More people said they got their news from the Web than a physical newspaper last year — the first time in history this has happened, according to an annual report on the news media.
The Internet now trails only television among U.S. adults as a destination for news, and the trend line shows the gap closing, the study released Monday by the Pew Research Center said.
The report predicted that 2010 might also be the year when online ad revenue surpassed print newspaper ad revenue for the first time. The final tally is expected this spring. One of the challenges facing newspapers is that the largest share of online ad revenue is going to non-news sources, particularly to aggregators, the Washington think tank said.
Overall, nearly every sector of the U.S. news industry saw revenue growth in 2010, except for newspapers.
After two dreadful years, most sectors of the industry saw revenue begin to recover, the study said. With some notable exceptions, cutbacks in newsrooms eased. And some experiments with new revenue models began to show signs of blossoming.
Among the major news industry sectors, only newspapers suffered continued revenue declines last year — an unmistakable sign that the structural economic problems facing newspapers are more severe than those of other media, Pew said.
"When the final tallies are in, we estimate 1,000 to 1,500 more newsroom jobs will have been lost — meaning newspaper newsrooms are 30% smaller than in 2000," the study said.
The reason newspapers missed out on making as much money on their own content as aggregators did last year has to do with a lack of embracing new media, the study found.
In the past, much of the experimentation in new journalism occurred locally, often financed by charitable grants, usually at small scale. Larger national online-only news organizations focused more on aggregation than original reporting.
In 2010, however, some of the biggest new media institutions began to develop original newsgathering in a significant way. Yahoo Inc. added several dozen reporters across news, sports and finance. AOL Inc. had 900 journalists, 500 of them at its local Patch news operation.
By the end of 2011, Bloomberg expects to have 150 journalists and analysts for its new Washington operation, Bloomberg Government. News Corp. has hired from 100 to 150 people, depending on the press reports, for its new tablet newspaper, the Daily, although not all may be journalists.
"Together these hires come close to matching the jobs that we estimate were lost in newspapers in 2010, the first time we have seen this kind of substitution," the study said.
Traditional newsrooms, meanwhile, are different places from what they were before the recession. They are smaller, their aspirations have narrowed, and their journalists are stretched thinner, the study found. But they are also more adaptive, younger and more engaged in multimedia presentation, aggregation, blogging and user content. In some ways new media and old, slowly and sometimes grudgingly, are coming to resemble each other, the study said.
Less progress has been made in charging for news than many in the journalism industry had predicted, according to the report.
The leading study on the subject finds that so far only about three dozen newspapers have moved to some kind of paid content on their websites. Of those, only 1% of users opted to pay. And some papers that moved large portions of content to subscription gave up the effort.
A new survey released for this report suggests that under certain circumstances the prospects for charging for content could improve. If their local newspaper would otherwise perish, 23% of Americans said they would pay $5 a month for an online version. To date, however, even among early adopters, only 10% of those who have downloaded local news apps paid for them (this doesn't include apps for non-local news or other content).
At the moment, the only news producers successfully charging for most of their content online are those selling financial information to elite audiences. The Financial Times is one, the Wall Street Journal is another, and Bloomberg is a third. All are operations aimed at professional audiences, which means they are not a model that will work for general news.