Outsell, Inc. Surveys 2,800 Consumers on News Habits

BURLINGAME, CA, FEBRUARY 28, 2006-A new Outsell, Inc. survey of 2,800 consumers' news habits shows most Americans get their news from television, and that newspapers continue to cede readership to the Internet.

Outsell's HotTopics report, The Future Of News: Latest Reader Study Shows News Publishers Caught Between TV And Internet reveals how the interactivity and personalization afforded by the Internet has not only cut into newspaper readership, but in addition has weakened the link between reading and shopping, costing publishers revenue opportunities. Consumers also prefer the Web as the best route to news and information about health, personal finance and travel, topics that allow for both deeper exploration and sponsored content. Among the survey's key findings:

Television is top choice for national news

Seventy-one percent of respondents say they rely on network, cable and satellite TV as primary or secondary sources of national news. Thirty-three percent choose their local newspapers first or second to bone up on national events, followed closely by the 28 percent who access sites like Google, Yahoo!, and MSN (collectively known as GYM) and AOL News, which are aggregating national news articles from multiple major dailies and wire services. Only 11 percent of consumers are relying regularly on their own daily newspapers' Websites. Outsell's report shows a generational chasm between the older demographics, who prefer the now-dominant TV and newspapers, and the younger, who prefer online access for their news and information.

Local remains a stronghold for newspapers

When it comes to local news, however, consumers still turn to their newspapers first. Outsell's survey shows 61 percent of consumers look to their papers as an essential source for local news, events and sports, followed by television (58 percent) and radio (35 percent). Just six percent turn to the major search engines. The report points to ways newspapers can adapt their business models to stay ahead as a dominant local source.

News Companies Losing their Central Place in Commerce

Sellers of local goods used to rely on local newspapers for their best customers, and that reading/shopping connection forged a strong industry. Today's consumers, though, are shopping online. Outsell research shows shoppers first browse GYM/AOL sites (58 percent) and then other online sites (44 percent), digging more deeply into product data and consumer reviews. Twenty-nine percent rely on targeted magazines, 23 percent on word-of-mouth referrals, and 22 percent on print newspapers.

The "craigslist Revolution" is also dramatically affecting the purchase of classified ads. Forty-eight percent of those surveyed used e-Bay, craigslist or other online auctions to buy/sell over the past year, while only 10 percent bought print classified ads to sell an item.

Web Now First for Health, Wealth and Travel

Health, finance and travel features-traditional "staples" of newspaper content-are losing appeal with readers who want up-to-date information (i.e., the latest stock prices), the ability to drill down for data, comparison shop, and make on-the-spot purchases (i.e., travel/airline ticketing sites), and take charge of their health and wellness (i.e., WebMD). In personal finance, for example, sites like MarketWatch and CNNMoney are commanding 45 percent of consumer attention, versus print newspapers (36 percent) and online newspapers (9 percent). For travel, Outsell finds that 53 percent of consumers start with GYM/AOL, 40 percent go to buying sites like Expedia and Travelocity, and 32 percent consult their print newspapers' Sunday travel sections. For health information, users gravitate to GYM/AOL sites (43 percent) and specific health sites (37 percent) before print newspapers (just 26 percent).

The report also includes a listing of top news companies, their "nontraditional" Internet-based competitors, and financial data on each of these organizations. The new report is the first in a multi-part series as Outsell expands its coverage of the news industry. Upcoming reports will address the "Pscyhe of News Executives" in relation to their changing industry and "News Hitting the Wall." Other topics will be driven from further analysis of the data.

Outsell is available to explain the trends in this first report to journalists. To arrange an interview, please contact Dawn Ringel, Warner Communications, 781-449-8456 or dawn@warnerpr.com. To download this 39-page report and learn more about Outsell, go to www.outsellinc.com/newsstudy/index.htm or contact Outsell directly at 650-342-6060 or info@outsellinc.com.

About Outsell, Inc.:
Outsell of Burlingame, CA is the leading research and advisory firm providing actionable market analytics for the information industry. Founded in 1994, Outsell helps publishers, commercial information providers, and content software technology vendors identify, maintain, and grow markets and revenue streams. Outsell also works with information management executives in top corporations, government agencies, and educational institutions to benchmark spending, optimize performance, and demonstrate best practices. Outsell invests heavily in unique information industry data assets that form the core of its high-quality, fact-based research, analysis, and recommendations for clients worldwide. For more information, see www.outsellinc.com.