Shifting business models

newspapers to online

Focus
How the business model has changed
Why the business model has change
The internet
Paywalls
The New York Times

Background
1702 the first English daily newspaper was

published called The Daily Courant

1830 number of newspapers published in

the US is 715
1856 first full newspaper ad published in the

New York Ledger

1870 5091 newspapers published in the US
Early 20th century - radio and TV news became

more influential

Background continued
1933 war between newspaper and radio

industries American newspapers try to stop radio

broadcasts delivering news unsuccessful
1954 more radios than newspapers
1967 digital production processes of

newspapers, including use of early computers

2007 1456 Daily Newspapers in the United

States
2009 worst year in print advertising revenue

big shift with newspapers moving to online

Very basic newspaper business model of old

Journalists employed to find and write-up

stories outgoing
Papers sent to print outgoing
Newspapers advertised outgoing
Copy sales revenue retail and

subscription - incoming
Display and classified ads - incoming

However
Circulation is decreasing in addition to

revenue from advertising

Problems the old business model faces

Increased competition from other formats radio

& TV still have many viewers/listeners

Economic recession double dip since 2008, not

much investment, people not willing to spend

Broadband subscription increasing June 2012

estimated population of the US 348,280,154 of

this, there were 273,785,413 internet users
Hard to find exclusive stories news breaks out

on social media

Internet competition the big one

News is available everywhere big

corporations like Microsoft and AOL now

provide news, for free.
Blogs provide specific news to audiences
Example TMZ broke the news of Michael

Jacksons death
http://www.tmz.com/2009/06/25/michael-ja

ckson-dies-death-dead-cardiac-arrest/

Switch to online
Online is becoming the format to read

news
Online magazines are constantly been set

up, as well as iPad and other tablet and

mobile devices The Daily (later pulled)
In the US, 65% of people aged 18-29 get

their news from the internet

28% of people from the UK and US access

news via their mobile every week

Switch to digital continued

The shift is taking place at different rates

varying business ideas and models US

far quicker to embrace and share content
than UK
Moving online can build greater online

audiences and can use cookies to target

content and advertising

The problem with the internet

Most readers spend far less time online

larger audience does not mean larger

revenue generation from advertising
Difficult to cash in on innovation

Why dont audiences pay for content?

People dont want to pay for content on

the internet nothing physical, hard to

adjust
In the UK only 4% of people said they

would be willing to pay for their news

website
The news will always be accessible

somewhere else for free

People in the US are far more willing to

pay again, different speed of shift

Paywall
What are they?
Hard paywalls The Times (UK) / Wall

Street Journal
Combination The Boston Globe
Soft The New York Times, Financial

Times

Does it work?
The Times (UK) and Wall Street Journal both

very secretive
NRS Padd survey found that The Times have

nearly 8 million print followers but only 675,000

online readers
The Times often makes things free for big

events e.g. Queens Jubilee

Financial Times fairly successful - first half of

2012 more people paying for digital than print

Case Study - New York Times

Founded in 1851
Americas most popular newspaper site
Largest local metropolitan newspaper in

the United States and third largest

newspaper overall
First implemented the TimesSelect

subscription program back in 2005

similar to paywall

TimesSelect

The New Paywall

Implemented soft-paywall strategy in

March 2011
Allows visitors to access 10 articles per

month before prompting them to subscribe

Their success far exceeded peoples

expectations
Have reached 640,000 paying subscribers

recently

The New Paywall

The company is expected to make more

money from subscriptions that from

advertising
Douglas Arthur, analyst with Evercore

Partners estimates total subscription

sales will top $768.3 million this year
($52 mil. More than advertising.)

The New Paywall

Barclays analyst Kannan Venkateshwar estimates that the paper will
have more digital than print subscribers in a few years

Underlying Problems with

Paywall
When we launched our digital subscription plan

we knew there were loopholes to access our

content beyond the allotted numbers of articles
each month. We have made some adjustments
and will continue to make adjustments to optimize
the gateway by implementing technical security
solutions to prohibit abuse and protect the value of
our content NYT cooperate communications Vice
President Eileen Murphy (Feb. 12, 2013)
There are still plenty of ways to avoid

paywall (Google chrome incognito mode,

Firefox Private Browsing, clearing cache etc.)

The New York Times conclusion

Although the paywall for The New York

Times seems to be working, we feel that

it is only a short term solution
The New York Times also has a long way

to go to close all loopholes in order to

increase growth and revenue on its
website

The future
The shifting model leaves uncertainty for

Newspapers and their future

http://www.telegraph.co.uk/finance/news

bysector/mediatechnologyandtelecoms/med
ia/9614953/Guardian-seriously-discussin
g-end-to-print-edition.html

What the theorists say?

By understanding identity and the relevant

relationships, journalists can create a platform

for their work that will have a meaningful
impact in the Web 2.0 era. Rachel Davis
Mersey
"Fifteen years after the commercial debut of

the Internet, publishers on average still

depend on print advertising and circulation for
90 percent of their revenues. Stop the presses
and newspaper companies are out of business.
It's just that simple. - Alan Mutter

What do we think?