Newspapers Losing Revenue: Time for a Change
March 30, 2012
Newspaper acquisition time? I was surprised by a headline I landed on while browsing Business Week; an article titled, “Newspapers Lose $10 in Print for Every Digital $1” grabbed my attention.
According to the article, newspapers in the United States lost $10 in print advertising revenue in 2011 for every dollar gained online. The article cites a study by Pew Research and blames the 7.9 percent ad revenue loss on competition from tech intermediaries. Newspapers are hurting tremendously in the online arena. Paid news sites and print copies are declining in revenue because consumers want their news fast and free, usually via mobile apps and free news blogs.
Newspaper groups have failed to capitalize on the volume of personalized data available online in the face of increased competition from companies including Google (GOOG) and Facebook, which are selling advertising targeted to consumers based on their interests and demographics, typically at higher ad rates, Rosenstiel said. Newspapers have slowly shifted their businesses online, led in part by the recent success of New York Times Co. (NYT)’s plan to charge readers for access to its newspapers’ websites. Pew’s study estimates as many as 100 newspapers are expected to offer a digital subscription model in the coming months.
No matter how one exercises ingenuity, the newspapers have a broken business model and a customer base indifferent to old information in print or online. Users are not likely to pay subscription fees, even for traditional and trusted organizations, if the material is available elsewhere for free. News groups should reconsider new business models or becoming partners with data-driven companies, or else it could be sell off and go fishing time.
Andrea Hayden, March 30, 2012
Sponsored by Pandia.com
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