Shifting business models
newspapers to online
Focus
How the business model has changed
Why the business model has change
The internet
Paywalls
The New York Times
Background
1702 the first English daily newspaper was
published called The Daily Courant
1830 number of newspapers published in
the US is 715
1856 first full newspaper ad published in the
New York Ledger
1870 5091 newspapers published in the US
Early 20th century - radio and TV news became
more influential
Background continued
1933 war between newspaper and radio
industries American newspapers try to stop radio
broadcasts delivering news unsuccessful
1954 more radios than newspapers
1967 digital production processes of
newspapers, including use of early computers
2007 1456 Daily Newspapers in the United
States
2009 worst year in print advertising revenue
big shift with newspapers moving to online
Very basic newspaper business model of old
Journalists employed to find and write-up
stories outgoing
Papers sent to print outgoing
Newspapers advertised outgoing
Copy sales revenue retail and
subscription - incoming
Display and classified ads - incoming
However
Circulation is decreasing in addition to
revenue from advertising
Problems the old business model faces
Increased competition from other formats radio
& TV still have many viewers/listeners
Economic recession double dip since 2008, not
much investment, people not willing to spend
Broadband subscription increasing June 2012
estimated population of the US 348,280,154 of
this, there were 273,785,413 internet users
Hard to find exclusive stories news breaks out
on social media
Internet competition the big one
News is available everywhere big
corporations like Microsoft and AOL now
provide news, for free.
Blogs provide specific news to audiences
Example TMZ broke the news of Michael
Jacksons death
http://www.tmz.com/2009/06/25/michael-ja
ckson-dies-death-dead-cardiac-arrest/
Switch to online
Online is becoming the format to read
news
Online magazines are constantly been set
up, as well as iPad and other tablet and
mobile devices The Daily (later pulled)
In the US, 65% of people aged 18-29 get
their news from the internet
28% of people from the UK and US access
news via their mobile every week
Switch to digital continued
The shift is taking place at different rates
varying business ideas and models US
far quicker to embrace and share content
than UK
Moving online can build greater online
audiences and can use cookies to target
content and advertising
The problem with the internet
Most readers spend far less time online
larger audience does not mean larger
revenue generation from advertising
Difficult to cash in on innovation
Why dont audiences pay for content?
People dont want to pay for content on
the internet nothing physical, hard to
adjust
In the UK only 4% of people said they
would be willing to pay for their news
website
The news will always be accessible
somewhere else for free
People in the US are far more willing to
pay again, different speed of shift
Paywall
What are they?
Hard paywalls The Times (UK) / Wall
Street Journal
Combination The Boston Globe
Soft The New York Times, Financial
Times
Does it work?
The Times (UK) and Wall Street Journal both
very secretive
NRS Padd survey found that The Times have
nearly 8 million print followers but only 675,000
online readers
The Times often makes things free for big
events e.g. Queens Jubilee
Financial Times fairly successful - first half of
2012 more people paying for digital than print
Case Study - New York Times
Founded in 1851
Americas most popular newspaper site
Largest local metropolitan newspaper in
the United States and third largest
newspaper overall
First implemented the TimesSelect
subscription program back in 2005
similar to paywall
TimesSelect
The New Paywall
Implemented soft-paywall strategy in
March 2011
Allows visitors to access 10 articles per
month before prompting them to subscribe
Their success far exceeded peoples
expectations
Have reached 640,000 paying subscribers
recently
The New Paywall
The company is expected to make more
money from subscriptions that from
advertising
Douglas Arthur, analyst with Evercore
Partners estimates total subscription
sales will top $768.3 million this year
($52 mil. More than advertising.)
The New Paywall
Barclays analyst Kannan Venkateshwar estimates that the paper will
have more digital than print subscribers in a few years
Underlying Problems with
Paywall
When we launched our digital subscription plan
we knew there were loopholes to access our
content beyond the allotted numbers of articles
each month. We have made some adjustments
and will continue to make adjustments to optimize
the gateway by implementing technical security
solutions to prohibit abuse and protect the value of
our content NYT cooperate communications Vice
President Eileen Murphy (Feb. 12, 2013)
There are still plenty of ways to avoid
paywall (Google chrome incognito mode,
Firefox Private Browsing, clearing cache etc.)
The New York Times conclusion
Although the paywall for The New York
Times seems to be working, we feel that
it is only a short term solution
The New York Times also has a long way
to go to close all loopholes in order to
increase growth and revenue on its
website
The future
The shifting model leaves uncertainty for
Newspapers and their future
http://www.telegraph.co.uk/finance/news
bysector/mediatechnologyandtelecoms/med
ia/9614953/Guardian-seriously-discussin
g-end-to-print-edition.html
What the theorists say?
By understanding identity and the relevant
relationships, journalists can create a platform
for their work that will have a meaningful
impact in the Web 2.0 era. Rachel Davis
Mersey
"Fifteen years after the commercial debut of
the Internet, publishers on average still
depend on print advertising and circulation for
90 percent of their revenues. Stop the presses
and newspaper companies are out of business.
It's just that simple. - Alan Mutter
What do we think?
