Trends in News Revenue: The view from 30,000 feet (with a detour)

Jesse Holcomb Senior Researcher, Pew Research Center @jesseholcomb │pewresearch.org/journalism

April 9, 2014 2 www.pewresearch.org

“Tell the truth and trust the people.” –Joseph N. Pew Jr.

April 9, 2014 3 www.pewresearch.org

Advertising still dominates

•  Nearly two-thirds of total news revenue

•  Mostly print ($25 billion from daily newspapers)

•  $13 billion from TV news

April 9, 2014 4 www.pewresearch.org

But things have changed •  Total news revenue in 2006:

$95 billion •  Today: $63-$65 billion

•  Audience and non-traditional revenue has grown as a share of the total

April 9, 2014 5 www.pewresearch.org

Growth in audience revenue

•  Newspaper circulation revenue up 5% in 2012 - First growth since 2003

•  Retransmission fees on the rise - Now make up 2/3 of CNN U.S. revenue

•  Public radio individual giving has grown - 2012 was second-biggest year since tracking began

April 9, 2014 6 www.pewresearch.org

Is it sustainable?

•  Pay TV Industry – Reached a peak - Shed 251k subscribers in 2013; first full-year loss

- Average expanded basic cable bill: $61 and rising

•  Newspapers – Shrinking base of paying audience - Total weekday newspaper subs are flat at 44 million (down from 55 million in 2004)

- Newspapers raising rates; more paywalls (500 & counting)

April 9, 2014 7 www.pewresearch.org

The nonprofit news landscape

April 9, 2014 8 www.pewresearch.org

Nonprofit vital signs •  Identified 172 digital

nonprofits around the U.S. (and 24 that closed between 2008-12)

•  Heavy focus on state, metro coverage

•  Just ¼ cover general interest; rest are investigative & topically focused

April 9, 2014 9 www.pewresearch.org

The survey

•  We secured participation from 93 outlets (54% response rate)

•  Asked 47 questions on the following:

- Hard financial data (revenues totals and revenue streams)

- Staffing, expenditures and knowledge about business

- Attitudes about the economic environment for a nonprofit

April 9, 2014 10 www.pewresearch.org

Nonprofit revenue streams

April 9, 2014 11 www.pewresearch.org

Biggest challenge for nonprofits

April 9, 2014 12 www.pewresearch.org

Revenue diversity: Critical, but grants still matter

“We have four employees, and I wish [reducing reliance on] foundation money was a

bigger problem for me.”

– Brian Wheeler, Charlottesville Tomorrow

April 9, 2014 13 www.pewresearch.org

Outside the nonprofit world •  $300 million in venture capital for

digital journalism in 2013

•  Understanding the web + growing a young audience =

- Buzzfeed’s $60 million (native advertising) - Vice Media’s $175 million (video)

•  5,000 new jobs created by nearly 500 digital journalism organizations

April 9, 2014 14 www.pewresearch.org

Hyperlocal also ad-focused Knight Foundation consultant Michele McLellan surveyed more than 40 for-profit, hyperlocal digital news organizations.

- Typical revenue: Just over $100k per year

- 9 out of 10 sites rely very heavily on advertising

- The rest: mix of donations, events, web services, merchandise

April 9, 2014 15 www.pewresearch.org

But digital ad market dominated by tech

April 9, 2014 16 www.pewresearch.org

Public news values

-  Communities of interest

-  Daily information needs

-  Civic and community engagement

Trends in News Revenue: The view from 30,000 feet (with a detour)

Jesse Holcomb Senior Researcher, Pew Research Center @jesseholcomb │pewresearch.org/journalism