What We Know About the Business of Digital Journalism

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The Story So Far: What We Know About the Business of Digital Journalismwithout skilled, independent journalists doing their work. That work can includereporting and editing in the traditional way, as well as aggregating informationfrom other sources, or sorting and presenting data to make it accessibleand understandable.We decided to restrict our studies mostly to the U.S. market. We found thedomestic news scene to be a rich and textured one, with plenty of complexityof its own, though we appreciate that a great deal of innovation is taking placebeyond U.S. borders.We define digital journalism broadly. While many publishers still see it as anonline phenomenon—that is, displaying content on a PC screen via the Internet—wehave included other platforms, including mobile phones and tablets.We found several challenges in preparing this study. First, while a great deal ofdata about digital ventures is available, much of it is unverifiable. Small startupsand other private companies have no legal reporting requirements, so some ofthe figures we cite here are taken with appreciation and on good faith. Further,digital revenue is still such a small sliver of the total for publicly traded companiesthat, when it is broken out at all, it is rarely displayed in such a way that revealshow much comes from a particular station or publication. And, it often isn’t clearhow much of a company’s stated digital revenue represents genuinely new incomeas opposed to legacy dollars reapportioned to online businesses.We sought to make this report accessible to newcomers and useful to thosewho have spent years in this field. We have tried to explain such terms as “CPM”(cost per thousand of views) and “impressions” (advertising spaces that appearon a digital page) in the text. And we have tried to be as rigorous as possible inexamining numbers that media companies provide when describing their digitalresults. We also consulted a number of secondary sources to provide backgroundand data unavailable elsewhere. These included important texts from the dawnof the digital age, such as Stewart Brand’s “The Media Lab,” 5 and more recentbooks, such as James Hamilton’s “All The News that’s Fit to Sell” 6 and “InformationRules” 7 by Carl Shapiro and Hal R. Varian. Of course, we also relied onmore current sources, particularly such sites as paidcontent.org, niemanlab.organd cjr.org.4
Columbia Journalism School | Tow Center for Digital JournalismBut the bulk of the research in this report is based on a series of interviews wedid in late 2010 and early 2011. We visited mainstream print and broadcast organizationswith rich histories and Pulitzers and duPonts lining the walls; we alsointerviewed the founders and editors of innovative new journalistic enterprises.In most cases, publishers and editors were open, candid and willing to be quotedon the record. In a few instances, we decided to trade confidentiality for access tointernal numbers or insights that would not otherwise be available.We recognize, finally, that digital journalism is such a dynamic field that someof the findings and conclusions we reach in May 2011 will be outdated withinmonths. That is what makes this subject so fertile for researchers and so humblingfor seers. And we conclude our study not with predictions but with recommendationsfor how news businesses large and small, new and old, can more effectivelymeet the challenges brought on by the digital transformation.1234567Apple’s split-adjusted stock price was about $10 (from Yahoo Finance, http://yhoo.it/ecaGAO), while Knight-Ridder’s was around $60 (Grain Market Research, http://bit.ly/dGf5F5). Apple had far more shares outstanding, leading to valuations that are within 1 percentof each other.Entire contents of “The Reconstruction of American Journalism” can be found on CJR.org,http://bit.ly/eP6Fjl“All the News That’s Fit to Subsidize,” op-ed from WSJ.com, Oct. 21, 2009.http://online.wsj.com/article/SB10001424052748704597704574486242417039358.htmlMedia commentator Alan Mutter addressed this in a post, “Non-profits can’t possibly save thenews,” Reflections of a Newsosaur, March 30, 2010, http://bit.ly/dMp86C. He calculated thenews media would need an endowment of $88 billion to produce enough revenue to supportcurrent models.Stewart Brand, The Media Lab (Penguin, 1988).James Hamilton, All the News that’s Fit to Sell (Princeton University Press, 2003).Carl Shapiro and Hal R. Varian, Information Rules (Harvard Business School Press, 1999).Introduction 5
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