By Robert Niles: The 2012 State of the News Media report by Pew Research Centers Project for Excellence in Journalism is out, and it includes some eye-opening numbers on who's making money from news these days.
Here's a hint. It's not newspaper companies. From the report:
In the last year a small number of technology giants began rapidly moving to consolidate their power by becoming makers of everything in our digital lives. Google, Amazon, Facebook, Apple and a few others are maneuvering to make the hardware people use, the operating systems that run those devices, the browsers on which people navigate, the e-mail services on which they communicate, the social networks on which they share and the web platforms on which they shop and play. And all of this will provide these companies with detailed personal data about each consumer.
Already in 2011, five technology companies [Google, Yahoo, Facebook, Microsoft and AOL] accounted for 68% of all online ad revenue, and that list does not include Amazon and Apple, which get most of their dollars from transactions, downloads and devices. By 2015, Facebook is expected to account for one out of every five digital display ads sold.
A year ago, we wrote here: The news industry, late to adapt and culturally more tied to content creation than engineering, finds itself more a follower than leader shaping its business. In 2012, that phenomenon has grown.
"Our analysis suggests that news is becoming a more important and pervasive part of people's lives," PEJ Director Tom Rosenstiel said in a press release. "But it remains unclear who will benefit economically from this growing appetite for news."
Well, a first read of the Pew report suggests that it's Google, Yahoo, Facebook, Microsoft and AOL who are benefitting economically from the public's appetite for news online. :^) But let's not forget that quite a bit of that 68% market share that Pew reports for these five businesses is passing through to uncounted numbers of affiliates and partners, too. For example, a large chunk of Google's market-leading advertising income flows to its AdSense partners. (Full disclosure: I'm one of them.)
In my reading of the Pew report, I found an implicit concern that more and more online ad revenue was flowing to these tech company intermediaries, rather than directly to news companies as they presumably had done in the past. But I don't have a problem with that. Why? I don't believe in equating newspaper, broadcast and cable companies with the "news" industry.
I've never believed that newspaper companies are the originators of journalism. To me, the true originators of journalism are reporters and sources. Newspapers were yesterday's middlemen, bringing together reporters, an audience, and the advertisers who were willing to pay to reach the audience that journalists' reports would attract. Sure, newspaper companies played a vital role, but calling them the originators of content is akin to giving credit to an talent agent for an actor's performance.
Today, tech companies have disrupted these arrangements. As a journalist, I can use Google's Blogger to create my own publication and Google's AdSense will pay me for the advertising revenue that my work attracts. And let's not forget those downloads from Amazon and Apple, either, which provide an even more direct route for today's writers to earn income from an audience. I don't need a job with a newspaper a make living as a journalist now. Tech companies have become the new middlemen, through which sources and writers can reach an audience and customers, instead of having to rely on newspaper and broadcast companies to make that match, as they did so often in the past.