Pew: young people signal an online news future

use of the web for news by young people doubles in one yearThis week’s stunning Pew Research report “Internet Overtakes Newspapers as News Source” is a wake-up call for the broadcast industry.

The Pew Research Center for the Public and the Press has been tracking media usage since the turn of the century, and for the first time ever, the Internet has surpassed newspapers as the main source of national and international news for people overall, but the big story, in my opinion, is what’s happening with young people.

According to Pew, as many people aged 18-29 cite the Internet as their main source of news as they do television. This is the canary in the coal mine for broadcasters, who, like newspapers, have been struggling with an aging mass audience for years. No longer is it a guess that the Web is the future for news and information (although it never really was a guess, the handwriting being obvious for over a decade).

television and the Web tie among young peopleNearly six-in-ten Americans younger than 30 (59%) say they get most of their national and international news online; an identical percentage cites television. In September 2007, twice as many young people said they relied mostly on television for news than mentioned the internet (68% vs. 34%).

The percentage of people younger than 30 citing television as a main news source has declined from 68% in September 2007 to 59% currently.

The spike in the use of the Web for news by young people is truly remarkable, and it mirrors a previous study by Pew during the Presidential campaign.

One caveat for this study is that it only looks at national and international news. Newspapers and television stations still dominate local news, but it would be foolish to assume safety in any mass marketing incumbent. There are plenty of online local news efforts underway, and it’s just a matter of time before the Web dominates at the local level as well.

Research is all about the source

In one week, we’ve had two “studies” telling us different things about where Americans get their news.

In a report from Magid and Hearst-Argyle, most people choose local TV news. The study made mouths water and lips smack as a chorus of “we told you so” rang from the board rooms of various local broadcast companies.

Not only is local TV news content the biggest audience draw for news and information on-air and on digital platforms – it is also the most effective video advertising platform, according to new research results…

But a second report, this one from Zogby International, reveals that the Internet is the top source of news for nearly half of Americans. Two thirds, the survey found, are dissatisfied with the quality of journalism, calling it “out of touch.”

So who do you believe? Both can’t be right. The truth is neither is right. The Magid study is of 2,700 viewers of local news. Of course, they’d say that local news is their top choice. The Zogby study is of 1979 adults on the Web. Of course, they’d say the Web is their top source for news.

We badly need research in this area, but we shouldn’t pay any attention whatsoever to studies like these, because research is all about the source.

Paid video downloads doomed (or not)

A new report from Forrester Research pronounces a death sentence on the paid download market. According to an Information Week account (I can’t afford the report itself), the video download market will peak this year with $279 million in revenue, up from $98 million last year.

The research firm has found that only 9% of adults online have ever paid to download a movie or TV show, and that these consumers are “niche media junkies” who “do not represent the vanguard of a rush by mainstream consumers.”

“The paid video download market in its current evolutionary state will soon become extinct, despite the fast growth and the millions being spent today,” predicted Forrester analyst James McQuivey. “Television and cable networks will shift the bulk of paid downloading to ad-supported streams where they have control of ads and effective audience measurement…”

Well, isn’t that special? Niche media junkies, huh? Not the vanguard, huh? Don’t you just love the way researchers categorize people as “mainstream consumers?” The implication is that we’re all just lumped together waiting for the easy road of passive entertainment.

What’s missing here (and in similar types of summaries) is the degree to which people are trying to escape commercial interruptions and how technology is enabling that. The assumption that these studies make is that people would rather sit through ads than pay for an ad-free environment, but the hue and cry from the public whenever TiVo talks about disabling fast-forward during ads ought to give you a hint.

I don’t doubt that ad-supported content will always have a place — and perhaps THE place — in the world of video downloads, but I don’t think this market is anywhere near as doomed as the folks at Forrester would have us believe.

Newspapers make more from online video than TV

A new Borrell Associates’ report due to be released Tuesday finds that newspaper-run websites are making more money from VIDEO advertising than TV station sites are by a ratio of almost 3 to 1 ($81 million to $32 million).

The numbers are small, but the growth isn’t, and Borrell is saying it’s just begun.

Video Ads, Paid Search Dominate Local Web by 2012

Source: Borrell Associates Inc., 2/2007

The report states that the newspaper money is coming from a new type of video ad.

Where will most of that (advertising) money go? Not to the purveyors of traditional “word from our sponsor” commercials, but to those who can offer long-form video information that their Web site visitors actually choose to see.

A few years ago, Doc Searls, one of the authors of The Cluetrain Manifesto, wrote that “there is no demand for messages.” He argued that the illusion of such a demand was one of the central tenets of mass marketing and one that technology was helping people overcome (think TiVo). We’ve been so busy “driving traffic” that we forgot to ask if anybody really wanted to get in the car.

It’s important to understand, however, that this has never been a desire to get away from advertising; it’s the unwanted nature of the beast that’s the problem.

The most important point of the Borrell report isn’t that newspapers are beating TV stations at their own game. It’s HOW they’re doing it, for this is a market that has tremendous potential for growth, especially at the local level.

Smart newspapers are offering these ads as part of their online classifieds, and there’s no reason television stations can’t do the same. Classifieds are the place in the print world where people go when they want advertising. But let’s step away from the print paradigm for a moment and look at this from a television perspective. What are video classifieds if not a series of channels in a station line-up? This is the world we need to explore, and the Web makes that possible.

This is the practice over at our old friend YouTube. YouTube sells “channels” to big advertisers, who are then responsible for providing the content for the channel. It is, in effect, long-form video advertising, and some of it is darned good. The advantage that YouTube brings is, of course, the staggering community of people who can choose to click on those ad channels. Check out their “partners” channel page. Could you do something similar? Why not? This is VIDEO, for crying out loud — local television’s bread and butter.

Borrell told me that the 2.0 world is “coming quickly,” and that media companies need only look at his projections to understand that local online search and local online video are where we need to point our guns.

The traditional mass-media forms of packaging news and selling “display” advertising around it are becoming less viable on the Internet. This new environment mimics what we know of cable TV, only with far greater interactivity and consumer control.

The most exciting thing I’ve seen in the numbers is the consumer demand for advertising, which pales in comparison to consumer demand for local news. In the end, the local media company that wins is one that can deliver a wealth of interactive content — especially video — around consumer verticals like real estate, health, automotive and other high-priced items that require lots of prior research.

There’s a general assumption out there that people are avoiding commercials, because they don’t like advertising. The Interactive Advertising Bureau goes to great lengths to point out that this isn’t true. People just don’t like to be interrupted by commercials. Will they seek out commercials? You bet.

Again, think of the enormous demand for online classifieds across all ad segments. And what is EBay, if not a place where people advertise their wares?

People need to shop and are always looking for bargains or selection, regardless of what they’re buying. While most people watching a commercial may do so for entertainment or because they have no choice, there is a small percentage that actually wants MORE information, as my friend Steve Marx constantly preaches. We need to be in the business of helping consumers find that more information.

Another piece of evidence revealing a demand for advertising is click-throughs for online ads. The rate that people click through is a crude measurement of demand. These rates vary depending on the relevancy of the content within which ads are placed — the more contextual the ads, the better the response. The average is somewhere around a half a percent, but contextual ads have much higher rates. That means some people want more, and providing long form video ads online is one way we can meet that need.

This new Borrell report is an absolute stunner and perhaps one of the most important and useful pieces of information to come along in years. It will be available for general distribution via the Borrell site at noon on Tuesday.

Newest Nielsen "science" boosts cable, deflates broadcast

I’ve just spent the past hour studying a document that describes Nielsen’s “Zero Cell” ratings model, the latest gimmick from a company whose statistical analysis has determined broadcast revenue for decades. A friend told me, “You need to be a Navaho Windtalker to decipher this stuff,” and I think that’s fairly accurate. I’m going to try, however, because it’s yet another big problem for local broadcasters.

This has been in place for a couple of ratings periods, but the results are really just beginning to be felt now as local sales professionals hit the streets with numbers that, in some cases, are very different than they were before.

A little history, and please remember that this is MY interpretation: As cable brought about audience fragmentation, this created an enormous problem for Nielsen, because the whole game is based on sample size. Television advertising isn’t sold by household numbers; it’s sold by demographics within those households, so fragmentation is a big deal for statistical analysts, who need big sample sizes to be confident about the numbers.

Nielsen measures audiences three ways today: meters, diaries and local people meters. Despite technology, most demographic measurements (ages, gender, etc.) are determined by the oldest method, the diaries. While meters do a good job of capturing household viewing, very often there’s no quarter-hourly match in the diaries, and that’s a problem when it comes to demographics. Here’s the way the Television Bureau of Advertising (TVB) puts it:

In any single quarter hour when there is meter tuning to a source (indicating HH tuning occurred), but no corresponding entry in a diary (to indicate which demographic was viewing), a zero cell occurs. This is also referred to as “tuning without viewing.”

This has been around since meters were first introduced, but the exploding cable universe led to more and more audience fragmentation, and that led to more and more “zero cells.”

Since the lion’s share of these “zero cells” came from cable viewing, the cable industry bitched and moaned that they were getting screwed. Nielsen apparently didn’t move fast enough, so the industry created its own measurement for demos and called it “Fusion.” The methodology apparently didn’t meet Nielsen or the TVB’s “standards,” but the cable industry didn’t give a crap. This is about money, folks, enormous sums of money.

Sensing on which side their future bread was going to be buttered, Nielsen last year announced this “Zero Cell Ratings Model,” which populates some of those “tuning without viewing” quarter hours with demos from what it calls “donor quarter hours,” or the demographic skew of quarter hours with similar tuning/viewing patterns.

Following me?

The end result is that the latest official Nielsen ratings show that while the homes using television (HUT) level stays the same, the persons using television (PUT) levels have gone way up. This has negatively impacted demographics for broadcast sales but positively impacted the same for the cable industry. Some would argue that the new Nielsen strategy more accurately reflects real viewing, but that’s not the point.

Not only is the universe into which broadcasting casts its net shrinking, but the company that measures that universe has adopted a new method that cuts the pie slices even thinner.

In football parlance, this would be called “piling on,” and it’s just another challenge for the beleaguered television broadcasting industry.

And yet, we wonder…

Online Media Daily carries a story today that’s pretty good news for Apple and its iTunes store.

comScore Networks Thursday reported that sales at Apple’s digital music store year-over-year have grown 84% during the first nine months of this year.

The Thursday report comes just days after a report from Forrester Research stating just the opposite — that iTunes sales had fallen 65% the first six months of the year.

Apple fired back with a statement denying that sales had slowed, and claiming that iTunes accounts for nearly 6% of all the music sold in the United States, making Apple the fourth-largest music-retailer. Piper Jaffray chimed in with its own research Tuesday, indicating that the number of songs sold per week on iTunes had grown 78% during the first nine months of 2006 compared to the year-earlier period.

Forrester has since backed off a bit (we all just misunderstood what they were saying), but there are a couple of points here. One, this kind of “story” hurts everybody’s credibility — everybody’s. I mean, Forrester is a great company, but they were off-the-mark here, and the media picked up the story and spread it around. Consumers with iTunes accounts must have been shaking their heads about it, because even anecdotally, they knew this simply wasn’t true. You’d have to be living under a friggin’ rock to believe that iTunes is doing anything other than exploding.

The second point is that all these new numbers reveal that the energy for buying tunes one-at-a-time (can you say “unbundled”) is very powerful and runs deep. Media 1.0 types may wish that the Forrester report was true, but in our heart-of-hearts, we had to know it wasn’t.