Tuesday, November 23, 2010

The Future Of The International News Industry

The internet is often held up as the main reason for declining newspaper sales and dwindling revenues. But an academic assessment of the news industry conducted in seven different countries shows that, contrary to popular belief, in many cases the internet is not the main challenge facing the business of journalism.

A new book, commissioned by the Reuters Institute for the Study of Journalism (RISJ) at the University of Oxford, finds that even within otherwise comparable, developed democracies with similarly high levels of internet use, there are massive differences in how the newspaper industry has fared in recent years. It explores a range of themes including: the differences in national media systems; the history of the financing of general news; technological developments changing the face of news businesses; and case studies of how media systems are changing in Germany, Finland, France, the UK, the United States, Brazil and India.

The study examines whether and where the news industry is crisis.
International newspapers
Credit: Ivan Martinez

It shows that the latest downturns in the industry often can be traced to a combination of a cyclical downturn in advertising revenues—driven by the global recession —and the fragile inherited business models common in some countries that rely more on advertising than on sales. For example, advertising revenues were down 10.4 per cent from 2007 to 2008 in the UK, and 6.3 per cent from 2007 to 2008 in the US.

Countries like the US, Germany, and Finland all have about the same proportion of internet users. However, the American newspaper industry, which has generated more than 80 per cent of its income from advertisements, is today in a much more serious crisis than its counterparts in Germany and Finland, where advertising typically constitutes about 50 per cent of total revenues.

The book The Changing Business of Journalism and its Implications for Democracy, edited by RISJ Director Dr David Levy and Research Fellow Dr Rasmus Kleis Nielsen, examines recent developments in the news media, including the impact of the internet as well as business and policy responses to recent trends.

It demonstrates that variations in audience demand, market structure and media regulation each play an important part in the general health of the news industry in each country, even as the internet continues its rapid rise across all the countries studied.

In their summary, Levy and Nielsen argue that the impact of the recession and the dangers that accompany a heavy dependence on advertising is illustrated perhaps most forcefully by countries like the US and the UK (particularly in local media), where the private media sector has struggled in recent years. By contrast, countries like Germany and Finland with strong, state-funded public service media ‘have seen much more stable developments in the business of journalism’.

Dr David Levy said: ‘The message seems to be that the changing business of journalism does not necessarily mean doom and gloom. However, it is clear that policy makers will in future need to think about the widely different variations in each country – even when confronted with comparable challenges. National policy makers also need to look beyond their traditional policy toolkits and critically assimilate lessons learnt abroad and see how they can be applied to their own set of circumstances rather than just slavishly copy others.’

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