In the US debate over news there is an assumption among many that the Internet is killing news organisations.   People point to the worrying figures about the numbers of journalists that have been laid off  (with net newsroom employment down by more than 10,000 since 2007), the difficulties facing city and state newspapers, and to the dramatic decline of ad revenues.

There’s no denying that these developments are worrying. But focussing on the US picture only tells a very partial part of the story about the relation between the news industry and the internet.  The recent book that we produced at the Reuters Institute on The Changing Business of Journalism and its Implications for Democracy reveals that the US newspaper industry has been unusually vulnerable. The lack of an active national press market, combined with an industry organised around relatively small local and state markets and an unusually high dependence on advertising in general (often more than 80 percent of revenues as opposed to around 50 percent in Europe) and classified advertising in particular has left American newspapers particularly exposed to the arrival of competitors such as the Huffington Post, Craigslist, and Monster.com.

Too often, the US experience is seen as a portent of things to come for the rest of the world. In reality, the travails of the US news industry may be an outlier.  Elsewhere, the outlooks are brighter. The internet poses challenges – to business models of many established organisations but it also provides grounds for optimism, in three respects.

First, thanks to the internet, consumption of news is at its highest ever levels – both through aggregators like Google News, through social media such as Facebook, and through the traffic to news organisations’ own websites. UK based news organisations such as The Daily Mail, The Guardian and many others have seen their web traffic grow to scores of times the circulation of their traditional printed products.

Second, by reducing distribution costs the web is creating opportunities for many news organisations from small and medium sized countries such as the UK to have truly global distribution for the first time, with up to two thirds of those figures for web traffic coming from outside their home country. Rarely before have news organisations been able to move beyond their own domestic markets so easily and at such limited cost. This greatly increases the diversity of news and opinion available to online news users around the world and forces journalists to raise their game

Third, the web and the growth of social media don’t just allow journalists to engage with their readers in new ways, and provide a richer and more well-sourced product. They also allow news organisations to forge a direct relationship with readers, to know what they care about, who they are, and to track how they respond to the product. This tendency is not without both editorial and business challenges. Editorial priorities that respond like a digital windsock to the flow of web traffic are not the best way of fostering a resurgence in accountability journalism. But in business terms, this holds considerable promise as long as news organisations do not cede too much control over customer data and distribution to new intermediaries.

How many other industries are being presented with the huge potential that the web presents to news organisations? Soon, almost everyone can be your reader, viewer, and user. There’s no doubt new technologies have disrupted existing business models and pose challenges to journalists and to executives. But the opportunities are more significant than the threats. Those opportunities are greatest for organisations offering attractive content and operating in a global language, which are now no longer limited by the size of their domestic market and the prohibitively high costs of breaking beyond it. UK news organisations in particular therefore have a great opportunity ahead of them. The challenge is whether they can be smart and nimble enough to seize it.

This article originally featured as a blog for The Economist, which can be read here, and was a response to the question: “What makes you most optimistic for the future of the news business?”

David Levy is Director of the Reuters Institute for the Study of Journalism at the University of Oxford.

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