Download Free news online, a troubling story for newspapers

Free news online, a troubling story for newspapers
Print media executives are scrambling to find online business models that bring revenue and grow their
markets, says Brad Howarth.
The newly formed newspaper marketing group Newspaper Works has its work cut out if it is to succeed in
convincing advertisers its products are not old hat. In the same week that it announced its inaugural chief
executive, global media agency network Carat International predicted that internet advertising in the US
would overtake newspaper advertising by 2008.
The outlook is not so grim in Australia, where research company Frost & Sullivan has estimated the internet
will not outstrip newspapers until 2016. But the trend is clear, and newspapers are scrambling to ensure that
as much revenue finds its way from their print titles to their websites as possible.
Newspapers are being constantly challenged online by alternative sources, such as blogs and news
aggregators such as Google News and Digg.com. The latter site allows users to rate the news they are
reading, and the aggregate ranking is then used to determine which stories gain prominence, effectively
eliminating the role of editor.
According to the general manager for competitive intelligence at web ratings agency Hitwise, Michael
Walmsley, the challenge for newspapers is to generate more revenue from the online versions of their
content, given that consumers expect news online to be free.
"More and more people are going to those sorts of websites, and few people are going to the news and
media and print-type websites," Walmsley says. "When there is an event like the tsunami, people want upto-the-second news, and they are less fussy about the brand that it comes from."
In a presentation to the Interactive Marketing and Advertising trends (iMAT) conference in Sydney in late
July, Roy Morgan Research chief executive officer Michele Levine said that in terms of readership,
newspapers were in a state of flux.
Levine said that while readership of the print version of a John Fairfax Holdings publication, The Sydney
Morning Herald, was flat year-on-year from 2003 to 2006, when combined with online readership figures its
reach had grown by 13 per cent for the same period.
Similarly News Ltd's Herald Sun demonstrated an increase in its combined newspaper and internet reach of
5 per cent over the same period. A spokesperson for News Ltd suggested that the rapid growth of audiences
visiting websites was providing a rare opportunity for newspaper mastheads to dramatically increase their
reach, as shown by the low levels of duplication between readership numbers for print and unique visitor
numbers to masthead sites.
The challenge for newspapers is finding sufficient revenue online to support their existing production
budgets. The wide availability of free news services restricts traditional media companies from charging for
what they provide.
Less than 5 per cent of US daily newspapers charge consumers for access to their website.
In September 2005, The New York Times, in an attempt to gain some online revenue, launched
TimesSelect, a paid site containing exclusive content from the newspaper's opinion writers and columnists.
Most publishers rely on display and classified advertising, or have launched separate online brands
providing paid services around recruitment, real estate and personal advertisements.
The New York Times has been one of the most successful online newspapers. Its publisher, Arthur
Sulzberger, said in July that digital media generated revenue of $US200 million ($263 million) for the
company, helping to offset the $US200 million it spent each year on gathering news for both its print and
online publications.
Most Australian publications, including those of News Ltd and the metropolitan newspapers of John Fairfax
Holdings, make their news content available free of charge online.
The Fairfax Business Media group (publisher of The Australian Financial Review and BRW) requires users
to be subscribers before granting them access to online content.
In July, Fairfax Business Media relaunched its website for The Australian Financial Review under the name
AFR Access. The new site, which is available only to paying subscribers, adds additional services including
stock tracking and information feeds from non-Fairfax sources, and provides information on equities,
managed funds and property. It was built by Sydney-based company The Frame Group, and future
modifications to AFR Access will make it interoperable with popular share online trading services.
According to the publisher of Fairfax Business Media, Michael Gill, readers wanted something more than
just posting news content to the internet
"People wanted a product that does what the web does best, and that is how it personalises and customises
information," Gill says.
Screen grab
* Major newspapers have added to their readership figures when online readership is included.
* People are less fussy about news sources online.