As anyone who has paid attention to media issues knows, readers are moving online to get their daily news. And while the migration to the Web has been happening quickly for readers, a similar business model has not made the transition at the same speed. The Economist has a great series of articles examining the phenomenon, which incidently is happening all across the globe, not just in the United States.
Many companies have made great efforts to build advertising models online, but as I see it, they haven’t been robust enough to keep pace with the revenue that is disappearing from their printed pages. An excerpt from one of the articles: “How impressive are the results of these online experiments? At lots of newspaper companies, internet advertising is growing by at least 30% a year, and often more. At la Repubblica in Italy, for instance, the paper’s website gets about 1m visitors a day, nearly double the circulation of the printed paper. The value of online ads grew by 70% in the first half of 2006. For the first three months of 2006, the Newspaper Association of America announced that advertising for all the country’s newspaper websites grew by 35% from the same period in 2005, to a total of $613m. But to put that in perspective, print and online ads together grew by only 1.8%, to $11 billion, because print advertising was flat. At almost all newspapers the internet brings in less than a tenth of revenues and profits. At this point, says Mr Chisholm, â€œnewspapers are halfway to realising an audience on the internet and about a tenth of the way to building a business online.â€
“The big problem is that readers online bring in nowhere near the revenues that print readers do.”