What We’re Willing to Pay for Online

16 02 2010

Forgive the USA-Today-style headline, but a new report from Nielsen on attitudes toward paid Internet content may offer some hope for a revenue stream for online news providers.

Nielsen surveyed 27,000 across 52 countries. The survey showed that about four out of 10 consumers would consider paying for online newspapers, and one in three would consider paying for Internet-only news sources. Nearly half would consider paying for magazine content online.

Those numbers may sound unexciting, but consider that news consumers probably make up a modest portion of the general consuming public Nielsen surveyed. It indicates that there is at least a market for pay-for-content in news, though maybe a reluctant one.

The survey results, however leave many unanswered questions about a business model for online news:

“Regardless of what systems they choose, media companies will almost certainly not abandon advertising; and consumers will doubtless still see ads along with paid content. For the 47% of respondents who are willing to accept more advertising to subsidize free content, that may be tolerable. Yet it will probably not sit well with the 64% who believe that if they must pay for content online, there should be no ads.”

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Deep cost-cutting, online revenue, help Times Co. stay in black

11 02 2010

But for how long?

The owner of The New York Times reported modest profits from the fourth quarter. But its stock fell 9 percent Wednesday with the announcement. The profits were based mostly on severe cuts, moderate earnings in online operations, and a moderation in advertising losses.

But the market knows that the cuts can’t go much deeper, and the outlook for the Times Co. depends on ad revenue increases this year. For last year, ad revenue in the Times Co.’s News Media Group, which includes the New York Times newspaper, the Boston Globe and the International Herald Tribune, declined 27 percent.

The company also is looking to unload its stake in the Boston Red Sox, which might improve the 1Q bottom line. But like its cuts in news operations, that’s a one-time gain that cannot be sustained.

The much discussed online fees won’t kick in until next year, so look for other drastic measures till then.





Blogging declines among under-30 set

4 02 2010

A new report on “Social Media and Young Adults” by Pew finds several interesting trends, the most pronounced of which is a decline in blogging.  Wirelessly connecting in general, though, continues to rise among teens and young adults.

Teens particularly disdain Twitter, to which those over 30 continue to flock. And in a bad sign for Facebook, users are now equally split between over-30s and under-30s. That finding  holds up in the sample of my household, where the half that is in college grows less enthusiastic about Facebook while the older segment finds itself battling obsession. We’re already seeing clear indications among the younger half that Facebook use is growing hopelessly passe.

The study shows that online activity is near saturation points among the under-30s, while I was surprised that far less than half of those over 65 are online. I’m sure that curve will flatten rapidly, but it still is cause for consideration in communications strategies aimed at wide demographic groups.





Searching for promising news sites

2 02 2010

Congratulations to the St. Louis Beacon for gaining mention in the Reynolds Journalism Institute‘s search for promising online news sites.

The Beacon is getting better all the time and is playing an increasing community role offline, as its principals organize and appear in panel discussions, events, and local broadcasts. That is indeed promising.

It succeeds by most of the  RJI’s measures of online news sites. However, the most promising new media will be those that are revenue-positive. The Beacon, established by a grant, is attempting to support itself through membership donations. If that works, it will be a promising prospect indeed.

RJI Fellow Michele McLellan is soliciting suggesting for other promising sites. Your thoughts?





Study projects dramatic shift of ad spending to online sites

13 11 2009

In a study presented today at the Yale Law School Conference on the Future of Journalism, two leading analysts of media economics say there is a wide gap between the ratio of adults who get their content online and the amount of ad spending online, and that gap is about to close. The implication for legacy news providers is dire.

Today, U.S. advertisers spend 8 percent of budgets online, while Americans consumer 30 percent oftheir content online.

If history is any indication, a more appropriate re-allocation of advertising dollars will occur in the not-too-distant future, and daily print newspapers, with declining readership and household penetration, are mostly likely to be losers.

Over the next five years, the authors say, traditional news organization must take the following steps to survive:

  • Shed legacy costs as quickly as possible
  • Re-create community online — in an attempt to regain pricing leverage
  • Build new online advertising revenue streams to replace the loss of traditional print categories

The authors are Penelope Muse Abernathy, who holds the Knight Chair in Digital Media Economics and Journalism at the School of Journalism and Mass Communication at the University of North Carolina, and Richard Foster, a former McKinsey & Company executive who is a now senior faculty fellow at the School of Management at Yale.