It’s news but not as you’ve known it - Reuters Institute report on digital news

The Reuters Institute Digital Report 2016 reports on the ongoing decline of traditional news media and its uneasy relationship with digital platforms.

The annual publication of audited subscription data used to be a moment of celebration in newsrooms. No longer.

Print sales and advertising revenues are declining rapidly. And while the audience for digital news is growing thanks to the reach of the internet, and specifically social media, it's incredibly difficult to make money.

The harsh reality is that digital news content isn't as valuable to its audience, or advertisers, as print.

In the last 12 months alone in the UK, The Independent has abandoned print, shedding around 75 jobs, and The Guardian has reported losses of £50 million.

The news business is broken

The decline in news print and shift to digital media has played out in newsrooms over the last two decades. In the UK, The Daily Telegraph was the first newspaper to launch a website in 1994.

More than 20 years on, the latest Reuters Institute Digital Report 2016 is a challenging read for anyone in the media or public relations business.

The fifth annual report is based on a survey of more than 50,000 people in 26 countries.

It tells the story of publishers losing control of distribution as consumers seek out news from algorithms and social networks. Increasingly people are unaware of the source of news content according to the Reuters Institute.

It also tells the story of the trust that consumers place in traditional news brands.

Therein lies a harsh irony for news publishers. The Reuters Institute suggests that it's hard to explain this apparent contradiction in any other terms than a new phase of media disruption.

The plain fact is that it’s a lot harder to make money in the news business than it was 20 years ago.

Driving revenue from online news is critical for publishers but the disintermediation of content, the economics of mobile, and rise of ad blocking, make it elusive for almost all publishers.

Let’s consider those three issues in turn.

Disintermediation

More than half (51%) of the respondents to the Reuters Institute Digital Report say they use social media as a source of news each week. Around one in ten (12%) say it is their main source. Facebook is by far the most important network for finding, reading or watching and sharing news.

According to the Reuters Institute Digital Report, social media is significantly more important for women and the young. More than a quarter of 18 to 24s say social media (28%) is their main source of news.

The Reuters Institute is rightly concerned that algorithmic selection of news will mean missing out on important information and challenging viewpoints.

Move to mobile

In terms of devices, smartphone usage for news is sharply up according to Reuters Institute Digital Report, reaching half of our global sample (53%), while computer use is falling and tablet growth is flattening out.

Ad blocking

Business problems for many publishers have worsened with the rise of ad blocking, which is running at between 10% (Japan) and 38% (Poland) but much higher amongst under 35s and people who consume news the most.

The vast majority of people that have downloaded an ad blocker are using it regularly, suggesting that once downloaded people rarely go back. Only around 8% of smartphone users currently use an ad blocker but around a third of respondents say they plan to install one on their mobile in the next year.

The only possible conclusion from the Reuters Institute Digital Report is that there will be a lot less news in the future than there has been in the past. The numbers simply don’t add up.

Yet Brexit and the US election shows the need for journalism in the public sphere is more acute than ever. Increasingly emotion usurps fact in social networks.

My view is that we need to discuss the role of the social network in the distribution of news content. There’s a clear imbalance in the value exchange.

We also need to have a conversation about the role of public service media. While it creates a discontinuity in the market, it may have an increasingly important position in a market where the fundamental business model is broken.

Impact on public relations

If you work in organisational communication the lessons from the Reuters Institute Digital Report are clear.

Traditional news media will continue to decline as part of your communication mix.

Its future role will depend on the size and scale of your organisation but branded media, influencers and community engagement will increasingly take its place.