Newspapers online – the real dilemma


Wow … how topical has the debate around newspapers and their livelihood in the future become?

Everyday the topic is being explored and right now the idea of micropayments or payments of some other kind are being thrown around as potential answers for an industry which is making minimal money in print or online.

For the newspaper and wider media industry the last 10 years have been a bit of a pain in the arse. Many have lost extremely profitable ‘traditional’ businesses to build unprofitable but seemingly popular digital businesses.

Last week Macquarie released this report around News Corporation – http://www.theaustralian.news.com.au/files/nws-note.pdf

The following line got me thinking …

“The gap between his online audiences and print audiences is closing, yet online revenue for newspapers is tiny by comparison to the proportion of readers who are now online …”

Maybe the idea of audience numbers being the key metric is potentially flawed.  Digital is often alleged to have ‘too many big numbers and too many small numbers.’

The ‘big numbers’ are these unique user figures we talk about. The ‘small number’s are the small response rates we tout. One figure is in the millions … the other is a tiny fraction of 1%.

Anyway – back to the comment “The gap between his online audiences and print audiences is closing, yet online revenue for newspapers is tiny by comparison to the proportion of readers who are now online”

This sentence isn’t incorrect at first glance. Generally when you look at pure user numbers larger numbers of people are using online news sources than print.

However, the issue isn’t with user numbers it’s with time spent using each.

The below 3 statements are interesting …

1/ The average Internet user spends around 56 minutes a month on ‘News’ sites. (12.6 minutes a week)

2/ The average Newspaper reader spends 12.4 hours a month reading a Newspaper (2.8 hours a week)

3/ If you look at the News category on Nielsen Netview there is no news site that users on average spend more than 60 minutes with PER MONTH.

— Figure 1 is from the 2008 Nielsen Internet and Technology Report. Figures 2 and 3 are from Nielsen Netview, April 2009.

It amazes me this figure isn’t looked into more when the industry looks for answers as to why their digital mastheads aren’t bringing in the big dollars.

So I propose the key issue isn’t the idea of extracting higher CPMs or payments for digital news …

The two biggest challenges to the newspaper industry online revolve around …
– time spent
– pages viewed/engagement

You want people to spend more time looking at your content, and you want them to consume more of it. Simple really and nothing new for any media provider.

Someone who should know told me if you work out revenue relative to time spent between newspapers in print and news online the figure is almost identical. ie … if print newspapers are bringing in 5x the revenue of newspapers online … then print newspapers users are spending 5x the time with the medium than they are with newspapers online.

This shows that the challenge has moved beyond the need for more unique users and more into the area quality engagement and higher consumption. Unique users as a KPI is weird … maybe it’s time we binned it.

For years we’ve tried to use it as a way of competing with other media but if we can’t compete with these mediums for time spent or engagement we’re probably short changing everyone involved including ourselves.

So this Macquarie analyst is effectively comparing apples with oranges. The gap is so large revenue wise because the gap is so large engagement wise.

This is maybe something worth more investigation across other areas and categories – namely music, video, sport and entertainment. Sure, the unique user numbers for digital are high but when you drill down into time spent it’s often low in comparison.

This isn’t a negative. It’s a really clear sign that more needs to be done to boost engagement in a micro sense if we really want to build revenues.

Let’s stop using engagement in a macro sense to pump up our own tyres and sell the medium. No one should care that Internet users spend 16.6 hours a week on the medium – they really should want to know how these 16.6 hours are made up and what they’re doing in a micro sense.

A question. If the average Internet user is spending 16.6 hrs a week online … and only 12.6 minutes of this are accessing news … what are they doing with the other 98% of their time online?

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9 responses to “Newspapers online – the real dilemma

  1. Oddly enough, that’s quite encouraging. At least it suggests a path back to profitability for news content providers – create an experience where people will stick.

    Mind you I’d love to see what the stats are like for UBs who aren’t on there first visit, or those who’ve come direct rather than via a search engine. I suspect the average times are hugely skewed downwards by one-off visitors randomly bounced to a site by search who view one page then vanish.

    Cheers,

    Tim – Mumbrella

  2. But I will never stick at a site that keeps flashing annoying videos over the text as I try to scan the headlines. To keep my attention they have to dramatically reduce the amount of advertising. Dinosaur media is in a lose – lose position.

  3. Pingback: Why people read less online than with print « Knowledge Workers

  4. I’ve seen similar stats elsewhere. One possible conclusion you could reach is the death of printed newspapers will mean people will consume considerably less news full stop.

    Something similar is happening with TV news as well.

    That other 98% of people’s time figure could explain why.

  5. Ben, great piece. had a look at Hitwise’s average and they’re around the 12-13minute mark for the sector at the moment too – perhaps the metric is the average per user, per site, as 60 sounds about right for a week

  6. Tim,

    good points, the news empires having control of the news has gone, as anyone can publish news online and take your viewers.Whilst we enjoy reading the print version of the news, its old news by tomorrow. Are we dumbing down the print version of news papers because we now get our news in bite size pieces online?

    So what are we doing with the 98% of our media time? reading blogs that interest us..

  7. Hi Ben,

    Just as an aside, there’s an interesting piece with Marissa Meyer of Google in the SMH today: http://business.smh.com.au/business/atomic-answers-for-the-newspaper-of-the-future-20090610-c3mx.html . She makes a very good point, talking about what online readers do when they get to the bottom of the page.

    It does raise the question of just how much time a reasonable person could comfortably spend with a news website in one hit if they were so inclined. My guess is not as long as with a paper.

    And how many clicks would it take to consume as much info as one can in a newspaper? A lot I reckon. Maybe PDFs are the future after all…

    Cheers,

    Tim – Mumbrella

  8. Great article Ben – sorry it took me so long to respond. There are so many fundamental points to study in the debate – the inability of online to create the same browsing experience of a newspaper or magazine is one. Another is that advertisers simply do not value online readers in the same way as they do in newspapers. I fear the future is one where we will simply see a lot less professionally produced content, as there will be no one to fund it. I really don’t see online content creators making huge amounts of money to fill in the cost of content creation – even after the costs of printing and distribution have been pulled out. Does anyone know how much money The Huffington Post makes? YouTube is apparently losing millions, and doesn’t create any of its own content. The future for established media companies across the board will involve making less money than they do today. Whether that leads to a poorer experience for consumers … who knows.

  9. Pingback: Why people read less online than with print | Knowledge Workers

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