New revenue model elusive for US papers: study

Mar 05, 2012 by Chris Lefkow
Newspapers are displayed for sale in San Francisco, California. US newspapers are searching for a new revenue model in an era of falling circulation, declining print advertising dollars and free online competition.

US newspapers are searching for a new revenue model in an era of falling circulation, declining print advertising dollars and free online competition.

A study published on Monday suggests they have a long and difficult road ahead -- although there are a few encouraging signs.

The 16-month study by the Pew Research Center's Project for Excellence in Journalism looked at private financial data from 38 newspapers and included interviews with executives from 13 companies that own a total of 330 dailies.

On average for the last year for which they had complete data, the newspapers studied lost seven dollars in for every one dollar they gained in new digital revenue.

While revenue rose an average of 19 percent at the papers during that period, it did not come close to matching the revenue lost from an average nine percent decline in print advertising.

"In general, the shift to replace in print ad revenue with new digital revenue is taking longer and proving more difficult than executives want and at the current rate most newspapers continue to contract with alarming speed," the report said.

"Some (executives) predicted papers will continue to shrink, that more papers will close and that many papers will soon home deliver only a few days a week, perhaps only on Sunday," it said.

The newspapers involved were not identified but they were drawn from across the United States and included three dailies with circulations above 100,000.

The NYTimes.com Web site is displayed on a laptop in January 2010 after the newspaper announced it would begin charging readers for online content in 2011. US newspapers are searching for a new revenue model in an era of falling circulation, declining print advertising dollars and free online competition.

The study's authors said they did not examine digital subscriptions such as those charged by The because only a few papers have started charging online and it is too early to draw conclusions.

According to the study, there are currently 1,350 English-language daily newspapers in the United States, down from 1,400 five years ago.

The industry is making only "halting progress" in the search for a new but "some individual newspapers are faring much better than the industry overall and may provide signs of a path forward," the report said.

"The study suggests that the future of newspapers, rather than being determined entirely by sweeping external trends, can be substantially affected by company culture and management," PEJ director Tom Rosenstiel said.

One newspaper studied grew online ad revenue by 63 percent and bucked the general trend by growing print ad revenue by eight percent.

But seven of the 38 newspapers failed to grow digital revenue at all with one seeing digital revenue fall by 37 percent.

"Most papers are not putting significant effort into the new digital revenue categories that, while small now, are expected to provide most the growth in the future," the report said.

Mobile remains a largely untapped arena with advertising on mobile devices accounting for only one percent of digital revenue last year at the newspapers studied.

"No other subject during the interviews (with executives) seemed to generate as much enthusiasm as the prospects for mobile," the report said, although they "have not yet figured out how to mine it."

Most newspapers are also not yet putting major effort into selling customized digital advertisements, which the report said was "the category expected to soon dominate local advertising."

File photo of newspaper vending racks in San Francisco, California. A 16-month study by the Pew Research Center's Project for Excellence in Journalism looked at private financial data from 38 newspapers and included interviews with executives from 13 companies that own a total of 330 dailies.

"The majority of papers studied focus most of their digital sales efforts on conventional display (such as banner ads) and digital classified," which account on average for 76 percent of digital revenue but are not growing, it said.

In addition, print-focused sales representatives outnumber digital-focused staff by about 3-to-1, it said.

"To accelerate the transition to digital revenue, executives at nearly all of these newspaper companies agreed on one thing: Their advertising sales staffs needed to change," the report said.

Thirty of the papers studied have daily deals programs like those offered by Groupon but they accounted for only five percent of overall digital revenue last year and executives are sharply divided on their prospects.

Nearly half of the papers studied were trying to develop nontraditional revenue streams such as holding events, consulting or selling new business products but "in most cases, the dollars involved are minimal."

"Overall, the research reveals an industry that has not yet moved very far down the road toward a business model to replace the once-thriving legacy model -- even though overall newspaper has fallen by more than half in just a few years," the study said.

As for the future, "the people who run the industry are unsure of where it is heading or what it will look like," the study said.

"The dominant perception about the future is uncertainty."

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User comments : 13

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Squirrel
2.3 / 5 (3) Mar 05, 2012
Newspapers provide an enormous but remunerated benefit to society. Imagine newspapers stopped tomorrow--democracy would quickly turn corrupt and would be at risk. Newspapers make democracy work but they get nil payment for it. Modern western societies are going to have to be adult, recognize their is no long-term "revenue model", and find a way to fund (without involving political influence) a free press.
kaasinees
0.8 / 5 (25) Mar 05, 2012
We need free internet, not newspapers. Newspapers can be influenced and manipulated in many ways, and can persuade many people. With the internet you can gather a lot of data and compare them. What we need is free internet. Why do you think the gov around the world are pushing for ACTA/PIPA/SOPA whatever bills.

Have we learned nothing from WWII?
antialias_physorg
5 / 5 (2) Mar 05, 2012
Newspapers provide an enormous but remunerated benefit to society

Yes an no. The newspapers of old, which actually did INVESTIGATIVE journalism were a real control instrument (in a good sense and in a bad sense).
Today, most newspapers don't want to afford this kind of high cost expenditure, when they can just buy a low-cost news story off of AP, UPI or Reuters.

What we need is free internet.

Yes we do. But we also need people who are paid to do in depth research and fact finding - not just people who go to wikipedia and copy and paste stuff. A free interent won't automatically provide that.
kaasinees
0.8 / 5 (25) Mar 05, 2012
Yes we do. But we also need people who are paid to do in depth research and fact finding - not just people who go to wikipedia and copy and paste stuff. A free interent won't automatically provide that.

Not necessarily, when people of other parts in the world upload videos and photos, you don't need journalists who lie and deceive and spout opinions written for them by elites. As i said newspapers are easily influenced and manipulated. We don't need journalists citing scientific research either, we can see how that works out on physorg.
The last thing we need is a revenue model for newspapers.
antialias_physorg
5 / 5 (2) Mar 05, 2012
when people of other parts in the world upload videos and photos, you don't need journalists who lie and deceive and spout opinions written for them by elites.

And you think the 'elites' may not find individuals who upload videos and photos and doctored opinions for them? Much easier, say, than from an independently financed newspaper?
One which actually has something to lose if it comes to light that they have been bought to give an article a certain slant (e.g. by other newspapers)?

Now I agree that newspapers can be influenced. But newspapers that have worked long and hard for a reputation in impartiality (and whose revenue depends on people who value that impartiality - to the point of paying for it)? Much less so than an individual uploading some crap on youtube.

we can see how that works out on physorg

It bemuses me why you are then even here. Contradict yourself much?
kaasinees
0.8 / 5 (25) Mar 05, 2012
Much less so than an individual uploading some crap on youtube.

I have friends on facebook from Syria who upload videos and pictures of violence. I dont need other media telling me their opinions of what is going on in Syria, 80% what they tell us is a lie. Or are you one of those who really think Osama was killed under Obama's "command"?

It bemuses me why you are then even here. Contradict yourself much?

i don't even read 99% of the articles even if i am replying, on a rare case i see a well written article with an abstract paragraph or a summary. I find articles on sciencedaily well written and without opinions and speculation contradictory to physorg. I am here for the comments section.
ryggesogn2
1.6 / 5 (7) Mar 05, 2012
I have friends on facebook from Syria who upload videos and pictures of violence.

And why do you believe any uploaded photo is genuine?

Socialists wonder how a free market can be honest, trustworthy.

We see that the freer media market is grinding down as fewer people trust what is posted.
Anyone who can establish themselves as an honest broker, who can be known for trustworthy reporting will gain an audience and profit.
antialias_physorg
3.7 / 5 (3) Mar 05, 2012
i don't even read 99% of the articles even if i am replying,

That explains a lot.

I am here for the comments section.

What for? To be ridiculed? You're certainly getting a lot of that.
Or for the trolling? You're certainly doing a lot of that.

Do you even know why there is a comment section here?
Do you even know what a COMMENT section is FOR?

The sheer masochism of some people boggles the mind.
Vendicar_Decarian
5 / 5 (3) Mar 05, 2012
Well, one new revenue model for the Wall Street Journal is to pay Conservative organizations in Europe to take large numbers of their newspapers, thus boosting apparent circulation numbers.

it is a fraud of course, but then Conservative Fraud is rife these days isn't it?

And of course, the Wall Street Journal is owned by the same Fraudsters and criminals who have been caught red handed tapping the phones in england, paying off government officials, and threatening the families of murder victims in order to get details about the personal lives of their family members.

Conservative newspapers of NewsCorp must be so proud of their massively corrupt activities.

And then there is the lies that are regularly seen coming from America's Faux news.

jamesrm
3.5 / 5 (2) Mar 05, 2012
"democracy would quickly turn corrupt and would be at risk" Where have you been?

ryggesogn2
1.6 / 5 (7) Mar 05, 2012
"Donors have every reason to expect success, as the groups effect on many news organizations has already been profound. We were pretty much writing their prime time, a former Media Matters employee said of the cable channel MSNBC. But then virtually all the mainstream media was using our stuff.
Jim Rainey at the LA Times took a lot of our stuff, the staffer continued. So did Joe Garofoli at the San Francisco Chronicle. Weve pushed stories to Eugene Robinson and E.J. Dionne [at the Washington Post]. Brian Stelter at the New York Times was helpful.

Ben Smith [formerly of Politico, now at BuzzFeed.com] will take stories and write what you want him to write, explained the former employee, whose account was confirmed by other sources.

Read more: http://dailycalle...oGfm0x00

"
But then who watches MSNBC?
ryggesogn2
1.6 / 5 (7) Mar 05, 2012
Ratings:
FNC 1,155 280 538
CNN 346 117 149
MSNBC 573 160 264
CNBC 179 49 93
FBN 77 13 33
HLN 250 94 133
http://tvbythenum.../122744/
FNC has more viewers than CNN, MSNBc and CNBC COMBINED!

More reasons for the socialists to attack disparage the very people they claim to defend.
Howhot
2.3 / 5 (3) Mar 05, 2012
Of course R2, those numbers are measured using the old school methods of Nielsen ratings. I bet it doesn't include the Internet.
FNC though is a propaganda arm of the right. It's forced down viewers throats just like Rush Limbaugh is pushed to every AM station. I Hope he can demonstrate how to hold an aspirin so the ladies can learn from it.

Anyway the bottom line is, just because FNC is on top in the Nielsen, doesn't mean conservatism is as popular.