Lots of data to mull on charging for online content
An invite-only conference began today at the American Press Institute with a singular directive: “generating revenue from online content.” At the morning session, which just wrapped up, Greg Harmon of Belden Interactive and Greg Swanson of ITZ Publishing presented their survey of 2,400 U.S. newspaper executives. The cardinal finding, first reported this morning by Alan Mutter: 51% think they can successfully charge for content on the Internet.
I honestly have no idea what to make of that number, but there’s a ton of really useful data in Harmon and Swanson’s research, including some online revenue figures and in-depth traffic statistics for newspaper websites. The API has kindly posted their 80-slide presentation, which you can follow above.
If you do, the essential accompaniment is Bill Densmore’s liveblog of the presentation, below. (Densmore is a founder of CircLabs and the Media Giraffe Project.) You’ll also want to apply a helping of salt because ITZ Publishing consults for Steve Brill’s pay-for-news firm Journalism Online, which just touted the results as an “API study” without noting its business interest.
Here are some datapoints I found interesting:
— In nearly all markets, newspaper websites receive 2.5 visits and 10 pageviews for each unique visitor.
— “Core loyalists,” who visit a newspaper 2-3 times a day for 20 days a month, comprise 25% of unique visitors. Not surprisingly, then, core loyalists account for 86% of pageviews and are “overwhelmingly local.”
— Seventy percent of core loyalists online are also readers of the print edition (meaning they subscribe or they picked up a copy in the past seven days).
— Newspaper sites made next to no revenue from behaviorally targeted ads or local search advertising in 2008.
— Classified advertising accounts for 16% to 22% of online revenue for newspapers, though that’s expected to decline this year.
— Most newspapers are selling roughly half of their online advertising inventory, but small newspapers only sold 29% in 2008.
What to make of all that? Harmon and Swanson pursue several arguments that you can follow in the slides and Densmore’s notes. I think it’s particularly noteworthy that 70% of those core loyalists online are also print readers, but others can decide what that means for the newspaper industry.
Zachary M. Seward | Sept. 14, 2009 | 1:37 p.m.
Tags: advertising, Alan Mutter, American Press Institute, Belden Interactive, classifieds, Greg Harmon, Greg Swanson, inventory, ITZ Publishing, Journalism Online, local search, metrics, pageviews, paid content, print, Steve Brill, targeting, unique visitors
“51% think they can successfully charge for content on the Internet.”
Completely delusional.
I read a lot of news stories.
I subscribe to 2 newspapers and 20 magazines.
I will not pay for news online.
I was first struck by the disconnect between publishers’ view of how valuable and easy to replace their content and readers’ view of that. Scary stuff.
Reading deeper, I was interested in the division of the audience into fly-bys, incidental loyalists and core loyalists. The authors claim core loyalists drive 86% of page views. If that’s true, the subscription model becomes much more viable and interesting. But I’d really like to know more about the methodology before I’m convinced of it. And of course it goes without saying that given the Journalism Online connection, that slide will get a ton of scrutiny.
I am very nervous about the 70 percent number. To me, that means media companies are not doing enough to reach audiences that don’t already consumer their products.
On one hand, yes, it’s good to have a loyal audience. But if media companies want to grow audience we have to do a better job of reaching people outside of our core products as well.
If 86 percent of your traffic is driving by core loyalists, and 70 percent of them already buy the print paper, and most people argue that those who buy the print paper should automatically get some or full access to the paid parts of the online site, and only 30 percent of all users say they would buy the print paper if the online site weren’t free, what percentage exactly is the whole paid-content argument targeting? The argument changes from “Look at all these people reading us for free!” to “Look at all these people who already pay us for news, and look at that small group of people who we’ve never seen before and likely won’t again because they’re not from around here, and that other small group regularly reading us for free, most of whom will just go elsewhere if we charge admission.”
Jason, Jason, and Guy: I really like your thinking here about the 70% figure. It definitely adds some support to Journalism Online’s contention that news sites could retain 88% of pageviews after putting up a limited paywall. But at the same time, it means the market for paid news content may be quite narrow. Some existing print subscribers would no doubt also subscribe the website, and the Wall Street Journal has succeeded with at sort of up-sell. But the key audience, as Guy identifies, is the 30% of core loyalists who aren’t reading the print edition. That’s about 8% of unique visitors. And from there, the math gets completely speculative. —Zach