The Future Transformation of News

It is important to understand that e-readers have thus far done nothing to fundamentally improve the journalism industry’s bottom line. Many media executives interviewed for this article described themselves as “bullish” about the long-term potential of mobile devices. They see an opportunity, but don’t know how big it is, and most are skeptical that subscription and advertising revenues will ever return to pre-Internet levels. Moreover, a number of authorities on the subject, such as Sarah Rotman Epps, who studies e-readers and the news media for Forrester Research, stress that many big media companies have “legacy problems”—debt, overhead, real estate, inflexible labor structures, etc.—that technology will never overcome. Within that context, a lot is possible, but a number of variables will determine whether the second chance is as profound a moment as some think.

Mobile and Tablets: One of the major events in newspapers, as in other news sectors, was the move to mobile. The serial success of e-readers, Apple’s iPhone (and Google’s Android variation and others from other makers) and now, the iPad and competing devices to follow, has grabbed industry attention. Offerings on all three platforms will proliferate and be upgraded during 2011. Some excited commentators seem convinced that these platforms will become the dominant form of reading news within three years. For now, though, the added revenues are not huge and must be split with the device makers. Apple, particularly, insists as well on controlling customer contacts and data, and rules on a case-by-case basis what is an acceptable app for sale on the iPad and iPhone platforms. Also, it is not clear what ad formats will work best in mobile or tablets, how those will tie to news content and whether pricing will settle out at premium levels or the modest rates for generic online ads. While news is a use of these devices, it is still unclear whether it will be an important use for a majority of buyers, as compared, say, to games like Angry Birds and Farmland. So hopes remain high but there is also a chance that three hot new formats will turn out to be opportunity-lite rather than industry savior.