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For stations, mobile technology leads to increased news consumption, but not profits

As might be expected, mobile technology is increasing news consumption—strengthening the appeal of traditional news brands—but technology companies are taking more of the profits. That’s the findings of the 2012 “State of the News Media” report by Pew Research Center’s Project for Excellence in Journalism.

The annual report provides a comprehensive analysis of the health of journalism in America and concentrates on key media sectors. This year’s study also includes special reports on the impact of mobile technology and social media on news.

Two trends in the last year overlap and reinforce the sense that the gap between the news and technology industries is widening. First, Pew found, the explosion of new mobile platforms and social media channels represents another layer of technology with which news organizations must keep pace.

Second, in the last year a small number of technology giants began rapidly moving to consolidate their power by becoming makers of “everything” in our digital lives. Google, Amazon, Facebook, Apple and a few others are maneuvering to make the hardware people use, the operating systems that run those devices, the browsers on which people navigate, the e-mail services on which they communicate, the social networks on which they share and the web platforms on which they shop and play.

News organizations are still struggling to make money off these digital distribution platforms, in part because the technology giants are capturing a significant portion of the money being spent, with five tech companies grabbing 68 percent of all digital ad revenue, the study reports, citing researcher from eMarketer.

The study found increased audiences for online, network TV, local TV, audio and cable TV, with magazines remaining fairly constant and newspapers seeing declines. But it also concluded that rising audiences for network TV and local TV did not translate into increased revenue.

The report finds that rather than replacing media consumption on digital devices, people that go mobile are getting news on all their devices. They also appear to be getting it more often. About a third, 34 percent of desktop/laptop news consumers, now also get news on a smartphone. About a quarter, 27 percent of smartphone news consumers, also get news on a tablet.

Most of those individuals (78 percent) still get news on the desktop or laptop as well.

The year 2011 showed some positive numbers for network news. Pew found that audiences for most network newscasts grew, and the three network news divisions, which for decades were hard to tell apart except for the faces on air, began to distinguish themselves from one another in what they defined as news. ABC and CBS also saw their web traffic grow.

In the evening, an average of 22.5 million people watched one of the three commercial broadcast news programs on ABC, CBS or NBC. That’s an increase of 972,700 viewers, or 4.5 percent, over the average viewership the year before, according to PEJ analysis of data from Nielsen Media Research.

Some of the growth, moreover, came from an unexpected source. All three evening newscasts increased viewers in the highly coveted 25-to-54 age group. The growth was driven by international news events like the Arab Spring uprising, the tsunami disaster in Japan and the killing of Osama bin Laden.

In the long erosion of network news audiences, however, there have been other upticks in the past—the end of the Cold War, the first Gulf War and the 9/11 attacks, all of which proved short-lived.

The broad trend is unmistakable. Since 1980, the three commercial evening newscasts have lost about 28.4 million viewers, or 54.5 percent of their audience, Pew said.

After years of losing audience and revenue, local television news appears to have settled into a kind of equilibrium, Pew found. Stations made less income in 2011 than the year before, but the decline was about what might be expected in a non-election year.

The overall audience for local TV news grew as stations added newscasts at different times and on additional platforms, including their digital channels. Local stations also expanded their online, mobile and social media offerings, but most have not yet generated a substantial audience.

Pew does not expect the audience growth at 11 p.m. local news to continue. Viewership in that time period has been on the decline for years, and the increase in 2011 does not appear to show evidence of a long-term rebound.

“We’ve reached a threshold for late news,” said Mark Toney, a senior vice president of the consulting firm SmithGeiger. “Only about 40-50 percent [of the audience] really wants it in any market.”

Local news programs that maintained or even boosted their share of viewers still saw their ratings decline. That suggests these newscasts are battling a trend over which they have no control, Pew said. If fewer people are watching broadcast TV of any sort at evening and late news time, local stations can’t expect to see their audience grow larger.

Morning news is a notable exception to the downward trend. The share there is holding generally steady compared to the year before and ratings are up. The evidence indicates that more viewers are turning on their TVs specifically to watch local morning news programs. In many markets, they’re also tuning in earlier than ever.

Newscasts starting at 4:30 a.m. have become almost commonplace; the number of stations offering news that early doubled again in 2011, by PEJ’s count, and viewership exploded, up more than 338 percent on average across all sweeps periods compared to the year before, although the total audience is still relatively small.

The bad news is that local broadcast ad revenues were only slightly higher than in the previous off-year of 2009, in the depths of the recession. And they were still a long way from the record $21.5 billion local stations reaped in 2007, the last non-election year before the recession hit.

Pew noted that some expectations for 2011 didn’t materialize. 2011 was expected to be a breakout year for mobile broadcast television, but it did not happen. A coalition of a dozen major broadcast groups is still working on plans to broadcast free digital signals to portable devices.

But apparently hurdles remain, including how to measure usage for advertising purposes, how to manage rights fees for sports events and other programs and how to persuade device manufacturers to install TV broadcast receivers. Some observers say it could be at least another year before those problems are worked out.