We like getting our news online, but old habits die hard and the media industry isn’t making the revenue it expected from the Internet.

Those are the broad conclusions of the Project for Excellence in Journalism's annual State of the News Media report, which concludes that the so-called “democratisation” of the news media that the Web was supposed to produce has been something of a fizzer.

While Internet users may have embraced the notion of getting their news online, they’re not migrating to blogging and public affairs sites at the rate many media pundits were predicting.

“More people now consume what old media newsrooms produce, particularly from print, than before,” the report says. “Online, for instance, the top 10 news Web sites, drawing mostly from old brands, are more of an oligarchy, commanding a larger share of audience, than in the legacy media. The verdict on citizen media for now suggests limitations.”

In other words, although we are comfortable with new media, we still prefer established news sources.

“Citizen” Web sites and blogs have also suffered from the taint of elitism.

“Outsiders are not allowed generally to post original content, beyond commenting on the material from the site itself,” the report says. “More momentum appears to exist in citizen agenda setting than reporting, at user-news sites like Digg, which allow visitors to choose and share what they define as news.”

The study found that links to other sites are important. Users want quick navigation to places where they can find more specific or in-depth information. They’re not going to hang around on one site for long once they’ve learned what they want to know. This creates ad-selling problems, as it’s perceived that the longer a person spends on a site, the more likely they are to notice the ads.

On the money side, the online sections of most media outlets appear to be struggling to cover costs, let alone make profits. The advertising market remains wary of Internet advertising.

“The emerging reality that advertising isn’t migrating online with the consumer,” the report says. “The crisis in journalism, in other words, may not strictly be loss of audience. It may, more fundamentally, be the decoupling of news and advertising.”

The failure of online advertising to generate expected income has brought reductions in Web-based services and staff by many media outlets. America’s giant CBS network cut back on its online staff by 30% late in 2007.

The full report can be read at www.stateofthenewsmedia.org/2008