An interesting article from the Economist discussing the fall in newspaper circulation and largely blaming the BBC’s web site for this.
It is the success of the BBC’s news website that most troubles newspapers. Its audience has increased from 1.6m unique weekly users in 2000 to 7.8m in 2005; and its content has a breadth and depth that newspapers struggle to match.
Newspapers need to build up their online businesses because their offline businesses are flagging. Total newspaper readership has fallen by about 30% since 1990 and readers are getting older as young people increasingly get their news from other sources—principally the internet. In 1990, 38% of newspaper readers were under 35. By 2002, the figure had dropped to 31%.
It also mentions newspaper web sites like Guardian Unlimited.
Some papers are having some success in building audiences online—the Guardian, which has by far the most successful newspaper site, gets nearly half as many weekly users as the BBC—but the problem is turning them into money.
The difficulty for all newspaper websites is that most of their visitors tend to stay only briefly, viewing just a few pages. That makes it tricky to build a subscription model. Aside from specialised content, such as crosswords, or business news on the Financial Times’s FT.com, newspapers offer their content free. As for internet advertising, most of it goes to the biggest sites, such as Google and Yahoo!
Still, some papers are covering their online costs. The Guardian’s site is on the brink of making money. FT.com broke even at the end of 2002, after lots of investment, and the Daily Telegraph’s site started paying its way from 2002 onwards. But if the papers’ internet arms are to counterbalance the loss of revenue offline, they will have to start covering rather more than just their incremental costs.
I think we’ve reached the point where news is a commodity. Let’s face it, there’s thousands of sites that give adequate coverage, even if it’s just churning out the wire services like Reuters or AFP. So you’re unlikely to build a good subscription model with this much competition.Where the FT has succeeded is two-fold: firstly, it’s in a niche (or at least a less competitive sector of the market). And secondly, and more importantly, it provides insight and analysis, not just news. That’s where I think you can build a subscription model.To my mind, facts are just facts, but it’s the level of comment and interpretation that surrounds these facts that adds the real value. I think the way to get people to pay for subscriptions is to give them what my management consulting lecturer calls the “So What!?!?”To liken this to print media, it’s more like a news magazine than a newspaper. I personally like Der Spiegel for this.The difficulty is that it’s physically hard to read content on screen, and insightful pieces will have to be kept short and sweet to allow people to make the transition from paper to screen.
Here’s a simple way for websites to make money. Allow people to signup online to get dead tree versions of the paper shipped to them every morning.
Seriously, look at any online offering. Is there a dead tree sign up? No? What’s that you say, I’m meant to go find my local grotty newsagent and get *them* to deliver me a newspaper every morning? Not bloody likely.