Answers are based on “The Story So Far: What We Know About the Business of Digital Journalism,” a report on digital news economics from the Columbia University Graduate School of Journalism.
Name three trends that have significantly changed economic models for news organizations in the digital age.
As the way people consume news changes, so does the main means of funding it: advertising. Groups and individuals seeking to advertise no longer have to buy ad space. They can post their ads on Craigslist and other websites for free. Companies can also buy targeted ads on Google and Facebook.
The aggregation model has changed as well. In the past, advertisers usually bought space without regard to where it would appear in the paper. On a news website, each page exists independently of the rest. While per-day page views are easier to monitor than circulation, they tend to vary dramatically depending on the news of the day. That means publishers have to undersell their ad space and may have difficulty filling it when traffic surges.
Finally,nearly endless online competition has forced news to become a commodity. In other words, consumers do not generally distinguish between news sources in terms of quality. They are unwilling to pay more for content of higher value. Traditional media has also lost a lot of revenue to aggregators that cull interesting content from other websites, then rebrand and repost it (e.g. The Huffington Post).
List up to three advantages that a new, digitally based news company has over a traditional print or broadcast organization.
Web-based news organizations benefit from the increasing number of consumers who get their news online. According to a Pew Research study, 65 percent of people ages 18-29 go to the web for their news. That means more people in that age range get their news from the web than from television or print outlets.
As more of them gravitate to the web, they identify the news sites they like and keep coming back. That helps companies keep track of readers with more accuracy than the haphazard studies of the past. Publishers know more about readers’ preferences and habits than ever.
Digital platforms build audiences quickly and far less expensively than traditional media. Launching a digital project takes less time and money than starting a print venture. Blogs, for instance, are usually free. Social media helps cut marketing costs in that it allows readers to publicize their favorite content. It also helps journalists gauge the impact of their stories, promote their work, get feedback and interact with their audience.
List up to three advantages that a traditional print or broadcast organization has over a new, digitally based news company.
Traditional print and broadcast organizations have the advantage of just that – tradition. Both have long sold ad space using the old system of aggregation. Traditional print organizations also have a long tradition of charging for content. Digitally based organizations, on the other hand, usually struggle when they try to introduce paywalls.
Traditional print and broadcast media offer an immersive experience rarely found on the web. In other words, they keep the audience occupied for longer periods of time. They also provide a “lean-back” rather than a “lean-forward” experience. The latter refers to task-oriented browsing common to people seeking specific information on the web. Though people might spend more time online cumulatively, that time is divided among many different organizations. Those people usually have more than one tab open at the same time.
Just as important to consumer experience is the ad itself. For the most part, online ads are less informative and entertaining than traditional ads. Since advertisers pay higher rates for quality advertising, that’s a definite disadvantage. Web-based organizations are often forced to use cheap ads called ”remnants” on their pages. These ads provide about a tenth of the revenue of normal ads and look it.