Newspapers Warned About Online Migration Revenue Loss

09 March 2006

In a paper presented to the World Association of Newspapers by US media strategist Borrell Associates, publishers were warned of the danger of revenue erosion through readers' migration from newsprint to online media.

According to Borrell, publishers will need to recruit one hundred new online readers to replace the revenue lost by each and every reader who migrates from print to the cyber version of the same newspaper.

This is because - despite the online advertising bonaza - the revenue per reader for a newspaper website is far less than the equivalent figure earned by a print edition.

Borrell senior associate Vincent Crosbie told delegates to the World Newspaper Advertising Conference in Moscow: "As more and more people shift their news reading from print to online, the newspaper industry must dramatically increase its online advertising revenues or die. Some experts say the battle is already lost in America because newspapers did not move fast enough."

According to Crosbie's analysis, print editions of US newspapers earn between $500 (€421; £288) and $900 per reader annually, accruing from a combination of direct circulation income and indirect revenues from advertising.

"If American newspapers continue to lose 2%-16% of their print circulation each year, they will need to gain 40%-1,600% more website users just to stay even," he warned.

"Almost all American newspaper websites are free. Only 35 of more than 1,500 daily newspapers' websites charge for access. Most have tried, but discovered that readers will not pay. So, newspaper websites must get advertising revenue to profit."

US internet adspend is expected to overtake expenditure on telephone directories this year and will pass radio ad revenues during the next 12-18 months. It has already surpassed outdoor billboards and magazines.

However, some newspapers have successfully confronted the issue by combining their print and online sales operations.

That trend is reflected in Britain, revealed the Financial Times. Recently emerging from two years in the red, the FT has persuaded its largest advertisers to book combined newspaper and online ads, driving-up advertising revenues by 27%.

Data sourced from; additional content by WARC staff