Frenemies: Network News and YouTube

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February 1, 2010, 3:56 pm
By Loen Kelley

Loen KelleyLoen Kelley

Shorenstein Center Fellow, Fall 2009
Television Producer

Read the full paper (PDF).

Excerpt

Introduction

Ever since Google’s web spiders began crawling the Internet, people who care about the news have been trying to figure out how to save journalism. Most of the focus has been on the newspaper industry, but the broadcast television news business is also in trouble. The news divisions of ABC, CBS and NBC deliver news in programming formats younger viewers rejected long ago — at set times of the day, limited to stories someone else has decided are newsworthy.

In 2008, for the first time in PEW Research’s analysis, more Americans said they went online for news than watched one of the three network evening newscasts. The evening news audience has not only been shrinking for three decades — losing, on average, one million viewers a year — it has also been aging. Consider the audience of one of CBS’s most popular shows, the news program 60 Minutes. The median age of its audience is 61 years old.

The next generation of news consumers is online. And when they go online for news, they aren’t thinking of the three networks as a source for news. Young people may have grown up watching ABC, CBS and NBC for entertainment, but the networks’ evening and morning newscasts are shows only their grandparents watch.

In its October 2009 report “How to Rebuild the Media Industries,” Forrester Research delivers an urgent message for media outlets: “We recommended increasing the number of platforms through which content is available as rapidly as possible.”

Indeed, if the networks want to reach younger audiences, they will have to find them. And the place to find young viewers of online video is the place they’re all watching it: YouTube.

YouTube is home to the largest focus group in the world. People from all around the world are watching more than thirty billion YouTube videos a month. That’s one billion videos every day. Forty-two million every hour. And YouTube offers television networks the kind of precision data on who is watching what video — as well as where and when — that the networks have never had and so desperately need. That’s the kind of information the networks could use to become a lot smarter about what it is those young viewers want. Because one thing is sure — it’s not what is airing on television.

Network news divisions should be embracing YouTube and other platforms. It’s where they need to be experimenting with innovative, groundbreaking formats for delivering news online. If used effectively, YouTube can help build the networks’ brand awareness and help younger audiences discover that network news means quality news.

Media outlets have three “issues” with YouTube. One, it doesn’t pay for content. Two, there is so much content on YouTube that it is unlikely any content provider will achieve a sizeable audience. Three, YouTube users upload their content illegally.

In 2009, YouTube successfully solved the issue of piracy. In early 2010, it began testing, on a very small scale, a transactional model that may address some of the issues of monetization. In its blog, YouTube describes how the new feature can help content owners get paid for their content: “Through this new offering, content owners now have control over the entire lifecycle of their work. They can migrate videos from rental to ad-supported; they can set the price and rental duration. In short, they can test and customize their distribution to fit their audience’s habits and their business’ needs.”

Also in 2010, YouTube began testing new navigational tools that will fine-tune a user’s “discovery” of content (similar to Netflix’s and Amazon’s “recommended” features) and they have plans to roll out many more navigational tools in 2010 that they believe will better highlight important yet undiscovered stories and keep users on the site for longer periods of time.

No online monetization scheme will ever fund the high costs of the broadcast networks’ infrastructures. And that’s why they need to start reallocating newsgathering costs now, rather than hoping for the unlikely day online advertising revenue will increase and cover the high costs of producing the news for television. The faster they figure that out, the better chance they’ll have to survive.

Forrester Research urges television executives to start shedding their costly analog infrastructures now because their revenues are headed lower, permanently. “We’re not being cruel, just economic: Why should people pay as much to consume media that is cheaper to produce and has marginal distribution costs near zero?”

The research firm offers incumbent media companies a survival strategy for the digital age, but the pill is a bitter one: “Dig deep, take risks and stage a comeback — even if half the fleet gets destroyed in the process.” And there’s no time to waste. “The time to rebuild is now.”

YouTube offers television news divisions a place to take those risks and, possibly, a chance to learn what it is, exactly, that today’s consumers of news really want.

Read the full paper (PDF).