Are we addicted to print?
A chart from Mary Meeker’s latest presentation shows that print is still a big source of advertising revenue, despite the move towards digital.
In the US advertisers spend a quarter of their budget with newspapers and magazines even though consumers spend less than 10% of their time with print.
Mathew Ingram says Meeker’s chart (below) explains media’s addiction to print but also shows why the print-based industry is so afraid of the future. Read the full Gigaom article here.
According to the Newspaper Association of America, total ad revenues fell 6.9% from $5.5 billion in Q1 2011 to nearly $5.2 billion in Q1 2012. Print ad revenues dropped 8.2% to $4.36 billion over the period. However, online ad revenues were up 1% to $816 million (online ad revenue accounted for 15.7% of total ad revenues in Q1 2012).
A recent forecast from ratings agency Moody’s said: “Revenue declines are relentless, and industry efforts to grow the digital business and reduce costs are not sufficient to offset pricing pressure and print volume losses.” Senior credit officer John Puchalla has given the entire newspaper business a ‘negative’ outlook.
This MediaPost article claims that publishers are struggling to fully monetise digital products. However, at a recent MediaTel Group Future of National Newspapers event, News International’s Dominic Carter was positive about the publisher’s digital paywall strategy.
He said The Times‘ digital paywall offers News International a sustainable future, which could not be achieved through advertising alone. Total paid-for digital subscriptions to The Times and Sunday Times now stand at 131,000 (a mix of contract and recurring monthly subscriptions).
Carter said that NI will be “a more successful business in the future for having paywalls”. A Poynter article claims that The Chicago Tribune‘s plans to charge readers for some of its online content in the US, along with McClatchy’s recent announcement that it will expand its paywall testing to four more sites, are “further proof that a majority of large newspaper companies now believe in some form of paid online content”.
According to the article, around 20% of the 1,400 or so daily papers in the US will charge for access to their online offering by the end of the year. More publishers are thought to be adopting paywalls to encourage a more loyal, engaged readership – and are using the opportunity because readers are becoming more accustomed to having to pay for quality digital content. Also, traffic to the websites does not normally drop enough to affect online advertising revenue.