Gadget Users Hungrier for News, but Media Still Lags in Profit

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PEW Research Center

It’s a bittersweet tune for the news industry: Though Americans have a budding appetite for news, Silicon Valley is reaping the benefits of those cravings, according to a new report by the Pew Research Center’s Project for Excellence in Journalism.

The 2012 State of the News Media Report found that Americans are spending more time with news as smart phones and tablets become more ubiquitous. One in four Americans now consumes news through mobile devices, NPR reports, while comScore claims smart phones drove news site traffic up between 7% and 11% last year.

“Our analysis suggests that news is becoming a more important and pervasive part of peoples’ lives,” PEJ Director Tom Rosenstiel said in his findings. While desktop and laptop computers remain the primary source of obtaining digital news, mobile devices are causing Americans to consume more news and for longer periods of time. The report points out more consumers are using tablets and mobile devices to read news, and are seeking out content directly from news sites or applications — a boon for traditional news organizations looking to strengthen relationships with consumers.

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“But it remains unclear who will benefit economically from this growing appetite for news,” Rosenstiel added. That power lies with technology companies who are taking control of the digital ad revenue produced along with an influx of news consumption. Microsoft, Google, Facebook, AOL and Yahoo! generated 68% of digital ad revenue in 2011, the report finds. Tech giants are using their wealth of personal data for targeted ads, a trend the Pew Center said not enough news organizations are seeking out aggressively, and one that will continue to rapidly grow.

Though more news consumption is a bright spot for the industry, including long-form journalism, media sectors still reported a decline in revenue in 2011, the New York Times adds. Media critic Jeff Jarvis admonishes news organizations for lack of innovation with digital platforms. “I fear the iPad is a siren call to news organizations, seducing them into thinking they can maintain their old models and old controls, not just maintain but regain them,” he said.

But media companies are catching on to Silicon Valley’s stronghold on the industry, forging relations with tech companies to produce online content. Last year’s launch of the new Facebook platform created partnerships with the Guardian, the Wall Street Journal and the Washington Post, all of which released Social Reader apps. YouTube’s campaign to produce original television content includes funding Reuters, who will produce news shows for the video sharing site. ABC News also signed a deal to exclusively provide news video for Yahoo! while AOL purchased the Huffington Post.

And although Twitter and Facebook have been crowned digital giants when it comes to breaking news like the Arab Spring, their role is minimal compared to online searches and news websites. Only 9% of American adults “very often click on news recommendations on Facebook or Twitter,” while 36% click directly through to news sites, the study said. But as NPR notes, that statistic includes adults who don’t consume any digital news. In focusing on Americans who depend entirely on the web for news, more than half of adults admitted to using Facebook or Twitter to obtaining news — a statistic still inferior to the 92% of people who prefer news websites and of that, 85% who look to search engines.

But as Twitter and Facebook strengthen news consumption, perhaps it’s how people are accessing these social sharing sites that’s more important. The study contends that 44% of adults own a smart phone while 18% own a tablet, giving people more platforms to consume news.

And though the news media may not be any closer to a new revenue model, a renewed appetite for news may bode well for the industry. “That, in the end, could prove a saving factor for the future of journalism,” Rosenstiel said.

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