11:00 A.M., EST
THE WASHINGTON FOREIGN PRESS CENTER, WASHINGTON, D.C.
MR. ROSENSTIEL: Thanks. Thanks very much, and thanks for coming. I’m going to take about 10 minutes or so to hit some of the overviews from this year’s report on The State of the News Media in the U.S., and then hopefully have lots of time for your questions.
Since many of the broad trends that we hit on in this report may be familiar to you, certainly in general, let me tell you just a little bit about the Project for Excellence in Journalism and the Pew Research Center. We have been around for 15 years – the project has. We were part of Columbia University Graduate School of Journalism for 10. For the last five, we’ve joined with other Pew-funded projects in a research center here in Washington called the Pew Research Center that does polling, economic analysis, demographic analysis, analysis of the internet, and our work that studies changing patterns with news and news audiences. There are 130 people at the Pew Research Center, and our funding comes entirely from the Pew Charitable Trusts, which is based in Philadelphia, and is the family that – is the Sun Oil family here.
The State of the News Media is a report that we have done since 2004, so this is actually our ninth report. The first one followed the year 2003. And I would say that the trends that we see that relate to technology and news in the U.S. – in general, the U.S. is ahead in terms of the trends hitting here and the problems that affect news organizations based on my conversations with folks in media in other countries, but that these trends are not unique to us. They’re just occurring – we’re a little further along on the curve and in the crisis than some of the other countries. One big reason for this is that American media tend to be more dependent on advertising and generate much less revenue from subscriptions or circulations than media in most of the rest of the world. And as I will explain in a moment, the fundamental crisis brought on by digital technology – and this is not well understood – the fundamental crisis is more of an advertising crisis than it is any other kind.
In the first eight years of this report, we essentially established that the – a handful of major trends that have persisted throughout this period. The first one, which you well know, is that technology is shifting power away from journalists and news creators toward the news consumer. We are in a user-generated media universe. A consumer can decide when they want to consume the news, what news they want to consume, what topics they want to consumer the news about, and more. And that makes the press less a gatekeeper over what people know, and more of a responder to what people are interested in and what they do. So understanding the audience and how they are changing is going to be the key to anyone’s survival in the digital landscape.
The second broad trend that we’ve established over these nine years is that the crisis brought on by digital technology is an economic crisis, not an audience crisis. And this is not what was predicted by many experts who follow technology. The audience for traditional news brands is, by and large, holding up quite well, particularly in the United States. When you add together their digital audience and their legacy platform audience, some major brands are even seeing their audience grow dramatically.
The New York Times, for instance, sells 1.1 million copies in print each today. According to comScore, one of the rating agencies that measures online traffic, it has about 38 million unique visitors to its website every month. Now it’s a little difficult to compare these numbers, but if you have a pass-along rate of three per copy of the newspaper and you have a churn rate of maybe three, you might get to 9 million print readers of The New York Times, maybe 12 if you want to really get creative about it. If every one of those print readers is also an online reader, it means that The New York Times has perhaps tripled its audience because of the web.
So this is not a problem. The problem is something else. And overall, American newspapers have seen only a marginal decline in their total audience over the last decade. But they have seen a 55 percent decline in their advertising revenue over the last decade.
So what’s the problem? The problem is threefold. One, many advertisers no longer need news media to reach their audience. The largest share or the largest portion of newspaper revenue in 2000 came from something called classified advertising, which is companies looking to hire people, people trying to sell goods and services. Almost 80 percent of the classified advertising in American newspapers in 2000 is gone. Why? Because of things like Craigslist, where people can go person to person and sell their goods and services directly.
The second problem is that newspapers made a lot of money because of scarcity. There was one newspaper in most American cities. They could charge a lot for a large ad. A full-page ad in a major newspaper might cost more than $50,000 for one day. There is no scarcity on the web, so online advertising costs very little – pennies. Many years that we’ve been doing this, we see online traffic to news websites grow, and the same year, the cost of CPM or cost per thousand to buy an online ad drop by an almost equal amount.
And the third problem with online advertising is that the fundamental way that we interface or interact with news online is not complementary to the kind of advertising that’s associated with news online. The kind of ads that news sites try and sell on their websites are display ads. Those are the banner ads at the top of the website and the popup ads that pop up when you find an article. Online, traditionally, up to maybe the last year or two, the interface that we have with digital media is what you might call a lean-forward experience. You are leaning into – on the keyboard, looking for the answer to a specific question. You’re typing in a search. You’re looking for articles that do exactly this. It’s like research. Advertising that pops up when you finally find the research you’re looking for is not complementing the activity. What complements that activity is search advertising. You put in a search, you don’t see exactly what you’re looking for, you look above or you look to the right on your Google search to see if maybe those links will be helpful. But the advertising that jumps in the way of the article you’re trying to read is not helpful.
In old legacy media, the advertising that we encountered was complementary to the activity that we were engaged in. You were reading a newspaper and this is what we’d call a lean-back media experience. You’re leaning back, reading the newspaper, interacting with one publication, and seeing what that publication is giving you. And one of the things that it’s providing you is advertising about your community. And you read an article and then your eyes move down and you say, “Oh, here’s an ad for that store. I’ve been thinking about visiting that store.” I think, “Oh, here’s a pair of shoes. I’ve been thinking about a pair of shoes.” So there’s lots of research that shows that people like the ads in newspapers. And the ads on television are another kind of content. We talk about them, we are amused by them. Online, the advertising is not as complementary.
So these are the long-term trends that we’ve seen up until now. What about in 2011? Well, the first major trend that’s important to recognize in 2011 is that the age of mobile technology really arrived. This was the year, 2011, that the majority of cell phones sold in the United States began to be smart phones that could access the internet. Forty four percent of all smart phones now owned in the U.S. – of all phones in the U.S. are smart phones. I’m sorry, 44 percent of adults in the U.S. now own a smart phone. Eighteen percent of adults in the U.S. now own a tablet – an iPad or a Kindle Fire. And that number doubled between September of 2011 and January of 2012, and that was before the introduction of the new iPad 3. I suspect this summer we’ll see tablet ownership over 25 percent.
Twenty seven percent of American adults now get news on some mobile device on a regular basis. And here is what you might not expect. Mobile technology is actually adding to people’s news consumption, not replacing it. It is also enhancing the appeal of traditional media brands, news brands. Why? It turns out that when you are on your computer during the day at your desk, that’s one kind of news consumption. When you are in transit on a – hopefully not in a car, but when you’re in – on a bus or in a train and you have nothing to do, people pull out their smart phones and begin to consume news at a time when they wouldn’t have otherwise. And at home, when you are on your tablet, when – tablet consumption increases in the evening. People will sit on their sofa and they are suddenly on a computer consuming news at a time when they weren’t previously.
Another thing that’s happening with mobile technology is that on mobile technology, people go directly to news sites through apps and bookmarks to a much greater degree than they do on computers at their desk, where search and aggregation are a bigger portal into news. Why? I think a lot of this has to do with the touch screen. You’re on your mobile device, and rather than try and go through Google search and then read the little links, it’s simply easier, because of the way we use an interface with mobile technology, to touch the icon, the bookmark, the app of a familiar, trusted brand rather than to type in a subject and try and figure out from multiple places where you might get information about this.
So the research that we’re seeing shows that people are adding news consumption through mobile apps, they have longer sessions on mobile devices than they do on conventional computers, they read more articles per session on mobile devices than they do on conventional computers, and they have more sessions per month on mobile devices than they do on conventional computers.
And then here is one other thing that one might not have expected: One of the problems over the last decade for news and journalism is that there was very little evidence that people read long-form articles, long articles, in-depth material online. The visits per page and the data on – the eye-scanning data suggested that people spend about 30 seconds looking at an article and then moved on. That is not true on mobile devices. People read longer-form articles more often on mobile devices, and they do so every day.
I think it’s possible that the appeal of the tablet – in particular, the iPad or the Kindle Fire, which is roughly the shape of a piece of paper – is that it has returned the idea of a lean-back media consumption experience to digital technology. Not returned it; it’s introduced a lean-back media experience for the first time to digital technology. You can sit on a sofa and read a book on a Kindle. You can certainly read a magazine article. Magazines are one of the primary beneficiaries of mobile technology, particularly on tablets. That’s what the data is showing from the proprietary data that we’ve had a chance to look at.
But there is – there are major challenges associated with this opportunity as well. One is that from an economic standpoint, news companies are falling further and further behind technology giants. In 2011, five companies accounted for 68 percent of all online advertising sales. Those five companies were Google, Facebook, Microsoft, Yahoo!, and AOL. There are no legacy brands on that list. In 2014, Facebook is expected to account for one out of every five ads sold on the internet.
So in a sense, the pipe – the beneficiaries online are the people who own the pipe, the devices or the mechanism for accessing material rather than the content producers. And there are growing questions about whether content, producing content, will make you the king. The other problem is that mobile technology is yet another device, another platform, another technology for news companies to try and keep up with. And each new iteration, each new technology stretches the journalists somewhat thinner as they find, oh, now I have to tweet, now I have to post on Facebook, now I have to create a visual version, an audio version, or I write my story iteratively because people are consuming news on a continuing basis.
One last point, and then we’ll go to questions. One of the big questions about news in the United States is what some people – somebody once decided to call a paywall, which is will people – will news organizations finally move to online subscriptions. The word paywall has become unpopular in American news circles because it suggests you’re trying to keep people out. What news companies are trying to do is invite people in by having them pay an online subscription. And there are various mechanisms for doing this. It could be online only, it could be you subscribe and then you have access to everything, whether it’s in print or in any other form.
But at the end of 2011, there were 150 American newspapers out of 1,350 that had some form of online subscription, roughly 5 percent. There will be another hundred in the next six months. So we’re going to see at least – close to a doubling over the next year, and it may accelerate quite a bit beyond that. And the reason for that is twofold. One is The New York Times has had a lot of success with their paywall. They are – they have about 400,000 people who have subscribed online. That’s a significant amount of revenue for The New York Times. Assume you’re selling 1.1 million subscriptions in print or selling 1.1 million copies, you’ve essentially almost increased that by 50 percent with online subscriptions just in the last year. And they’ve lost virtually no traffic to their website in the process because they made it a very permeable paywall. There were lots of ways to get the articles for free if you wanted to.
The other reason we’re going to see the move to paywall is more grim. Frankly, many American newspapers can no longer afford to give it away. They have reached a point with their revenue where things are so tight that their survival is in the balance, and they need to charge, or they will not be able to sustain themselves.
With that, I’d like to stop and entertain any questions that people have.
MODERATOR: Okay. Thank you very, very much, Tom. We’re joined today, as I mentioned before, by our colleagues in New York, so we’ll take questions from there. But we’ll first start with questions here in Washington, so when you ask a question, please wait for the microphone, give your name, and your news organization.
QUESTION: Hello. My name is Arthur, I’m correspondent for the Swiss Broadcasting here in Washington. Coming from a broadcasting perspective, I was always wondering – and maybe you might have some data on this – that when you watch a whole news cast, do you watch everything that’s in it? I mean, that was before you could move forward and rewind and everything. But you learned a lot about the topics that you didn’t choose to – topics, cultural topics, topics from foreign countries, and now it’s very easy to just tune everything out that is not really in the core of your interest. And I wondered if you could elaborate on that or what – how are we informing people? Are we only able to give them information in parts that they want to know about or not?
MR. ROSENTIEL: Yeah. This – in the – I am a – my background is as a print journalist. I am not a trained academic, but I play one on TV now. And in social science terms, this is what is referred to as incidental news acquisition, or learning about things that you didn’t know you would be interested in.
In the age of newspapers, okay, in the 19th century, there was less incidental news acquisition because you could skip over the stories in a newspaper you weren’t interested in. In the age of electronic media, first radio and then television, this incidental news acquisition actually grew because people suddenly had to watch the whole news cast to get to the weather report or whatever it was that they were interested in, and they didn’t know what was coming next.
QUESTION: That’s why they put it at the end.
MR. ROSENTIEL: Yeah, right. The water-skiing squirrel was always at the end, because then you could get people to watch the whole thing. There’s been – there was an enormous amount of fear that with the age of the internet that this incidental news acquisition would disappear or dramatically shrink, because people would have the capability of only looking at what they were interested in. And if that happened, our shared knowledge as societies and communities would shrink. So there would be a significant civic dimension to this, as well as shrinking your ability as journalists to say to people, hey, this is important, this is at the top of the newscast.
What the data show is that people are actually still interested in finding out: Is there anything important that I need to know? That these values that we’ve had that go back even to the very earliest days before there was anything that we could call journalism, which is – what’s new? Habari gani in Swahili. Is there anything I need to find out? That that is a human instinct that has – that isn’t changed by the technology.
And so the top of a website is still the most popular place. The front page of a website is still the primary portal in to where people get news. The most websites in the United States in terms of traffic are general interest news websites. The top five sites in terms of traffic in the United States are: Yahoo! News, CNN, AOL, MSNBC – those last three sort of shift around depending on the year – and then The New York Times as number five. And there’s an enormous amount stability, if you go down that list even to 25, of what these destinations are, and they are all destinations that provide this agenda-setting kind of news.
I would say – and I cannot prove this with data – that the public square, the shared knowledge, remains. We all know that there was a shooting in Tucson. We all know the outcome of the election in Russia or the election in the U.S. We all know that Mitt Romney is the likely nominee in the Republican Party primaries. We all know that there was a tsunami in Japan. But I would say that this public square is narrower than it used to be, and the amount – the depth of the shared knowledge that we have is shallower, because we are also spending more of our time, which is finite, in places of our particular interest. And we’re also spending somewhat more time in ideological spaces – news that we just agree with, which is not part of the American journalism tradition as much.
I can talk about whether people are only going to sites and destinations they agree with, but I want to get some other questions.
MODERATOR: Okay. Other questions? Yes, Andrei.
QUESTION: Thank you. Andrei Sitar from TASS, from Russia, and I would be interested in hearing your thoughts about whether people only go to what they’re interested in. But my question, immediate question, was I remember a few years ago the FTC did a study trying to help the industry, and the industry basically refused help. So I don’t even know if they released the report that they prepared. So if you could tell us about what was happening there and in general about attempts to find solutions based on corporate protection for news, for instance, or any other legal or other devices that you know about and we don’t that exist out there in that regard. Thank you.
MR. ROSENTIEL: Well, I know about them, but I can’t tell you. No, I’m kidding. (Laughter.) Yeah, the FTC has not actually released that report. The FCC – the Federal Communications Commission, which was also working on a report – did release its report and concluded that there wasn’t much the government could do.
I think that the reason that – I would say that in general there is a group on the political left in the United States that would like to see more public financing of media and more protection. There was a bill in Congress briefly that didn’t go anywhere to allow news companies to become nonprofits and also operate as commercial entities and continue to do all of the things that they do now but accept nonprofit contributions.
None of these things has gained much momentum. And I would say that the reason is two things. The first is the news industry does not believe that the government can solve its problems. It does not want to be beholden to the government. It feels there’s too deep a strain in the U.S. of thinking we’re here to watch the government, and if we depend on them for our economic survival, we won’t be able to do that. And we’re not – it hasn’t gotten that bad yet – at least a couple of years ago it hadn’t.
And the other is a different strain which comes from another sphere, which is this is technology changing the landscape. You cannot stop it with government. You cannot come up with a legislative solution that would work. And the industry that would benefit from it doesn’t want it anyway, so there’s almost no constituency for it.
I would say there is also, from a third group, a sense – and maybe this is also the same group that is opposed – that thinks it just wouldn’t work – that journalism will survive, but the traditional institutions that produce it may not, that people still need news and journalism isn’t going away; it’s just being transformed, and somehow it will find its natural footing. Because the audience for news isn’t shrinking. It’s actually growing. So the fact that we haven’t figured out an economic model to monetize the news may just be a temporary condition, as long as there’s still a demand for this product.
It may well be that Facebook will buy a news organization and news becomes sort of a loss leader rather than the revenue source for Facebook. It becomes the reason – another reason that people go to Facebook, but not the reason that Facebook makes a lot of money.
MODERATOR: Okay. Other questions?
Yes, please. Right behind you.
QUESTION: Hi. Li Ping from China Radio International. As you say, a lot of newspapers rely on subscription and only subscribers can read latest newspaper – online newspapers. But it seems to me, many newspapers also release part of the – of some articles to general public consumption. So is there any research on – what is the pattern of newspapers – what kind of articles they release to general public consumption? And – or are they open to the public – general public, say, a day later or a week later? A question – I’m interested in knowing that. Thank you.
MR. ROSENTIEL: Well, most American newspapers release all their articles for free. There are 1,350 newspapers in the U.S., only 150 have any paywall. So the great majority, it’s all free. Of the 150 that have – it’s now probably closer to 170 that have adopted some sort of subscription online – the most typical pattern is what we call the metered model, where you can have some number – 10, 15, 20, maybe 30 – that you can access for free, and once you reach that number, then you have to pay.
This was – this is a newer iteration. The first iteration was: We’ll make some articles that we consider more valuable or more unique, we’ll put those behind the paywall, and the ones that are not unique, we’ll give away for free. But what happened was then the people didn’t value the articles that people – that the news organization thought were the most valuable. New York Times tried to put, for instance, its editorials and columnists behind a paywall, but the article – but the news articles were free, which was – it made no economic sense because it costs very little to produce the editorials and columnists, and you spend close to $200 million on your news, and you give that away.
So that – and it just didn’t – it wasn’t – the audience for that wasn’t large enough. So the meter idea seems to be – make more sense and is the new trend. And the question is: The New York Times started with 30 free, which is one a day. And now they’re tightening that. They’re going to move probably, eventually, to 10. For a small newspaper that is just in a local community, is that the right number? Or should it be some bigger number, a smaller number? Where do you set the dials?
One clear pattern is you need to allow some access to some articles so that people can decide that they see value here. If it disappears, and they can have no access to any articles, they’ll think: You know what? I live without this everyday and my life is complete. I still get up in the morning and go to bed at night, and I don’t have any access to this so I don’t need it. Whereas if people say: You know what? I saw a really good article in there today for free. I’d like to see a few more, but I’d have to pay for them. So some sampling is clearly part of where I think this is going to go.
One thing to understand: In the United States, newspapers do not make much revenue from subscription. Historically, only 75 – only 25 – 20 to 25 percent of their overall revenue has come from people paying for the paper. We don’t charge much for the newspaper; we wanted to maximize the audience and sell a lot of ads. In Europe and most other countries in the world it’s closer to 40, and some cases, 60 percent of the revenue comes from people buying the publication, which is why, ultimately, the solution in other countries could be – this could be much more important. If we – if the American newspaper industry captured all of its subscription revenue online that it had in print, it wouldn’t solve its problems. It wouldn’t come close.
MODERATOR: We’ll turn now to our sister office, the Foreign Press Center in New York. And please state your name and news organization.
QUESTION: Hello. My name is Mercedes Gallego. I work for El Correo from Spain. And you mentioned that this is not – probably enough audience, but an economical crisis. And I was wondering first: What is the impact of the economic crisis that we are going through, if you suspect that once the economy get back on its feet, something will change in terms of advertisement for newspapers?
And also, I noticed studies in the U.S., but you mentioned that this is like a crystal ball for Europe and other parts of the world. If you can throw some light of when these trends we’re going to see then in Europe or how is it going to change there? Thank you very much.
MR. ROSENSTIEL: No one knows for sure how much of the economic crisis facing the news industry in the U.S. is what we would call structural, that is due to technology, and how much is cyclical, which is due to the downturn in the economy. The estimates two or three years ago was that maybe at the worst of the economic collapse was that maybe it was about half of it was cyclical and half was structural. So we had a year in which advertising fell 25 percent – almost 25 percent in one year. So that would have been – half of that was going to be – would come back when the economy came back.
I think the problem is that the longer that advertisement – the more the audience migrates to the web and that continues to acceleratethe more the structural problems increase, because newspapers can only make, currently, about 15 percent of their ad revenue online. Even if half their readers are online, they’re only able to generate 10 to 15 percent of their ad revenue for all the reasons that I described before about why advertising doesn’t work.
So whether the tablet helps, whether online subscriptions can help, you can – you need to get that number up. We did a study earlier this year that examined how much newspapers are growing digital dollars in comparison to how much they’re losing print dollars. So can they get these two things to balance? And what we found is that in 2011 – or in 2010, American newspapers were losing seven print dollars for every new digital dollar they gained. In 2011, the numbers got worse: They lost 10 print dollars for every new digital dollar they were adding. So they need to get these numbers in balance to survive. And that is more than just a weak economy, because the economy has – although not robust – has improved significantly from 2009 and 2010.
There was another part of that question that I’ve lost track of – but why don’t we just take another question.
MODERATOR: That sounds good. We’ll move right along –
MR. ROSENSTIEL: Oh, I’m sorry, yes. Okay, yes. To the extent to which – other countries. What we see in general – I’ll just sort of give an equation here: The more developed a country is, the worse its newspaper problems are. And the reason for that is that a more developed country has more broadband connections – connectivity, more of its people are online, and more of its people already know how to read. Where we see newspapers thriving is in developing countries, where you have rising population rates, rising literacy rates – more people are learning how to read each year – and those people are not connected to the internet. So for them – for this new reading population, a newspaper is a new technology. That’s true in parts of Latin America; it’s true in India; it’s true in other parts of Asia. So overall, newspapers are growing worldwide and circulation is growing worldwide. But that’s not anywhere true in the developed world.
QUESTION: Hello. I’m Marco Bassets from La Vanguardia Spain. I would like to ask you a personal question: How do you get your information?
MR. ROSENSTIEL: That’s – it’s interesting, because like many people, I used to get up in the morning and spend a lot of time with the newspaper. What happens now is – and this is true of the research that suggests other people are doing this – I will read much of the newspaper before I go to bed. There is tablet consumption – use of tablets, and news consumption on tablets, spikes between 11 and midnight every night, as people get ready for bed and they take their tablet and then maybe they’re in bed with their tablet, I don’t know. But they go online and they read tomorrow’s newspaper tonight. And when they do that, they read it longer because they’re not rushing to go to work. So that’s one reason that news is benefiting from this.
In the morning, I check things that I don’t already know. There was a hockey game in the – that affected a Washington team last night, and I just missed it. So I had a funny experience where I woke up this morning not knowing the sports score. That’s very unusual, to not know what happened last night when you wake up. It used to be the norm.
So I would say that, like many people, I read iteratively through the day. News consumption spikes after lunch. People hear something when they’re at lunch, and they go online to learn more about it. It used to be – 15 years ago, most news consumption occurred at the beginning of the day around breakfast time, a little tiny bit in the middle of the day, and then right before dinner, and right before bed, basically, three times. Now, news consumption goes all through the day with these moments when it’s larger. And the new moment, because of mobile technology, is right before bed, which could actually be a very significant potential.
QUESTION: Do you read any print newspaper?
MR. ROSENSTIEL: Yes, I do. I read – I get two newspapers delivered to my home in the morning in print, and then we have print newspapers delivered at the office. But I find that I – it’s easier to actually just read those on my computer, because I don't have to get up and – when you’re – the other thing is, when you’re on your computer people think you’re working. If you’re sitting there at your desk reading the newspaper – (laughter) – people think you’re not working.
QUESTION: Who will print or read newspapers in five or ten years? Will someone do it?
MR. ROSENSTIEL: In the United States, the Sunday newspaper phenomenon is very important. Sunday circulation has held up better than weekday, and many newspapers in the U.S. make half their revenue – half of all their money – on Sunday. Why? Because again, we’re very advertising dependent, the Sunday paper is very thick; it’s a lot more ads. Maybe half of all the ads that appear in a newspaper in a week appear on that one day. So I think that one safe prediction is that the Sunday newspaper will – newspapers will want to continue to print on Sunday and will encourage people with online subscriptions to get the Sunday print newspaper home delivered but maybe not the weekday.
The only thing that’s holding that back is that newspapers in the U.S. are worried that if they stop delivering every day people will stop all together. But if we get to a point where you have a printed Sunday paper and maybe one or two other days a week, when there are heavy ads, you can enjoy the benefit of cost savings of digital delivery – you don’t have to print and deliver the paper every day – but you’ll enjoy the benefit of these big print advertising days, which provide most of the revenue. So I believe where we’re heading is a hybrid of digital only maybe four days a week, maybe five, and print delivery on the two days that the newspapers in the U.S. make most of their money, which is the day the food section comes out, because of the grocery ads, and on Sunday, when all those inserts and all those other sections and people have more time to read.
MODERATOR: We have time for one or two more questions, and then we’ll wrap. But you haven’t asked one, right? Yeah. There you go.
QUESTION: Hi. Shu Han with China Radio International. I also have a question. And you have just referred that the U.S. media is highly dependent on the advertisement. But you have also said that the advertisement is not directly related to the audience. For example, there will be an audience growth in the New York Times, but their advertisement declined at the same time.
So why should the traditional media spend such a high price to maximize its audience? And is it necessary, or is it meaningful? Thank you.
MR. ROSENSTIEL: Well, I think it depends on the publication. If you’re a very – if you’re a newspaper in one town, print advertising in that town is very targeted, right? You know you’re reaching the people who live in that community and who would use those – walk down that main street and would go to those retailers. So you’re not necessarily wasting your money printing – buying print advertising in that newspaper.
The New York Times reaches about 1 percent of the elite demographic around the United States with its print publication. And on Sunday, many of the ads in there are national; they’re not just New York ads. So that may be a very effective way for those advertisers to reach an elite audience in the same way that if you advertised in the Wall Street Journal and you’re trying to reach a business audience, it’s fairly targeted.
The challenge online – and there are many, many challenges to advertising, but one of them is the Washington Post has a highly international audience for its website. Do the local advertisers who buy space in the newspaper – does it make sense for them to buy ads online? Or should they be reaching a different kind of advertiser, and how do they reach a different kind of advertiser. Do they have a sales staff that knows how to sell international advertising or even national advertising? They don’t have those sales people on their print side, so how do you do this? How do you target the ads so that you can make them more valuable and so you can charge more for them?
Google and Facebook, they’re really – their commodity, the thing that is going to be the future of their companies is not advertising or not search; it’s actually audience – personal audience data. Every – if you have an iPhone and an iPad and an i – and an Apple computer, they know every keystroke that you make. If you have a Droid phone and you use Chrome, which is a Google product, they know every keystroke that you make. If you use Gmail, the algorithm reads your email. And if you say, “Gee, I really was – I was really cooking while playing tennis last night,” you’ll see search ads for cooking utensils show up because the algorithm thinks you were cooking rather than playing tennis. Or it might think you were doing both things.
That’s the future of advertising, is targeting it based on your user behavior, your language in your email, et cetera, et cetera, et cetera, and matching the advertising to your – to knowledge about you and your behavior.
News – many news companies are very far behind. We’ve done research that suggests that news companies are doing very little of this targeting for a lot of different reasons. But that’s the future, or the perceived future, of how to make internet advertising valuable.
MODERATOR: We’ll take one last question. Andrei.
QUESTION: Thank you. And I did want to come back to the question about polarization. For me, it’s the question about the political polarization that we see here. And the question to you is how much technology contributes to that.
MR. ROSENSTIEL: Yeah.
QUESTION: How everybody finds his own niche. Thanks.
MR. ROSENSTIEL: Yeah. It’s a very popular idea to think that Americans now get all their news from only sources they agree with ideologically. We see the rise of more partisan media. We see cable TV talk show hosts who are the most popular figures on cable. You see channels like MSNBC which were once trying to produce news in one style moving toward a more partisan style. And all – very often, I will go to meetings where people will say now everybody just gets their news from people they agree with.
The data are very clear that this is not the case. And the reason is fairly simple. Most of that ideological media is not reportorial in nature. Those are not organizations that have a big staff that go out and find new things. Bill O’Reilly will comment on the news, but he’s not going out and reporting it. Sean Hannity is commenting on the news, or Rachel Maddow is commenting on the news, but they – it’s not a reporting show.
And we asked in a survey two years ago, when we started to probe this – we asked people where they got – where they were regular audience – where they visited, and then we asked them why. And the answers were quite clear. People go to Bill O’Reilly for commentary, not for news. They go to Rachel Maddow for commentary, not for news. They told us they even go to Jon Stewart for comedy, not for news.
What we see in the audience data – and it’s scattered in different places – is that people get their facts from traditional news gathering that is, in the U.S., generally nonpolitical. Then they go after, or at some point, to partisan sources to help them make sense and decide what to think about the news. But it’s a more complex idea than, well, I see more partisan media out there; that must be where all the audience growth is. It’s not. And particularly online, where people are getting news iteratively and getting it through the day, that’s where they’re getting news in short bits, and they’re getting new pieces of information.
So our news consumption has become more elaborate, and this reach for partisan sources makes sense in the – for the following reason: When we have more information at our fingertips, making sense of it, creating knowledge out of it, becomes more complicated because you have to sift through more facts. So it creates a greater demand for what I call sense-making sources. And Bill O’Reilly and Rachel Maddow and all the others create the impression that they are sense-making for you, even if their conclusions are the same day after day.
MODERATOR: Okay, Tom. Thank you very, very much.
MR. ROSENSTIEL: Thank you.
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