The Business of Digital Journalism and Why it Matters for Democracy

Many commercial legacy media organizations around the Western world are having a hard time these days, still hit by the impact of the recession on their revenues, and struggling with the different structural adjustments they will have to make as they move from the relatively stable and platform-specific media markets of the mid-twentieth century to the increasingly convergent and overlapping media environment of the 21st century. Newspapers in particular, from national flagship titles over regional powerhouses to local weeklies, are often in trouble.

Changes in the business of journalism have potentially profound consequences for our democracies, because private media like newspapers have employed many of the journalists who inform us all (and occasionally misinforms us) about what goes on in the corridors of power—in politics, in business, in civil society.

And commercial legacy media are not always doing so well—though many television channels are roaring back as the advertising market picks up, pay television continues to grow, and some so-called “pure player” (internet-only news organizations) manage to make ends meet or even turn a profit, newspapers, the source of the majority of news coverage of public affairs in many Western countries, are often suffering.

In the U.S., for example, the newspaper industry has lost 30% of its revenue, 15% of its circulation, and laid off 25% of its journalistic workforce from 2007 to 2009. These are dramatic numbers, and this is not just dry business news–it is also about politics and democracy. The D.C. press corps covering the Federal Government is shrinking, journalists are increasingly rare sights at State Capitols around the country, foreign bureaus are closing all over the world. There are fewer independent, professional news reporters telling the American population about the world around them today than there were five years ago, fewer journalists trying to hold people in positions of power to account, fewer working to keep people informed about events of public importance. That is, to put it bluntly, a problem.

It is also why developments in the business of digital journalism matters for democracy, especially in countries like the U.S., where private sector media provide by far the largest share of news coverage of public affairs, because of the low levels of funding for public media—as commercial media organizations in many countries continue to lose revenue and lay off reporters because their legacy platforms (like print) grow less popular by the day, the future of the private media sector, an important part of our democratic systems, depends in part on its ability to find new business models and reinvent itself for a new century and new media world, online and elsewhere.

“The Story So Far”, an interesting new report by Bill Grueskin, Ava Seave, and Lucas Graves published by the Tow Center for Digital Journalism at the Columbia Journalism School, presents a great tour d’horizon of the business of online news in the U.S., and is an important contribution to our understanding of where the private news industry might be heading.  I’d warmly recommend reading it, it is well-written and wide-ranging, and deals with a whole host of important question facing the commercial media organizations that are such important parts of most national media systems and, despite their decline in recent years, continue to fund most accountability journalism around the world.

The subtitle of the report is “What We Know About the Business of Digital Journalism”, with the proviso inserted in the introduction, that the study is restricted “mostly to the U.S. market.” “Entirely” would be more precise here, and if I may criticize a report I think is a real contribution, I would say that is a problem, not only for the international reader, but also for people who want to understand the situation in the U.S.

I’ve written in a bit more detail elsewhere about just some of the important differences that exist (and this post builds on and overlaps somewhat with my earlier post), even within the Western world, between countries like the U.S., where the newspaper industry has suffered greatly in recent years, and then other countries like Germany or the Nordic Countries, where developments have been much less dramatic—though these countries have levels of internet penetration and use that are as high as or higher than in the U.S. The data we have from sources like the World Press Trends is incomplete, but compared to the brutal decline of the U.S. press outlined above, consider that the German newspaper industry lost only 1% of its revenue from 2007 to 2008, 4% of its circulation from 2007 to 2009, and laid off only 1% of its journalistic workforce from 2008 to 2009—and this during a serious recession.

The thing is that we know an awful lot more about developments in the business of journalism, digital and analogue, in the U.S. than anywhere else, and that much of the conversation around the future of journalism remains focused on what takes place in the states—in the U.S. because this is understandably the main concern and because most of those taking part in the conversation do not seem to know much about how things are done elsewhere, in other countries, because comparative conversations are all too often limited to “us vs. the U.S.” and rarely expanded into more meaningful cross-national discussions of countries with similar size markets, market structures, and historical legacies.

This lacuna is not Grueskin, Seave, and Graves’ fault, and it takes nothing away from the valuable work they have done in researching and writing this report. But the dearth of comparative analysis is constraining both intellectual attempts to understand what is going on, and arguably also the ability of industry people and policymakers to make informed decisions about how to react to current changes in the industry. As the great comparativist Seymore Martin Lipset wrote in his book on American exceptionalism, “to know only one country is to know no country”–a point I’ve reiterated elsewhere, and that my colleage David Levy and I have tried to begin to address with a book we edited last year.

We need to understand the changing business of journalism—both its digital and its analogue elements—to understand how our democracies are developing in the 21st century. The new Columbia report makes a big contribution to understanding the business of digital journalism in the U.S., but in many ways, the American experience is exceptional, and one should be careful in understanding developments elsewhere through this lens—hence the need for further comparative research into how our media are changing today and what the implications are for our democracies.

Photo: Marcel Germain

About Rasmus Kleis Nielsen

Dr Rasmus Kleis Nielsen is Research Fellow at the Reuters Institute for the Study of Journalism (University of Oxford) and an assistant professor of communications at Roskilde University (RUC) in Denmark. His research deals with political communication, the use of digital networked technologies by political campaigns, and the implications new information and communication technologies have for legacy news media organisations. Before coming to Oxford, he did his PhD in Communications at Columbia University, where he taught at the School of International and Public Affairs. In addition, he has a BA and an MA in Political Science from the University of Copenhagen and an MA in Political Theory from the University of Essex.
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