Media outlook bleak

There are few surprises in the sixth annual State of the Media report from the Project for Excellence in Journalism. The news business is  in bad shape, especially local television.  “Local television remained the nation’s most popular source for news, but, on a percentage basis, it was among the biggest losers of audience in 2008,” the report says. “Viewership was flat or declined for most newscasts across all time slots.”

As we’ve reported here and at NewsLab, deep budget cuts have led to layoffs across the board. Just last week, Media General became the latest news group to close its Washington, DC, bureau, putting six more reporters out of work. The PEJ report says 20% of journalists who worked in newspapers in 2001 have  left the field because their jobs have been eliminated.

The heart of the problem is a broken business model, according to the report:

It is now all but settled that advertising revenue — the model that financed journalism for the last century — will be inadequate to do so in this one…Several new revenue streams most likely are needed. The closest thing to a consensus right now is that no one source is a likely magic bullet.

Cable news, one of the few bright spots last year, may have something to teach other media about profitability. Efforts to finance the news industry via online micro-payments or non-profit support aren’t going to work, the authors say. Their suggestion:

Adopt the cable model, in which a fee to news producers is built into monthly Internet access fees consumers already pay. News industry executives have not seriously tested this enough to know if it could work, but these fees provide half the revenue in cable.

We’ll take a closer look at some of the other data and ideas in the report as time permits.