What’s happening to our media?

I’m in the process of writing up a report that presents the main findings from the research project on the changing business of journalism and its implications for democracy that I’ve been involved in over the last two years.

In the project, we try to identify the key “big trends” in the media in a range of different democracies (Brazil, Finland, France, Germany, India, Italy, the United Kingdom, and the United States) over the first decade of the twenty-first century.

Given such a spread of countries, widely different in too many ways to mention, there is obviously not one thing, or even a few things, that have happened to media and democracy in all of them.

Nonetheless, I’m trying to summarize the main points—below is a condensed passage from the concluding part of the draft report. Any and all comments on its most welcome, here or by email.

Most fundamentally, the last decade has involved a continued expansion of the number of options available to audiences and advertisers. This expansion originates in political, economic, and technological developments that gathered pace in the 1980s and 1990s with deregulation of the media sector in many countries, the growth of multi-channel television, the launch of an increasing number of free newspapers in many countries, and the spread of first-generation internet access via dial-up modems. It has been vastly accelerated by the spread of digital television and broadband internet in the 2000s.

The expansion of options has lead to an erosion of the everyday audience of most individual media outlets across most platforms, pressuring sales and advertising revenues for commercial providers, especially in mature markets with limited growth—in some cases to an extent that has jeopardized sustainability or forced severe cost-cutting. Few significant newspapers or broadcasters have actually closed, but most are under pressure. One the one hand, media companies have responded by adding more and more outlets to their expanding portfolios—at the very least adding a website and mobile services to whatever print title or broadcast channel they have historically been based around. On the other hand, this move towards more and more integrated and convergent media companies has been accompanied by layoffs, demands for increased productivity, and internal restructurings. (The booming Indian media market, where industry revenues are growing at double-digit rates annually, has seen much more of the former than the latter, though a recession will almost certainly result in retrenchment and consolidation.)

While a handful of infrastructural intermediaries in the telecommunications, pay television, search engine, and social media sectors have built positions that allow them to exercise market power and generate considerable profits, most content-based media companies face increased competition. In their attempts to remain distinct and relevant to audiences they are under external pressure from a growing number of alternatives appealing to the same users and under internal pressure in cases where cost-cutting threatens investments in quality content.

National newspapers that in the 1990s primarily competed with each other today face competition from both freesheets, broadcasters, and online services. The terrestrial television channels that ruled the airwaves twenty years ago are now up against a growing number of digitally transmitted free-to-air channels as well as premium pay channels and audiovisual services streamed over the internet. Legacy media websites and internet portals that dominated online news provision ten years ago are under increasing pressure from a growing number of aggregators and other new alternatives. As when radio disrupted the media sector in the 1920s and 1930s and television did the same in the 1950s and 1960s, the introduction and spread of a new media platform and the emergence of a multitude of new entrants all catering to the same finite number of audiences and advertisers have had knock-on consequences for legacy media, forcing incumbents to adjust their existing operations and take a stance on how to position themselves vis-à-vis the new medium.

This fundamental strategic challenge is the same across the world, but differences in conditions on the ground means that the tactics and outcomes vary in significant ways.

…

Amongst affluent democracies, the development is most dramatic in the United States, where all major news providers, with the partial exception of local television stations and a few cable channels, have lost revenues, seen their profit margin shrink or disappear, and have cut their investment in journalism. In much of Europe, public service providers face strategic challenges associated with the expansion of choice and the intensified competition for audiences, but their revenue models remain fundamentally solid. In Northern Europe, including Finland and Germany, commercial legacy media companies coming out of both print and broadcasting have so far managed to hold their own despite the spread of multi-channel digital television and high levels of broadband penetration. In Southern Europe, broadcasters have also held their own while many newspaper companies are struggling as challenges associated with the rise of the internet threaten their already weak commercial foundations, forcing some to rely on cross-subsidies from non-media businesses or financial support from their owners. In Brazil and India, large parts of the media sector are booming, but the revenues are not necessarily invested in quality content.

In the absence of dramatic change in media use, media markets, or media policy, and assuming no new game-changing technologies are waiting in the wings, media systems in affluent democracies are likely to see (a) a continued erosion of most media audiences and an increasing number of only partially overlapping niche audiences, (b) the continued decline of a newspaper industry that has in some cases enjoyed a few decades of monopoly-powered profitability but has been on the retreat overall in many countries for longer (as newspapers, for all their trouble, has been the main underwriters of professionally produced news journalism this has direct consequences for the number of reporters employed), (c) a continually growing gulf, driven in part by people’s preferences, in part by niche-oriented marketing logics, and in part by competition between outlets keen to differentiate their products from the competition, between the few who will in all likelihood be more informed than ever before, and the many who will receive, seek out, and find less and less news produced for them, especially if they belong to groups not considered attractive by advertisers. We are still at the beginning of the shake-out that will follow.

The full report will be published in October–stay peeled.