Pew: News revenue drops by almost one-third. Time to panic?

By CALE GUTHRIE WEISSMAN at Pando

According to numbers released today from the Pew Research Center, news revenue has declined by nearly one third since 2006. Pew estimates that the annual revenue in 2006 was about $94-$95 billion. Today the Center’s estimates put that number somewhere between $63-$65 billion.

What’s important to note, however, is the evolving channels from which this revenue is coming. In 2006 the vast majority of the money came from advertising — 82 percent to be precise. While advertising is still the leader in terms of incoming money today, it has dropped significantly, now representing only 69 percent of the total annual revenue.

In turn, audience revenue as a percentage of the whole has grown — that is, money coming in from “subscriptions, cable fees and individual charitable giving.” Today that represents nearly a quarter of the newsgathering industry’s annual revenue, compared to only 16 percent in 2006. The “twist” however, as Pew puts it, is that while the percentage of audience revenue is higher, the dollar amount is about the same if you factor in inflation. As Pew’s Jesse Holcomb writes, “While audience revenue is becoming more critical to the business, it cannot fully compensate for the loss of ad dollars.”

So what can make up that loss? News outlets (like Pando) have increasingly looked to venture capital or other private investments — these are up from 2 percent in 2006 to 8 percent today. But there are plenty of reasons why a huge influx of cash from billionaires may not always be the best thing for journalism. Meanwhile, digital and print subscriptions grew 5 percent in 2012 alone, but Pew excepts this number to hold steady or grow only slightly going forward.