Not Exactly a News Flash — TV’s Prime Time May Have Passed | American Funds

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Investment Insights: The Long View

October 2015

Not Exactly a News Flash — TV’s Prime Time May Have Passed

“The dramatic decline in newspaper ad revenues since 2000 has to be one of the most significant and profound Schumpeterian gales of creative destruction in the last decade, maybe in a generation. And it’s not even close to being over.”

— Mark J. Perry, Economist, University of Michigan

Online and social media rival television as the main source of news in the U.S.
Source: University of Oxford, Reuters Institute for the Study of Journalism, Reuters Institute Digital News Report 2015. Data from YouGov are based on an online survey conducted in 12 countries, including the U.S., at the end of January/beginning of February 2015. The total sample size was 23,557 adults, approximately 2,000 per country, with access to the Internet. Respondents were screened out if they had not accessed news in a month. Data for sources of news for 2014 were estimated.

How people consume news has undergone a sea change. More people now get their news from digital sources than they do from either print newspapers or the radio, and digital is starting to make a move on TV as the dominant place people go for news.

Indeed, while TV news still has millions of viewers, the medium may be losing its hold on the next generation of news consumers. In the U.S., about two-thirds of those 18 to 34 years old say they get most of their news online.

The rise in digital news consumption is largely attributable to technology that made new businesses possible, which changed people’s behavior. Technology enabled social media sites, such as Facebook and Twitter, where many people now get their news. The proliferation of connected devices has also enhanced consumers’ ability to choose how, when and where they access news, films, music and books. The shift has far-reaching consequences for media groups as they struggle to adapt to changing habits.

What happened to reading the paper? The chart shows that every age group has largely abandoned the paper, even the oldest surveyed. Digitalization has been catastrophic for papers. It took a half century for annual newspaper print ad revenue to gradually increase from $20 billion in 1950 (adjusted for inflation in 2014 dollars) to $67 billion in 2000, and then it took only 12 years to go from $65.8 billion in ad revenues back to less than $20 billion in 2012, before falling even further in 2013 and 2014.

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