US Online Newspaper Industry Continues To Grow
The US newspaper industry is seeing continued growth in its online counterparts, with online newspaper readership in March up by 31% year on year, according to a report for the Newspaper Association of America by Nielsen//NetRatings.
Online news sources are dramatically increasing in popularity with a recent survey by Merrill Brown for the Carnegie Corporation revealing that the US population is increasingly shifting to the internet as their primary source of news (see Internet Becoming Primary News Source In US).
Recent research from Jupiter Research confirms this migration to the internet, finding that in 2005, some 26% of adults claim to prefer to get their news online, compared to just under 20% in 2001.
In contrast, print newspaper circulation is on a much-publicised decline, dropping to its lowest level in the US since 1996. According to figures from the Audit Bureau of Circulation (ABC), daily circulation in the US has dipped by 1.9% in the 6-month period ending March 31, while Sunday circulation has lost 2.5% of sales over the last six months (see US Newspaper Circulation At Lowest Since 1996).
The concern for the newspaper industry is that most online news content is free and attempts to charge for it have largely been unsuccessful, with the Los Angeles Times being the latest paper to back off in an attempt to charge for some of its online entertainment information.
The Wall Street Journal remains the only major daily newspaper charging for content, reporting 712,000 online subscriptions for 2004. In the UK, the Financial Times offers a hybrid news site, charging for some online content with the rest remaining free.
Advertising on news websites is reported to have grown dramatically over the past couple of years, with the New York Times Digital showing internet advertising revenues to be up by 37.5% in 2004, compared with an overall advertising increase of just 4%.
However, a report published last year from the World Association of Newspapers claimed that although advertising on the internet will enjoy significant growth, it is set to remain a modest part of newspapers revenues for many years to come (see Newspapers Need To Be ‘Cleverer’ To Profit From Digital Content). The report suggests that publishers need to look for other means to make their websites more profitable, such as delivering news content that people actually want to pay for.
Online advertising expenditure as a whole is predicted to reach epic proportions, with Forrester Research forecasting the medium to hit $14.7 billion in 2005 (see US Online Ad and Marketing Spend To Reach $14.7 Billion in 2005). US analyst, eMarketer is slightly more conservative, estimating online adspend to reach $13 billion in 2005 (see Online Adspend To Hit $13 Billion In 2005), while Jupiter Research expects it to achieve a height of $16.1 billion by 2009 (see US Online Adspend To Reach $16.1 Billion By 2009).