly similar as the U.S. and the U.K. Despite radical change, the impact of digital disruption is strongly influenced by each country’s media heritage.
Social networks’ growing role
Data from comScore recently revealed that, in the U.S., social media accounts for 20% of total time spent online. It follows that 46 percent of our DNR American sample named social media such as Facebook or Twitter as a source of news; that’s almost twice the number who did in 2013. In the U.K., this figure is slightly lower (35 percent). Meanwhile, 14 percent in the U.S. and 8 percent in the U.K. cite social media as their main source of news.
These trends are moving fastest among younger audiences. Globally, for all age groups under 45, online news is now ranked as more important than television news. Among 18-to-24-year-olds, social media (28 percent) rates above TV (24 percent).
Across the sample, Facebook is the leading social network for news and non-news consumption: 44 percent of all respondents used it for news in the week prior to the survey. YouTube (19 percent) and Twitter (10 percent) trail behind, highlighting why discussions about Facebook’s algorithms and news selection are so important. Almost half of our sample get at least some of their news from the social media giant.
From journalism to content
The trend toward finding and consuming news through social networks rather than coming directly to their sites leaves many publishers grappling with what it all means for their business. In particular, they need to determine if they can work with these tech giants in a manner that enables them to get paid for their content and to access increasingly valuable data about users’ patterns of news consumption.
Some, such as The Washington Post, have gone “all in” with several Silicon Valley-led initiatives; for example, Facebook’s Instant Articles hosts publishers’ content within Facebook to increase the speed of access. Other publishers are adopting a more cautious approach. Either way, the battle for revenues, recognition and eyeballs is very real.
Only around half of U.S. news audiences – and just over a third in the U.K. – say they even notice the brand responsible for content they’re reading or viewing on social media or an aggregator such as Apple News, Flipboard or SmartNews.
Starting the day with current affairs
Reuters Institute for the Study of Journalism, CC BY-ND
These online services are also reshaping our morning news routines. Few people now first access the news via a physical paper (a mere 6 percent in the U.S., 8 percent in the U.K.). Instead, online services are the first source of daily news for 39 percent of our sample in the U.S. – ahead of TV (at 36 percent) – and for 31 percent in the U.K. (where TV stands at 32 percent). No wonder legacy media that didn’t join the digital revolution are hurting or worse.
Interestingly, the radio news habit remains strong in the U.K. Nearly a quarter of respondents (24 percent) get their first news of the day via that medium, compared to just 12 percent in the U.S. Countries such as France (30 percent) or Ireland (39 percent) show an even greater reliance on radio in the morning. This reflects different traditions and the fact that, in some countries, key radio news shows have a longstanding reputation and can still set the news agenda for the day.
Of those using a smartphone to access the news first thing in the morning, nearly half in the U.S. (48 percent) go to social media as their first source, compared to only one third (33 percent) in the U.K. U.K. smartphone users are more than twice as likely as their U.S. counterparts to use their smartphone first thing to go direct to a news website or news app (U.K. 48 percent versus U.S. 23 percent).
Making it pay
For most players, the economics of the news business is challenging. Audiences have gotten used to consuming online news for free. Turning the tanker around is no easy task.
Publishers’ digital advertising revenues have been hit by the dominance of Google and Facebook (76 percent of the increase in internet advertising monies in the U.S.), the growth in news consumption via smartphones and the rise of ad-blockers.
Ad-blocking tools prevent desktop and mobile audiences from seeing digital ads. This may be great for consumers at the moment, but if ads go unseen, publishers can’t charge for them. As a result, some publishers are striking back, refusing free access to content unless ad-blockers are turned off, or an exception is given to their site. Ad blockers are still relatively new, but the numbers of online news consumers using them in the U.S. (24 percent) and U.K. (21 percent) are already significant and likely to grow.
For publishers, apart from digital ads, other potential revenue sources – including subscriptions, one-off payments, memberships and sponsored content – remain fraught with difficulties. Less than half of respondents in the U.S. and the U.K. said they’re prepared to see sponsored content or native advertising on websites in exchange for free news.
Reuters Institute for the Study of Journalism, CC BY-ND
In the U.S., people reporting having paid for online news – either via subscription or a one-off payment – fell from 11 percent to 9 percent last year. The proportion paying for online news in the U.K. (7 percent) is among the lowest in the world.
But these figures tell only half a story. In the U.K., the median payment – at £82 (about US$115) a year – is the highest in the world (with the U.S. in third place at £62 [about $90]). These numbers are driven by the success of subscription packages offered by some publishers. In these two countries, there remains an audience willing to pay significant amounts for high quality news online. It’s not a solution for every organization but can work where content is unique or of distinctly high quality that’s valued by consumers.
Popularity and trust
Even though business models and news habits are changing, large audiences still trust traditional news brands – such as the BBC and CNN – when they’re looking for in-depth content and analysis. These major brands are also where many people turn for breaking news.
In the U.S., offline news consumption in TV, radio and print remains dominated by traditional outlets such as local TV and Fox News. Online news comes from digital-born companies such as Yahoo!, alongside a strong presence from the websites of established TV news networks such as CNN, Fox News and local television stations.
In the U.K., just looking at performance online, long-established national news brands that built their reputations in print or broadcast are relatively much stronger. The BBC and mainstream TV news channels (ITV and Sky) lead, with the websites of national newspapers also enjoying some traction – and often far greater reach than in print. (More than three times as many of our respondents said they read The Guardian online last week as said they read it in print.)
That said, digital brands are growing in popularity. The Huffington Post is the second-most-consumed online news source in the U.S. and the third most popular in the U.K. Generally speaking, though, online-only services tend to be used as secondary sources or for softer news.
News remains as popular as ever. Distinctive journalism continues to be valued, even if audiences aren’t necessarily willing to pay for it. New brands are having an impact, but they’re not replacing older outlets just yet. Given our report’s findings, the question of how we pay for high-quality – yet costly – journalism has never been more urgent.