In 2011, most sectors of the news media managed to stop the audience losses they suffered a year earlier, though for some the gain was minimal. News websites saw the greatest growth, while print audiences stood out for their continued decline, which nearly matched the previous year’s 5% drop.
Source: Nielsen Media Research, the Audit Bureau of Circulation and Arbitron1
Digital: No matter the device, digital news consumption continued upward in 2011. Monthly unique audience to the top news sites was up 17%, a similar increase from 2009 to 2010, according to Nielsen Online.
Even under duress, advertising remains by far the most critical revenue stream for the U.S. news media as a whole.
Advertising ShareMore than two-thirds (69%) of all domestic news revenue is derived from advertising. That amounts to roughly $43 billion of the $63 billion accounted for in this report, according to the most recent annual figures.2
Legacy media, which for much of the 20th century were the de facto way for advertisers to reach consumers, still command the majority of ad dollars.
Daily newspaper advertising—print and digital combined—represents more than half (58%) of all the known advertising revenue tied to journalism, about $25.2 billion according to the Newspaper Association of America (2012 figures).3 Still, the total is only about half of what it was in 2005, when advertising dollars peaked for the newspaper industry at $49 billion (and 82% of total newspaper revenue).
How much advertising revenue is coming from the many digital news startups and entrepreneurial journalism initiatives that have emerged in recent years? This collection of sites—call them the “for-profit digital natives”—are not counted by trade associations as TV stations are, audited as newspapers are, or required to submit 990 government tax forms as public radio stations are. Given the range of operations and models—from high-traffic sites like The Huffington Post to local startups like The Batavian (Genesee County, N.Y.)—there is no simple way to arrange these digitally native news operations into an exhaustive category. The fact that many of these digital brands are private companies that do not typically release their finances publicly adds another layer of complexity. Nevertheless, the available data and deeper inquiry by Pew Research provide some clues.
A number of for-profit digital news operations, whose businesses are based largely on advertising, have released their own internal overall revenue figures—$175 million at Vice Media, upwards of $20 million at Business Insider, $10 million to $15 million at Mashable. For other digital news properties, market research firms and financial journalists have estimated annual intake—$100 million at The Huffington Post, $60 million at BuzzFeed, $15 million to $20 million at Gawker, and so on.8 Other attempts have been made to assess the revenues generated by the much longer tail of small, local and hyperlocal digital news outlets. The most in-depth attempt to date—a survey by journalist Michele McLellan—found that among 44 such sites (excluding nonprofits), 2013 revenues amounted to about a combined $5 million.
All told, analysts identified roughly $500 million in annual ad revenue for these for-profit digital news outlets.9 The actual intake is almost certainly higher than that, because there are many digital news businesses for which even estimates are unavailable. But even if that figure were doubled, revenue derived from this sector would not amount to any more than 1% to 2% of all news ad revenue accounted for in the U.S. media system. While advertising accounted for most of the revenue identified for this sector, some digital news operations are moving aggressively into other revenue opportunities, such as events and premium subscriptions, described in further detail below. And others have benefited from an influx of venture capital, subsidies from other products within the company and direct owner investment.