The Digital Transformation

The annual State of the News Media report describes a key development:

News organizations — old and new — still produce most of the content audiences consume. But each technological advance has added a new layer of complexity—and a new set of players—in connecting that content to consumers and advertisers.

In the digital space, the organizations that produce the news increasingly rely on independent networks to sell their ads. They depend on aggregators (such as Google) and social networks (such as Facebook) to bring them a substantial portion of their audience. And now, as news consumption becomes more mobile, news companies must follow the rules of device makers (such as Apple) and software developers (Google again) to deliver their content. Each new platform often requires a new software program. And the new players take a share of the revenue and in many cases also control the audience data.

That data may be the most important commodity of all. In a media world where consumers decide what news they want to get and how they want to get it, the future will belong to those who understand the public’s changing behavior and can target content and advertising to snugly fit the interests of each user. That knowledge — and the expertise in gathering it — increasingly resides with technology companies outside journalism.

In the 20th century, the news media thrived by being the intermediary others needed to reach customers. In the 21st, increasingly there is a new intermediary: Software programmers, content aggregators and device makers control access to the public. 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.

Meanwhile, the pace of change continues to accelerate. Mobile has already become an important factor in news. A new survey released with this year’s report, produced with Pew Internet and American Life Project in association with the Knight Foundation, finds that nearly half of all Americans (47%) now get some form of local news on a mobile device. What they turn to most there is news that serves immediate needs – weather, information about restaurants and other local businesses, and traffic. And the move to mobile is only likely to grow. By January 2011, 7% of Americans reported owning some kind of electronic tablet. That was nearly double the number just four months earlier.