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The Evolution of News and the Internet

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Author: 
Sacha Wunsch-Vincent
Affiliation: 

Organisation for Economic Co-operation and Development (OECD)

Publication Date

March 1, 2010

This study from the Working Party on the Information Economy (WPIE) of the Organisation for Economic Co-operation and Development (OECD), December 2009, provides an examination of the global newspaper publishing market and its evolution, particularly the development of online news and related challenges.

From the study's summary: "It [the study] assesses online news consumption patterns and new online news value networks, compared with the traditional newspaper value chain. It shows that the economics of news production and distribution has been radically altered, in particular in the context of the economic crisis which has accelerated structural changes. After very profitable years, newspaper publishers in most OECD countries face declining advertising revenues and significant reductions in titles and circulation....

Importantly, the study shows that many promising forms of news creation and distribution are being experimented with, some of which are empowered by increasing technological sophistication and resulting decentralised forms of content creation and broad-based participation ... More recently newspaper websites have seen strong growth in their own pages,... increasingly including readers from abroad, a radical shift from national patterns of established newspapers.

Paradoxically, while the print newspaper sector might be struggling, individuals are nonetheless confronted with an ever-increasing availability of diverse news. In terms of time spent, Internet users report a large increase in reading online newspapers, but most online readership is more ad hoc, irregular and sporadic than print newspaper readership used to be. The way news is consumed is also radically different on line. Online news readers get a variety of news from different sources, allowing them to mix and compile their own personalised information. However, it is unclear whether online readers obtain the same depth and breadth of news as traditional readers. Furthermore, a significant proportion of young people are not reading conventional news at all, or irregularly. The study also finds that currently no business and/or revenue sharing models have been found to finance in-depth independent news production. This raises questions as to the supply of high-quality journalism in the longer term....In the short term, some OECD countries have put emergency measures in place to financially help the newspaper industry. The question is being debated what potential roles government support might take in supporting a diverse and local press without putting its independence at stake...."

The study identifies a history of technologies affecting traditional print news readership: radio, television, and the internet. Competition, increased costs, and declining readership and revenues have caused slow growth of the news industry in some countries and a decline in others, though new newspaper titles are appearing outside of the OECD. Increases in online news development are being driven by new technologies, new business models, changing media use and expansion of access, new internet intermediaries, and social factors such as increased mobility and participation in online content creation. On the side of advances, the study lists the following: content management; mobile and wireless technologies; and new reader interfaces, enabling delivery to devices such as smart phones and e-readers. Willingness to pay for online news is low, but readership is as high as 77% of the population (Korea). The study points out that, though much OECD readership now mixes online and print news consumption, that practice may shift to more exclusive online reading as a younger age bracket moves into news consumption. "The question is how the different actors in the eco-system contribute to citizen engagement and to democracy generally, as each plays an important role in this regard. While there may not be many empirical studies of the impact of the Internet on the analytical skills of younger generations, including the consumption of news, this could be an interesting area for future research."

Characteristics of online news include the following:

  • A number of print papers now have online news sites also.
  • Visitors, called "traffic", to online sites have become an important metric for publishers.
  • Fewer news services actually gather news. "New actors are i) news organisations which only provide news online (so-called pure-players), ii) search engines which are often also a form of news aggregation, iii) Internet portals with news services, iv) social networks or communication services such as Twitter, v) other news aggregators, vi) providers focused on mobile news alone, vii) new online advertising groups, viii) hardware and services providers."
  • "In the online context, the production and dissemination of news is much more interactive and multi-directional, rather than linear. News is constantly updated, with journalists and other news contributors monitoring, distilling and repackaging information."
  • News wires, freelance journalists, photographers, or camera-teams, who do gather news, may cut out "middlemen" - publishers, print newspapers - and go directly to online services willing to pay.
  • "Device or network service providers, which did not play any role in the past, also control access to end consumers and have a large degree of bargaining power with content providers. Similarly to other digital content industries, new types of intermediaries and standards are emerging. Users may also increasingly become diffusers, commentators and creators of news."
  • Revenues online may be small, but there are few fixed costs. Direct reader subscriptions and pay-per-item attempts have not been widely successful. Some news sites are using donor or trustee support.

 

 

Part 3 of the study presents a stylised online news value chain (page 53), which depicts an increased role of users as contributors to news, and a large number of online news actors and intermediaries. It also illustrates the strategies and business models of different actors.

Issues involved include a debate on whether news sources are becoming more decentralised and/or less monopolised through online growth, or whether the demise of print sources affects the plurality of news sources as a foundation of democracy. Business and policy issues include: whether governments should give financial help to the print news industry; whether production of news should be left to market forces; policies for helping modernise news organisations; allowing non-profit or charity status to some news organisations; relaxing some of the regulations to stimulate the industry (tax reductions, relaxed competition, and media diversity); examining the role and impact of public broadcasting on news providers; internet-specific considerations about the status, role, and code of conduct of online news providers; and online policy challenges.

 

The study further examines selected policy issues, including: i) fostering newspaper readership; ii) freedom of information, the press, and expression; iii) journalism skills and working conditions; iv) quality, reliability, and governance of online news; v) the role of public sector broadcasting in a digital news environment; vi) media diversity and competition; vii) advertising and direct marketing rules; and viii) intellectual property rights and technical standards.

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