It would be hard to imagine the fictional newspaper men (and women) of the past like Perry White of the “Daily Planet” (Superman) hollering for their first quarter numbers of “unique visitors per month” or boasting about their ranking for “most-linked-to-news-outlets” or even deliberating about putting their content behind a “pay-wall.” Today these are just some of the relatively new terms being used to describe the various metrics and business models newspapers are exploring during this transitional period in which the entire industry finds itself.
For the last several years the forecasts for news organizations have been filled with doom and gloom. However the news about the news industry has been much rosier as of late. For starters, newspaper website’s traffic continues to grow. As highlighted in this Media Post article, online newspaper operations from the top 25 media outlets reached 83.7 million unique visitors in April, up 10 percent from March, 12 percent from February and 15 percent from January of this year, according to comscore figures released by the Newspaper National Network. And according to Nielsen, 74.4 million unique visitors per month in the first quarter of 2010 were a record – up from 72 million from the first quarter of 2009. These increases were actually higher than competitors like CNN and The Huffington post who came in at 43.4 million (flat) and 22.2 million (a 3 percent drop) respectively.
(For a list of the top 100 daily newspapers, 25 consumer magazines, 25 blogs, and the 20 social networks in the U.S., check out the updated 2010 Top Media List from BurrellesLuce.)
It is obvious from these figures that, as Google’s CEO, Eric Schmidt was recently quoted as saying, “Newspapers don’t have a demand problem they have a business model problem.”
As various business models continue to be tested, measured and debated within the industry, a silver bullet has yet to emerge. So far, it appears that several viable solutions are taking shape and depending on who you ask you’ll get a justification for each of them. According to this article on CNN.com, “Last year Rupert Murdoch, chairman and CEO of The Wall Street Journal’s parent company News Corp., said ‘The current free access business model favored by most content providers was flawed and contributed to a fall in newspapers’ revenues.’” The WSJ is currently behind a pay-wall and “he also claimed the Wall Street Journal had proved that charging for content could be made to work pointing out that 360,000 people had downloaded an iPhone WSJ application in three weeks and that users would soon be made to pay “handsomely” for accessing WSJ content.”
Alternatively, The New Times plans to use a metered system (EZ Pass approach) starting January 2011, where a certain number of articles would be free before demanding payment (similar to what Financial Times is currently using). This may solve their monetization challenge, but it will no doubt affect their “most-linked-to-news-outlets” rank, a measure used to track the amount of people who actually clicked-through to the original news organizations website via a blog or third party source. This could significantly impact results, with 99 percent of the stories bloggers include as links coming from traditional mainstream media sources. Interestingly enough, 80 percent of the stories linked to in online and social media come from only four news outlets: The New York Times (20 percent), BBC news (23 percent), CNN.com (21 percent), and the Washington Post (16 percent). The Wall Street Journal has twice the print circulation as the New York Times, but is not on this short list.
Some pay-wall advocates would argue that the majority of these visitors are merely “drive by users” who come in once through an aggregator and don’t really engage with the product. The counter argument claims more traffic directed to a newspaper’s online site would ultimately translate into higher advertising dollars.
If the numbers prove the demand for news content is there, let’s hope for the news industry’s sake the revenue will follow. In my opinion credible news journalism still trumps all. As long as it’s being distributed through the device of choice, engaged by the readers, and monetized in a way that generates revenue without isolating readers – it doesn’t matter whether it’s done through pay-walls, online advertising, or possibly something we haven’t thought of yet. (After all necessity is the mother of all inventions.) A tall order for the news industry for sure, but the future suddenly looks a whole lot brighter. There’s no doubt the identity of the news industry will change, but a reinvented news organization is still better than none at all.