After posting the unhappy news that newspaper ads are at 1965 levels, I thought it might be interesting to take a look at how much revenue newspapers get from their print readers versus their online ones. It offers a reality check as newspapers try to figure out where to go from here.
Print newspapers took in $34.7 billion in ad revenue last year and had 49 million subscribers and newsstand sales. That works out to $709 per unit of circulation (Unlike my “1965” post, I’m not using Alan Mutter’s 2009 estimates, $28.1 billion, since I don’t have an estimate on 2009 circulation. Using his ‘09 estimate, the print figure drops to $573 per unit of circ. But total subscribers and newsstand sales will fall, too, by an as-yet-undetermined amount. If they fall 4 percent, that will work out to about $603 per subscriber). *
Newspapers online had $3.1 billion in ad revenue last year and averaged 67.3 million unique visitors per month. That’s $46 per reader.
$709 (or even $603) versus $46. And you wonder why newspapers still like their print products.
But that doesn’t even tell the whole story, because, recall, newspapers still cling to that 19th Century business model known as getting customers to pay you money. Alas, the most recent data I can find on industrywide circulation revenue is from 2004, and the Newspaper Association of America hasn’t returned my calls or emails.
So let’s go with that 2004 number, which was $11 billion. Yes, I know circulation has declined 11 percent since then, but I’m making a somewhat-educated guess that increases in newsstand and subscription prices have offset that—at some major papers, circulation revenues have actually been growing while circulation itself declines.
Add that circulation revenue to ads and the print newspaper had about $45.7 billion in revenue last year. That works out to $940 per unit of circulation ($834 under Mutter’s 2009 estimate and the guesstimated 4 percent circulation decline). *
To repeat: $940 per print subscriber or newsstand buyer versus $46 per online reader. $45.7 billion versus $3.1 billion. That means a print purchase is worth more than 20 times the revenue an online reader is. This is going down, of course. While last year a print unit of circulation brought in twenty times as much revenue as an online reader, this year that number will decline to somewhere around eighteen, assuming the above estimates. *
And if anything, these numbers understate the disparity. I don’t have any idea how much newspapers get for things like reprints and syndication, though those don’t comprise a major part of the revenue pie.
The boilerplate caveat: These numbers are revenue, of course, not profit. Production costs eat up much more of print revenue than they do of online.
Now, some will holler that it’s apples and oranges comparing online readers to print paying customers because there are multiple readers per unit of circulation for a print paper.
My point is about paying customers, but okay. There are roughly two readers per copy of the print newspaper, so that would bring the number to about $470 per reader ($417 with the FY09 estimates) versus $46 per online reader, which matches up pretty neatly with the famed, lamented ten-to-one ratio that afflicts newspapers’ digital hopes.
And you don’t want me to run the numbers on online subscriptions versus print subscriptions, and anyway I don’t know of any data out there. I’ve estimated The Wall Street Journal, the only American paper to successfully charge, gets about $60 or $70 million a year from online subscriptions, which would add $1 to online revenue per reader.
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You have outlined a classic case study in disruptive innovation. The need to cling to higher-revenue models, even as they decline, is at the heart of the Innovator's Dilemma (read the book by Clayton Christensen). It's all very understandable, but the problem with clinging too hard to the old model is that eventually it goes away, whether you like it or not (your last sentence is probably most telling). Thus, the fatal flaw in Farhi's argument.
#1 Posted by Jim Lenahan, CJR on Fri 21 Aug 2009 at 12:52 PM
Excellent analysis WITH DATA.
Keep it up.
#2 Posted by Dave Barnes, CJR on Fri 21 Aug 2009 at 01:06 PM
You say: Print newspapers took in $34.7 billion in ad revenue last year and had 49 million subscribers. That works out to $709 per subscriber.
Newspapers online had $3.1 billion in ad revenue last year and averaged 67.3 million unique visitors per month. That’s $46 per reader.
Already newspapers have a larger online audience than for print. And paid circulation is a small part of newspapers profits as you point out without taking in account distribution, printing etc. But the advertising dollars haven't followed.
This isn't about readers paying for content. This is about newspaper executives finding advertisers for their content as your two paragraphs demonstrate.
Then you add: And none of this matters if print ad declines don’t stop plunging by 20 percent to 30 percent a year.
If you believe you can stop people from gravitating to a medium that is much better, faster, more comprehensive for delivering the content you are creating, please notice what happened to record players, cassette players, VCRs and now DVD players. That is what is happening to the print product. News is best served immediately, that's why it's called news. The electronic format is best suited for the goals of journalism.
#3 Posted by Eddie, CJR on Fri 21 Aug 2009 at 01:19 PM
Let´s face it, a heck of a lot of no readers. the new generations have not been readers. Retinal special effects, TV, online news, face book, tweeter etc. the alternatives are numerous, not like 30 years ago. Trying to shove the past into the future, dismisses the present, and everything looks bleak. Reading in general seems to be on the way out. Video´s, music, facebook, all retinal consciousness that you. Peter Knopfler
#4 Posted by Peter Knopfler, CJR on Fri 21 Aug 2009 at 01:30 PM
I'm reading this in Firefox with Adblock Plus. I'm worth $0.00.
#5 Posted by bob, CJR on Fri 21 Aug 2009 at 02:09 PM
I'm reading this in Firefox with Adblock Plus. I'm worth $0.00.
#6 Posted by bob, CJR on Fri 21 Aug 2009 at 02:10 PM
Timely as I just paid my newspaper carrier for another 3 months. Still on the fence on how long I'll keep it up. Baby steps to letting go of my paper. Tactile creature, I suppose.
#7 Posted by Christine Sierra, CJR on Fri 21 Aug 2009 at 03:40 PM
The underlying data is BS. The unique-user counts for websites are largely noise, badly inflated by cookie-clearing and users of multiple PCs, and do not reflect actual in-market human users interested in the community.
We all need to stop fooling ourselves that unique user counts have ANY relevance to the local media business model.
If you look at the revenue generated by a (properly run) local newspaper's website and divide it by the number of actual in-market, advertiser-relevant users, you get a VERY different picture, one that will stun you. A newspaper website can generate more revenue per page viewed than a print product.
The problem is not one of the medium's inability to generate revenue per user or per pageview. The problem is poor execution on the part of newspapers in two key areas: content and sales.
The news organization is responsible for building an audience. On the whole, newspaper sites are failing at this task. They have failed to use the medium for its strengths, replicating print content onto a medium that should be interactive, and missing every opportunity to be useful and interesting.
The advertising organization is responsible for selling access to that audience. On the whole, newspapers have failed to properly train and incent their local sales forces to do so.
This is not an unsolvable problem and there are many points of light. But on the average it's a depressing landscape.
#8 Posted by Steve Yelvington, CJR on Fri 21 Aug 2009 at 03:45 PM
All right, Steve. I'm working with the data I've got. You have some better numbers, I'm all ears.
But even if unique visitors were inflated by a factor of 2, that brings you to $92 per reader.
Anyway, I tried to point to the uncertainty in this graf:
Still, the online numbers aren’t as bad as they seem. Not all online newspaper readers are made equal. The top, say 10 percent of readers, who visit the home page twice a day are worth exponentially more than the bottom 10 percent, junk traffic that bounces in off Digg or some blog and which sees a page or two and spends maybe 10 seconds on the site. I wish I could quantify how much the top 10 percent are worth, but I’ve never been able to find data on that. Still, remove the junk traffic, and the online revenue per reader would rise.
Your point about "in-market, advertiser-relevant users" is exactly the kind of data I've tried to find with no success.
And let's not forget--something I should have pointed out in the post--that these online revenue numbers are also inflated by upsells, which according to Alan Mutter account for some two-thirds of online ad revenue. Many of those don't even know they're buying a Web ad with their print one.
#9 Posted by Ryan Chittum, CJR on Fri 21 Aug 2009 at 06:13 PM
Just a friendly reminder that much of the news on the Web comes from, yes, newspapers.
#10 Posted by Marko, CJR on Fri 21 Aug 2009 at 06:49 PM
If the US Newspaper industry was able to supply quality journalism with $30 billion of (inflation adjusted) ad-revenue in 1965, why can't the industry produce equally high quality journalism for the same amount today?
#11 Posted by Jonathan, CJR on Sat 22 Aug 2009 at 02:44 AM
The revenue per reader/subscriber isn't as relevant as the swift decline in those figures. This underscores the need to develop a new business model that moves beyond our longtime reliance on an advertising/circulation model and connects businesses with our digital audience in more meaningful ways. I describe such a model in my Blueprint for the Complete Community Connection: http://stevebuttry.wordpress.com/2009/04/27/a-blueprint-for-the-complete-community-connection/
#12 Posted by Steve Buttry, CJR on Sat 22 Aug 2009 at 04:28 PM
I subscribe to The New Yorker and some other magazines, my local newspaper, and I buy the New York Times once or twice a week. I do visit Web sites, and though many are interesting, I wouldn't pay for any of them. They're like soap operas -- the same stuff over and over, so they bore me quickly. A newspaper should use the Web to extend its brand and market itself, but only a very foolish one would abandon its current print business model and stake its future on the Web, because no real money is being made there, and I doubt there will ever be.
#13 Posted by Mike, CJR on Sun 23 Aug 2009 at 12:24 AM
I'm not sure revenue per reader is really all that relevant. Wal-Mart and most major retailers and grocers have made their fortunes through large numbers of narrow profit-margin sales. The Web seems to be moving journalism toward this model.
The problem is not that there's less revenue per reader in the online world. We can scale up for an almost infinite number of readers with almost no marginal costs. Under these conditions, we should expect lower revenue per reader than the old model.
Instead, the problem is that there's less revenue, period. Online ads are not keeping pace with declining print revenue, while online subscriber revenue is almost nil. One small group of community papers I've talked with is still generating 80 percent of its revenue from print editions despite a big push toward the online world. They've got a slick site with video, photo galleries and other multimedia content, yet the situation remains the same.
There is no natural law that says publishing and advertising have a symbiotic relationship. the industry has been very fortunate that's been the case over its history. But those times are over. Advertising is facing much the same pressures as journalism, and that may force them to evolve in a direction that doesn't benefit journalism (at least not to the same extent). It's time we consider models that don't depend so heavily on advertising revenues.
#14 Posted by Jim, CJR on Sun 23 Aug 2009 at 09:08 AM
No matter how much you adjust circ numbers for "inflation" (and as a one time media buyer, I suspect the print circ is as inflated as internet unique visitors) the truth is plain to see - ad revenues are down. From my perspective as a former ad agency "suit" (representing Fortune 50 Companies), ROI on advertising has been eroding since the 1980's. A temporary boom in ad space & time demand during the Wall Street Internet boom in the 1990's lulled the industry into denial. Today's spending drop is a long time coming. I suspect that Alan Mutter http://bit.ly/JdWJL is speaking from a similar "big picture perspective."
Anyone who claims to have THE answer doesn't. We need experiments. But experiments must have a theoretical chance of replacing the current business model with a viable, sustainable one.
Most of you are writers. I am a marketer. You would probably write the following more succinctly than I. Please indulge me more of your attention than I deserve to tell you why I think there is good news to capitalize on, although it will take disruption in all 4 "P's" - product, price, place, promotion. (If the formatting here makes this hard to read, since I don't know how to use HTML tags for style, here's where I've published it on my blog: http://bit.ly/EjhJR
Most of you seem to think that pricing and placement are givens. Content has to be free. This means that ISPs, Wireless providers get to keep all the money they collect from consumers to distribute the content. As much as I agree with most of the analysis in "5 reasons newspapers are failing" by Bill Wyman http://bit.ly/MiZUA - you guys are beating yourselves up more than you need to. Suspend for a moment the idea that "content is king" and you, therefore, are responsible for all this.
The new insight I offer: what if pricing and place were not givens?
The good news is that the communication industry has a higher share of a consumer's wallet than ever before. In fact, according to Veronis, Suhler, Stevenson, even as ad spending grew dramatically in the 1990's, consumer spending (mainly for access via cable, ISPs, wireless) grew more, surpassing advertising in importance to the industry in 2004. The lines have crossed. And the gap is widening. While ad spending nose dived in fourth quarter, more consumers subscribed to premium channels like HBO than ever before and profit margins were at all time highs.
How do publishers and programmers get a bigger share of these dollars? It will take a major disruption to the relationship between publishers/ programmers with their distributors (cable, ISPs, wireless).
This is not to disagree with Steve Yelvington http://bit.ly/Xu4f2, who calls for product (content) and promotion (ad sales) innovation, Steve Buttry http://bit.ly/15CFko, who is more specific: product (evolve beyond content provider to connection provider) and promotion (offer advertisers a direct sales/e-commerce medium not just an awareness medium) or even Paul Farhi's suggestion http://bit.ly/uE5tP that newspapers should just exit the web and stick to print (If what he really means is - we deserve to be paid - our initial approach to the web was all wrong.)
What if publishers/programmers (aka media brands) owned the relationship with the consumer, collected the money and paid the distributors for their services?
This would be a disruptive innovation in the market as well as internally. Most publishers/programmers are not experienced marketers because they have relied on 3rd party distributors to market to consumers.
Many journalists intuitively get the value of "owning" the customer relationship and are putting a lot of time into building their personal brands on
#15 Posted by Katherine Warman Kern, CJR on Sun 23 Aug 2009 at 10:31 AM
Just one note: It seems to me that you are comparing daily newspaper readers (subscribers + others who read a newspaper) with monthly web users. Would that be the correct way to do it? I don't think so.
Wouldn't it be more fair to compare the numbers of newspaper readers with daily rather than monthly web users? It would definitely change the comparison, although not the major conclusion.
#16 Posted by John Einar Sandvand, CJR on Sun 23 Aug 2009 at 12:02 PM
I think well-run legacy newspapers are in an enviable position. First, they've reduced their head counts, not just in their newsrooms but in their composing rooms, printing plants and in distribution. Their costs have gone way down. Second, newspapers can easily enter the cyber world, but their cyber competitors can't enter their print world because the barrier to entry is too high. So, newspapers hold the high ground. Third, there's going to be a great shakeout. Facebook and MySpace, Salon and HuffPo, etc. and etc., are wonderful in many ways, but they're bad businesses. Why? Because they don't make money. Newspapers do, and they'll make more once they realize that the future -- really, no kidding -- is theirs for the taking.
#17 Posted by Mike, CJR on Sun 23 Aug 2009 at 10:11 PM
Ryan, first of all, you are doing some of if not the best analysis and reporting about the economics of the newspaper industry. The fact that you have such a hard time finding/getting data, is symptomatic of the industry's problems.
One are where newspaper executives (and I use the term broadly) have been incredibly ineffective is thinking about how to sell advertising in ways that reflect the dynamic nature of the web. For example, how about creating a marketplace around the "most emailed" and create an auction for advertisers, with the CPM rising exponentially as the traffic goes up. I track the NYT most emailed in great detail, because among other things it is a window into the zeitgeist of that still incredibly influential group of readers/users/content consumers (I don't know what to call them anymore!). The patterns are as follows. The usual suspects - Dowd, Friedman, Brooks are usually in the top 25 (daily, seven days, 30 days) After that, it's almost all health, food and nutrition, science, and quirky features like Estelle Parsons doing yoga at 80. Bittman's butter cookie article was number one on the thirty day list for the whole time. So, why not pitch a butter company, who could run an add, with a click to print a coupon. Upon redemption, NYT gets part of the revenue share. Use the same idea with the yoga . . . you get the idea.
Now this will immediately get squashed by squeals of "church/state" from the editorial department. This is very old school. Editors and publishers must come to the table to think about new ways of generating revenue, that are possible - I believe - without destroying trust. They have the numbers - huge traffic. It's up to them now to figure this out.
Ryan, keep up the great analysis, and thanks so much.
#18 Posted by Cathy Cranston, CJR on Mon 24 Aug 2009 at 08:50 AM
At $46 per online reader I could make a living with just 1,000 readers. That's not necessarily bad news.
#19 Posted by edward ericson, CJR on Mon 24 Aug 2009 at 02:35 PM
Jonathan,
I think the newspaper industry still puts out a significant amount of high-quality journalism. It's certainly not as much as ten or even five years ago, but it's still far more than any other platform.
#20 Posted by Ryan Chittum, CJR on Mon 24 Aug 2009 at 02:53 PM
Steve--I'm not saying this is the most important datapoint ever. I just like crunching numbers sometimes.
Jim--I'm with you on moving away from the reliance on advertising, which has and will always be an insidious force in journalism. Subscriptions or donations or whatever better align the publishers' interest with its readers' and increasing that pie is going to be critical to figuring out a business model that actually works to support professional, public-interest journalism.
Katherine--Thanks for commenting from the ad side, and, I was going to say forget what I just said to Jim, but you're on the same wavelength.
John--For all intents and purposes, daily newspapers circulation numbers are the same as monthly newspaper subscriber numbers.
Mike--I agree there's a lot of hype about these digital media sites. Salon has always been a dog financially. Facebook is taking in $500 million a year in revenue now and still loses gobs of cash. Maybe it figures a business model out, maybe it doesn't. Same with twitter, which has almost no revenue three years after its birth. But Gawker has figured it out, as have a not insignificant number of individual bloggers.
Cathy--Thanks! We need far more reporting on what newspapers are doing on the ad side of their Web sites. I suspect the reason we have such limited information is because the picture is truly ugly--see my comment about "upsells" above.
Edward--The math doesn't work for individuals. Newspaper web sites get far more page views per person than a blog with 1,000 readers. Since print subscribers and advertisers pay for a large newsroom, their websites have much more content to be read.
#21 Posted by Ryan Chittum, CJR on Mon 24 Aug 2009 at 04:19 PM
Thanks, Ryan, for your excellent piece, and moderating an informative discussion about it. I'm learning a lot.
What's becoming increasingly clear is that the Web, almost always, destroys the value of content in and of itself, so to make money, the producers of content are migrating away from the Web and into the physical world. Examples: music companies want a greater share of the concert proceeds from the artists it records, promotes and markets; film companies, though benefiting mightily from downstream revenues, almost none derived from the Web, see success at the box office as ever more important.
Concerts, theater, film and newspapers are sweaty, physical, labor-intensive and management-intensive businesses. Done well, and with a little luck, they can and do make lots of money. The Web is ephemeral in just about every way you can get your mind around that word. Especially when it comes to profit.
#22 Posted by Mike, CJR on Mon 24 Aug 2009 at 11:00 PM
Ryan, thanks for a stimulating article and one of the best set of comments on this topic I've read.
Big problem here is that unless there is a pay barrier, every additional visitor online does not add revenue to the publisher. Scale is simply a passport to play in the ad space and get taken seriously. The metric that currently adds marginal revenue is either page views (for cpms) or, increasingly, response (for cpcs/cpas). This is one reason why Google is the only real winner in growing ad spend online, because search is not content and the model is built on delivering active response.
Lots of comments here about newspaper companies failing to sell imaginatively; but I must put some blame on a buying community which cannot see past the internet as a direct response vehicle. Good content will not deliver high click rate precisely because it is good content and worth reading/viewing. But that does not mean is not of zero value to the advertiser; quite the reverse if the advertising is well created and relevant. Until advertisers accept the models and ideas that media owners are falling over themselves to introduce in order to make the web pay (some of which are mentioned by other contributors), online will not be a business for news companies. And the first step is to accept that like any medium with a good quality highly-engaged audience, the web can deliver brand value way beyond direct response.
#23 Posted by Rodders, CJR on Tue 25 Aug 2009 at 05:17 AM
Ryan,
There is one more thing worth considering in this discussion of print versus screens. And that is this: reading a print newspaper's articles on a paper surface is much more conducive to processing, digesting and analyzing what we are reading, compared to when we skim/scan quickly -- at least much more quickly than when we read on paper -- and the differences between reading on paper versus "screen-reading" (aka "screening") are so vast both in mental and emotional terms -- scientists are already studying these issues using MRI brain scans -- that we need to do a reality check here and ask ourselves: do we really want to the futuure to be a place where all news is "screened" online or via a Kindle or similar e-reader? Okay, it could happen. Some people think this will be cool. Trendy. With it. The future. Others think it will spell the end of civilization as we know and the end of critical thinking. Reading on a screen is not half as good as reading on paper. We need to consider this as we race towards a paperless future. Readers can see more at my "Zippy1300" blogspot somewhere in the bloggysphere.... Yes, I am not a Luddite! I screen, too, but I don't like it one bit!
#24 Posted by Danny Bloom, CJR on Tue 25 Aug 2009 at 08:18 AM
Interesting, but not nearly as interesting if you account for the EXPENSE side of the business; what about NET revenue? If the NYT is an example, with a budget of $1.3B, $1B of that is ppb + delivery... This is interesting, but perhaps only half the story.
#25 Posted by Scott Walker, CJR on Tue 25 Aug 2009 at 11:50 AM
There are a number of glaring holes in the article. First, is that it only uses subscribers rather than readers, which excludes those who buy at the newsstand. While that seems like it would tilt the scales further in the favor of print, because newsstand prices are higher, Ryan also uses gross rather than net profits. Sure it gives print nicer figures, but it also ignores the fact that print cost FAR more than a website. Also, to account for all of the papers printed that weren't bought, he would have to average the printing cost of ALL the issues (paper, ink, machine maintenance, etc.) over the total number of readers. Here, the inclusion of newsstand sales becomes a liability.
So, the NET profit of the TOTAL readership is the only meaningful comparison. Ryan wouldn't include those figures because they would be far less faltering--and possibly embarrassing.
Oh, and Mike, even CraigsList.com brings in "$100 million in revenue per year"
--http://techdirt.com/articles/20090825/0407055988.shtml
#26 Posted by Ed Coolidge, CJR on Thu 27 Aug 2009 at 12:39 AM
I'm not sure that I follow the response to Edward. The numbers at issue are calculated per person. Yes, newspaper sites have more content than your average one-person operation. But eyeballs are eyeballs. One reader in a blog's thousand-strong audience should be just as valuable to an advertiser as a reader of a legacy paper.
Having said that, the online per-reader numbers did seem high -- at least when compared to the kind of numbers that a low-audience operation would bring in. But if the numbers here are correct, then I don't know what would account for this.
#27 Posted by Chris, CJR on Thu 27 Aug 2009 at 05:36 PM
To me, the greatest mystery is why any media buyer in his/her right mind would pay 20 times the CPM rate (say $10 CPM for TV/Newspaper) for a media whose measurability/utility (vis a vis statistical sampling and laughably unreliable/untestable "ROI" measures) is almost unquestionably inferior to a media (a click is mostly a click and a purchase is certainly a purchase...) that costs .50 CPM (the internet - take a look at Blog Ads pricing...).
Why spend 20 times more for something of *lesser* reliability?
When transactions don't make sense economically - I start thinking corruption.
Imagine how easy and how extensive media buyer kickbacks are in the old line advertising biz (previously insanely profitable and incestuously clubby).
I think there is a major story to be told regarding just why CPM differentials are so huge in light of actual media reliabilities.
Now there is no excuse not to know the 50%+ of ad spend that is wasted...
#28 Posted by cas127, CJR on Thu 10 Sep 2009 at 04:29 AM
Scott and Ed, that's awfully obvious. But anyway, I included that in the post: "The boilerplate caveat: These numbers are revenue, of course, not profit. Production costs eat up much more of print revenue than they do of online."
Also, Ed-- Readership numbers are also in the text of the post and the chart, too.
All of these numbers include newsstand sales, but I mistakenly referred to "subscribers" up top rather than "units of circulation." I'll fix that.
Chris--if the average reader is seeing fewer pages and ads on one site, he is worth less to advertisers than another site where he see more pages and ads.
Cas127--Readers spend far, far more time with a newspaper's print edition than they do with its online edition. That explains much of the discrepancy in ad revenue
#29 Posted by Ryan Chittum, CJR on Thu 10 Sep 2009 at 03:48 PM
I'm glad to see this discussion is continuing. Great comments.
#30 Posted by Mike, CJR on Fri 11 Sep 2009 at 09:42 PM
To be honest I don't believe the numbers or formula given above are accurate. I'm a web developer at a local newspaper in Massachusetts. Using Google Analytics we get an average of 103,500 unique visitors per month and make upwards of $400,000 in revenue per year, which is considered superb for only 18,000 circulation.
Using the same formula given above; one of our online readers brings just below $4 to the table, where somehow the average is over ten times that amount. If our average online reader was worth $46 in online ad revenue our yearly online ad revenue would be nearly $5,000,000. Which would be astoundingly high and we would surely not be in the dire situation that most newspapers seem to be in.
Is my math off? I know the stats and revenue figure I provided are accurate.
So are there any local newspaper out there making a whopping 5 million a year from online revenue? Because if their are please let me know so I can give them a call.
#31 Posted by Anonymous, CJR on Wed 16 Sep 2009 at 11:50 AM
The NYT, according to what I'm reading, is debating how to erect a pay wall around the content it offers on its Web site.
Now, let's accept that the information offered during this discussion is accurate -- that print products generate much more revenue than their affiliated Web sites.
So, the core business newspapers have to protect and attempt to grow is their print products. And the fastest way to achieve this is to kill their Web products as they currently exist. Why? Because they are huge distractions, cost a lot of money, and decrease the value of their core business.
Of course, newspapers need to have a presence on the Web. But the products they offer should be fundamentally different than their print products -- perhaps video-based to compete with local TV. But they should be free because pay walls won't work; their primary purpose should be to enter a new market or drive people to subscribe to their print products.
Because this is where the money is.
#32 Posted by Mike, CJR on Wed 30 Sep 2009 at 10:55 PM
Anonymous,
Good point. I imagine most of the discrepancy is due to the fact that the individual online reader reads a multitude of papers on the Web. She shows up as a unique visitor at each site, but only counts as one unique visitor for the entire newspaper industry online. In other words, if you added up each site's unique visitors count it would be many times the 67.3 million total visitors per month referenced above.
So, that $46 is spread out across the industry, and doesn't just accrue to one paper. That's true, too, of print, of course, but the papers-per-reader number there presumably is far lower. I'm an unusual print subscriber in that I have three daily deliveries. But I surely run across a couple hundred newspaper sites in the course of a year (also unusual).
Also, you have an outsized online audience for a paper of your size, which means you probably have lower print revenue than the typical paper with a similar online presence. As I wrote in one of my comments above, upsells from the newspaper inflate online advertising, the market for which is actually much worse than the already-poor numbers indicate. If you have fewer print ads on which to upsell, you might have fewer online ads.
#33 Posted by Ryan Chittum, CJR on Wed 30 Sep 2009 at 11:53 PM
This is well known that cash can make people disembarrass. But what to do when one does not have cash? The one way only is to receive the business loans or just term loan.
#34 Posted by JocelynGrant, CJR on Mon 29 Mar 2010 at 06:03 PM
What about the expense side of the business? What is the cost per page of printing a newspaper, versus the cost per page of a web site?
#35 Posted by mattd, CJR on Wed 9 Jun 2010 at 10:21 AM