Bacon's Rebellion

Democracy Thrives in Sunlight

Good News/Bad News for Newspapers

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by

James A. Bacon
in

Newspaper circulations may be declining but viewership of newspaper websites are soaring — growing at nearly twice the rate of the general online audience, according to data released today by the Newspaper Association of America. Reports the association:

An average of more than 59 million people (37.6 percent of all active Internet users) visited newspaper Web sites each month during the first quarter, a record number that represents a 5.3 percent increase over the same period a year ago, according to Nielsen/NetRatings NetView custom analysis. During the same time period, the overall Internet audience grew just 2.7 percent.

Said Shawn Riegsecker, CEO of Centro, a Chicago based company that works with interactive media agencies to facilitate online ad buys:

It’s no surprise newspapers are attracting online readers at this incredible rate. As consumers become more sophisticated in navigating the Web, they are turning to trusted sources of news and information, like newspapers, instead of content aggregators or portals. This couldn’t be better for the industry, as newspapers control more of this information than any other medium. As newspapers continue to invest in their digital properties and produce world-class content, I predict they will capture a much larger percentage of the overall online pie.

I suspect that Riegsecker is right. But there’s just one problem. Print newspapers generate considerably more revenue per reader than does online news. Internet-based news operations cannot support the same level of editorial overhead. So, I return to my usual tag-line:

Who will gather the news?

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8 responses to “Good News/Bad News for Newspapers”

  1. Toomanytaxes Avatar
    Toomanytaxes

    Jim, the news will be written in India. A local media outlet is considering the hiring of a reporter in India to report on events and proceedings before the Pasadena, CA city council.

  2. Anonymous Avatar
    Anonymous

    Have heard that Indian radiologists are interpreting X-Rays of U.S. patients sent by high speed broadband. Sounds good and cheap, but a U.S. doctor friend of mine says that the Indians screw up the Americanized spellings of last names and street addresses so the results of the X-Rays are sent to the wrong people.

  3. E M Risse Avatar
    E M Risse

    There is another problem:

    One of the main drivers of Mass OverConsumption is advertising.

    On newsprint, on radio waves or in bytes the end of consumption driving advertising will mean the demise of most ad revenue.

    The choice is ads or a sustainable level of consumption (aka, life as we know it.)

    Who will gather the news indeed!

    Citizens will gather the news for their Dooryard, Cluster and Neighborhood and trade endorsements of products as a substitue for ads to trade for news and information beyond their Neighborhood — that is in the Village, Community, Subregion, Region and beyond.

    You will recall our concept for citizen based media.

    EMR

  4. Anonymous Avatar
    Anonymous

    Jim Bacon –

    More mindless commentaries from
    you and your team …. the decline
    in newspaper readership simply
    reflects the public’s ability to
    get information quicker and in a
    form more appealing via radio,
    cable television, the internet,
    cell telephones, i-pods, etc. What
    we are watching is something not
    unlike what took place when the
    printing press was invented long
    ago … get into the 21st century
    Mr. Bacon, et al.

  5. doug Avatar
    doug

    Love it! When they can’t find anything substantial, they throw the pitiful insult of “mindless”!!!!

    Most intelligent people, long ago, dismissed the newspaper industry, for the Chamber of Commerce hacks they are. I can’t think of one Virginia Newspaper that actually practices any real “reporting”. They push viewpoints, they advocate positions, but they don’t “report” on anything. As anyone who is involved with local government can attest, there is no ‘local reporting’ in any newspapers. As far as the overhead of the “editorial staff”, they’ll always have jobs at VDOT writing the mismanaged agencies press releases. They’ve done such a good job so far, why not just keep them doing the same thing?

  6. Shawn Riegsecker Avatar
    Shawn Riegsecker

    Jim,

    Thanks for including my quote on the post. As for your comments, “Print newspapers generate considerably more revenue per reader than does online news. Internet-based news operations cannot support the same level of editorial overhead. So, I return to my usual tag-line: Who will gather the news?”

    Here’s an excerpt of a post to the NAA listserv I sent this week which discusses this:

    “There seems to be a bit of natural industry concern as it relates to overall revenue declining for the newspaper industry. Whether it’s a product of declining circulation or dollars leaving the newspaper due to changing media consumption habits, advertiser migration or online competition (i.e. – eBay, Craigslist, Monster, etc.), it doesn’t matter. And, frankly, it shouldn’t matter. Primarily, all that owners, investors care about is EBITDA/Net Income and net income margins. In fact, as an investor, I’d much prefer to see higher net income on lower revenues…it means I’m invested in a more efficient business.

    So, how does this industry get there? It means creating operational efficiencies across every single aspect of my company: management, sales, production, finance, distribution, operations, systems, technology, etc. What it doesn’t mean is to cutting editorial headcount. World-class, proprietary editorial content is the goose that lays the golden egg for the industry. It’s what separates the value of newspapers versus all of their competition; no one has ever been able to compete with this industry in content creation and no one ever will (assuming this industry makes the right moves). However, if the geese are killed, over the long-term, there will be no golden eggs.

    When modeled out over the long-term, putting one’s content free on the Internet is a very profitable business model. However, it requires a complete organizational overhaul of the institution everyone refers to as a “newspaper”. There’s no way around the fact that everyone needs to get comfortable with the idea that there’s going to be a heck of a lot less people in this industry ten years from now and a whole lot more systems and technology (same is true for advertising agencies). What will emerge is a leaner, meaner and more nimble industry operating at greater degrees of efficiency with its proprietary content and competitive differentiation still intact. That’s an exciting model and industry to be invested in.”

    – Shawn Riegsecker
    CEO, Centro

  7. Anonymous Avatar
    Anonymous

    It is a mindless commentary for today we have so many sources of
    information for the public to get
    news they want – thus the lack of
    need to depend on newspapers.

    We have eliminated our newspaper
    delivery to just the Sunday
    Washington Post – we like the special sections, book reviews,
    tv section, etc.

    Thus, we eliminate newsprint that just goes to the recycling bin and the need to go outside to pick up a
    newspaper on the driveway in a
    rain or snow storm – when the paper
    might be wet or not delivered.

    You don’t have those problems with
    cable, internet, radio or tv news … we think this is called progress … something the Bacon crowd fears… though bloggers are
    now another source of information
    today.

  8. Donn Downing Avatar
    Donn Downing

    For a short and pithy history of printing with contemporary meaning try http://www.intermentary.com/renaissance-computer

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