News consumption and the new electronic media

Recently, the print and television news media have begun to question the future of their industries. From newspaper executives at the New York Times who have asked whether there will be a print version of their paper in ten years, to television news executives who openly speculate on whether there will be network nightly news, the stated cause for alarm is the competitive threat of the Internet. This article looks at the hypothesized shift of news consumption from the traditional media to the online news media. The hypothesized mass migration of news consumption behavior is not supported by the facts. Some migration from offline to online news consumption has occurred, but this number (12 percent direct substitution) is less than many believe. Another 22 percent of U.S. adults have substituted some online news for offline news, but for a substantial portion of this group,the online news media acts as a complement rather than as a substitute. Most significant is the fact that two-thirds of the U.S. adult population have not shifted to online news consumption and appear unlikely to do so. The author also examined the advertising markets for the traditional news media and for the online media and found that online advertising is an imperfect substitute for advertisers. Despite declining television viewership and newspaper circulation, advertising revenues are not only staying with the traditional news media but are also increasing, albeit slowly. The author has found no major impact on the economics of the news industry due to the online news media. This is not to say that pressures are not being felt, but they are not felt to an extent that warrants predictions of the demise of the traditional news media.