{"id":2231,"date":"2008-12-08T13:00:17","date_gmt":"2008-12-08T13:00:17","guid":{"rendered":"http:\/\/adrianmonck.com\/?p=2231"},"modified":"2008-12-09T18:52:06","modified_gmt":"2008-12-09T18:52:06","slug":"online-audience-growth-solution-newspapers-problems","status":"publish","type":"post","link":"https:\/\/adrianmonck.com\/about\/2008\/12\/online-audience-growth-solution-newspapers-problems\/","title":{"rendered":"Online audience growth: not a solution to newspapers&#8217; problems?"},"content":{"rendered":"<p><span class=\"drop_cap\">T<\/span>here&#8217;s an interesting look at the problems of <strong>newspapers<\/strong> online by <strong><a href=\"http:\/\/metaprinter.com\/\">Robert Ivan<\/a><\/strong> at <a href=\"http:\/\/seekingalpha.com\/article\/109607-the-fundamental-problem-of-newspapers-on-the-internet?source=feed\">Seeking Alpha<\/a>, focusing on the <em><strong>New York Times<\/strong><\/em>. I don&#8217;t know about the assumptions &#8211; I&#8217;ve seen the cost of the NYT&#8217;s newsgathering put at $200m &#8211; and I&#8217;ve simplified it a little, but here it is:<\/p>\n<blockquote><p>Despite the highest readership of any newspaper in the United States, the New York Times only generated $330 million in online advertising in 2007. Total operating costs for that same year totaled $2.9 billion.<\/p>\n<p>It is widely reported that total newspaper operating costs would be reduced by 35% if newspapers eliminated their print product [is that assumption really right?]. Using the NYT example &#8230; costs could be reduced to $1.9 billion.<!--more--><\/p>\n<p>Online advertising in general is growing approximately 12% year over year. The <em>New York Times<\/em> is following this trend.<\/p>\n<p>NYT online advertising revenue is projected to be ~$350 million or $29 million per month.<\/p>\n<p>The NYTimes.com reaches an average 15.6 million people per month (quantcast) and newspaper websites in aggregate reached 69.8 million people (naa).<\/p>\n<p>65.4% of NYTimes.com readers come from the USA.<\/p>\n<p>NYTimes.com is reaching approx. 3.3% of the US population (15.6 million x 65.4%) =10 million\/(305 million)<\/p>\n<p>Revenue per person:<\/p>\n<ul>\n<li> $29 million month\/15.6 million unique monthly visitors = $1.87 per unique per month.<\/li>\n<\/ul>\n<p>Each unique reader is worth $22.40 annually in online advertising revenue (a far cry from the 1 subscriber = $1,000 which is what it was before the arrival of the internet).<\/p>\n<p>The gap to break-even is still a whopping $1.55 billion.<\/p>\n<p>If advertising rates stay the same, The New York Times needs to raise its unique audience 5.4 times in order to break even. Here is how it breaks down:<\/p>\n<ul>\n<li>5.4 x 15.6 million uniques per month =<\/li>\n<li>84 million uniques per month x $1.86 per unique =<\/li>\n<li>$158.6 million per month x 12 months =<\/li>\n<li>$1.9 billion annual online advertising revenues = Break Even NOT YET PROFITABLE<\/li>\n<\/ul>\n<p>Questions for further examination or the &#8220;Stalin Problem&#8221; (reality):<\/p>\n<ul>\n<li>Is it unrealistic for NYTimes.com to grow their national audience reach much more than 3.3% considering their print audience reach is ~1million or roughly 0.3%?<\/li>\n<li>Generating 84 million uniques per month would make NYTimes.com the number 5 website in the entire world, ahead of Wikipedia.org<\/li>\n<\/ul>\n<p>Preliminary conclusions:<\/p>\n<ul>\n<li>Pursuing online audience growth strategies to grow revenue may not be the best way to grow revenue<\/li>\n<li>Absent online advertising innovations, newspapers must seek alternative revenue streams to achieve economic sustainability.<\/li>\n<\/ul>\n<\/blockquote>\n","protected":false},"excerpt":{"rendered":"<p>There&#8217;s an interesting look at the problems of newspapers online by Robert Ivan at Seeking Alpha, focusing on the New York Times. I don&#8217;t know about the assumptions &#8211; I&#8217;ve seen the cost of the NYT&#8217;s newsgathering put at $200m &#8211; and I&#8217;ve simplified it a little, but here it is: Despite the highest readership [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","footnotes":""},"categories":[7],"tags":[2019,2018,2016,2013,1741,1946,2017,2014,2015,1475],"class_list":["post-2231","post","type-post","status-publish","format-standard","hentry","category-journalism","tag-advertising-innovations","tag-advertising-rates","tag-advertising-revenue","tag-annual-online-advertising-revenues","tag-newspapers","tag-online-advertising","tag-online-advertising-revenue","tag-print-product","tag-the-new-york-times-co","tag-united-states"],"_links":{"self":[{"href":"https:\/\/adrianmonck.com\/about\/wp-json\/wp\/v2\/posts\/2231","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/adrianmonck.com\/about\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/adrianmonck.com\/about\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/adrianmonck.com\/about\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/adrianmonck.com\/about\/wp-json\/wp\/v2\/comments?post=2231"}],"version-history":[{"count":4,"href":"https:\/\/adrianmonck.com\/about\/wp-json\/wp\/v2\/posts\/2231\/revisions"}],"predecessor-version":[{"id":2245,"href":"https:\/\/adrianmonck.com\/about\/wp-json\/wp\/v2\/posts\/2231\/revisions\/2245"}],"wp:attachment":[{"href":"https:\/\/adrianmonck.com\/about\/wp-json\/wp\/v2\/media?parent=2231"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/adrianmonck.com\/about\/wp-json\/wp\/v2\/categories?post=2231"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/adrianmonck.com\/about\/wp-json\/wp\/v2\/tags?post=2231"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}