Online Newspaper Industry Forecast To Enjoy Strong Gains
The online newspaper industry is predicted to enjoy strong gains over the next three years, with new research from US analyst, eMarketer, forecasting revenues to increase to $2.26 billion in 2008, up from $1.03 billion in 2004.
Online news is now seen as commonplace, and is increasingly being used as an information source. A survey done earlier in the year by Merrill Brown for the Carnegie Corporation revealed that the US population is shifting to the internet as their primary source of news (see Internet Becoming Primary News Source In US)
Findings from Jupiter Research confirms this migration to the internet, showing that in 2005, some 26% of adults claim to prefer to get their news online, compared to just under 20% in 2001.
Commenting on the report, Ezra Palmer, editorial director at eMarketer and author of Online Publishing: Focus on Newspapers said: “Although the US population is growing only marginally, and time online per user appears to be flattening out, consumption of online news is rising.”
Newspapers are shown to be benefiting from the healthy online advertising market, with eMarketer estimating that online adspend represented 3.6% of total advertising expenditure in 2004. The analyst projects this share to grow to 4.6% this year, rising to 7.5% by 2009.
Given these shifts by consumers and advertisers, eMarketer forecasts healthy year on year gains for online newspapers for the next several years.
According to research from Nielsen//NetRatings, more than a fifth of internet users who read newspapers now rely primarily on web editions (see Online Newspaper Sites Increasing In Popularity).
The findings showed that a significant 21% of web users who read newspapers have transferred their readership to online counterparts, while 72% of online users who consume newspapers primarily still access print editions. Just 7% of newspaper readers were found to spilt their time reading between print and online
At the beginning of the summer, Merrill Lynch, revised its adspend forecasts for the US newspaper industry, with estimates for advertising expenditure being lowered due to an uneven economy and an industry resurgence for the second half of 2005 (see Merrill Revises Down US Newspaper Ad Predictions).
Merrill forecasts newspaper adspend (print and online combined) to rise by 3.3% in 2005, revised down from 4%, based on uneven economy and an unlikely industry resurgence in the latter half of 2005.
New predictions for 2006 see newspaper adspend at 3%, down from 4%, based on slightly lower forecasted economic growth and more muted ad rate increases.
