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Crisis? What crisis? Study of 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 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.

The new book 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 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. The comparative study examines whether and where the news industry is in a crisis. 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'. Levy and Nielsen point out in their summary that the internet offers new opportunities as well as challenges for journalists. They conclude that: 'The supposed crisis is far from universal and the outcomes of current transformations far from certain.'

Looking to the future of the news industry, they say: 'There is still time for the business of journalism to reinvent itself and move into the 21st century, provided media managers, professional journalists, and policy-makers and the citizens they represent are willing to learn from different developments around the world.'

Dr David Levy said: ‘We have drawn on a wide array of data from academics, policymakers and journalists in Europe, the United States, Brazil, and India to compare the challenges and the opportunities for the news industry in countries across the world.. 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.'

Contributors

The book contains contributions by Alice Antheaume (Sciences Po, Paris), Michael Brüggemann (University of Zürich), Frank Esser (University of Zürich), David A. L. Levy (University of Oxford), John Lloyd (University of Oxford), Rasmus Kleis Nielsen (University of Oxford), Hannu Nieminen (University of Helsinki), Robert G. Picard (University of Oxford), Mauro Porto (Tulane University), Michael Schudson (Columbia University), Daya Kishan Thussu (University of Westminster), and Sacha Wunsch-Vincent (World Intellectual Property Organisation and formerly OECD).

Download a podcast from journalism.co.uk of interviews with some of the contributors and panellists at the launch event here