Facing a steady decline in print revenues, news publishers have
struggled to build replacement revenue streams.For more than a decade,
online business models that rely on free access and directly-sold
display advertising have shown promise, but failed to deliver a
profitable business, especially in light of the traffic dynamics of
A recent report from the Columbia Journalism School, “The Story So Far: What We Know about the Business of Digital Journalism”, gives an excellent account of the history and current state of the industry, analysing existing and some emerging business models.
Online, newspapers have struggled to recreate the kind of loyal relationship with readers that they had in print. Print business models are built on production and distribution channels that are capital intensive and difficult to recreate.
The loyal readership enjoyed by many papers in past decades was driven by the quality of the product, but also by convenience and lack of alternatives. With the web, the cost of distribution is virtually nothing, and alternative sources are not only available, but also just as convenient.
Newspapers must now, more than ever, compete for readers based on the merits of their content. The Columbia report segments the online readership along a spectrum: from a select group of loyalists who consume a publisher’s content regularly, to the majority who stop by only occasionally.
Publishers have continued to struggle to make money from this majority audience, known in the publishing world as ‘fly bys’—or “one-and-dones,” or “side-door traffic.”
The report calls for publishers to strive to convert occasional users into loyalists over time. This makes sense in light of the industry’s print history, and given the industry’s long-time focus on ad models that simply don’t work that well for this “less-engaged” occasional user segment.
But there are alternatives that work to generate revenues from ‘fly bys’. While the web has opened up vast audiences, it has also made the cost of switching to a new information source virtually nothing. The average web user visits 89 domains per month, averaging 2,646 web page views per person per month, according to Nielsen.
More points of view are available to more people than ever before. The marketplace of ideas is bigger and more vibrant than ever. The shift away from loyalty is not surprising in a world with so many choices.
This is good for democracy, and indicates a shift toward independent, critical thought. Instead of bemoaning this trend, publishers should embrace it. The Internet is helping them fulfil perhaps their most important mission—to educate and inform the public on a massive scale.
High quality, fact-checked information is more crucial to consumers attempting to interpret the world around them. The Columbia report calls the occasional reader “less engaged.” This may be true from the perspective of any one individual publisher, but these readers are more engaged with news than ever. News consumption is up overall. Occasional readers view multiple sources, and resist efforts to have their opinions yoked to a single supply of information.
The occasional reader is highly engaged with news, just not a single publisher’s news, exclusively. As more people discover the breadth and quality of information available, this segment of readers will grow.
What’s more, younger audiences have grown up online, using aggregation services like Google News and social networks. They expect access to a diversity of sources and opinions, and they pick and choose the news they want.
This can be a triumph for democracy and an informed citizenry, unless publishers make the mistake of simply cutting them off. Mass loyal readership is a thing of the past online. What newspapers need now are ways to monetise and grow this important audience segment of readers who are more engaged with news than ever, but refuses to be tied to any single publisher’s content.
While online news has grown in popularity, newspaper publishers have been slow to adopt new forms of advertising that can make their online operations profitable now and into the future. They have been resistant to implementing the search-focused tactics that have made their leaner, meaner online-only competitors successful.
Perhaps years ago they didn’t need to bother, but now it’s more urgent than ever. Ironically, analysts and critics have gone so far as to compare newspapers who experiment with new revenue and distribution models to content farms, citing search-based advertising and SEO tactics that offend their aesthetic sensibilities. They claim newspapers are turning off potentially loyal readers in exchange for pennies earned from advertisers.
This is simply not the case. Innovative semantic ad models are working, and they make real money.
We know because more than 40 news sites are using our services to generate real revenue from so-called ‘disloyal’ and ‘unengaged’ users. Newspapers create quality, fact-checked, well-researched content, and they break stories that capture the world’s attention at a massive scale.
Now some newspapers are arming themselves with the advertising and distribution tactics that have proven successful for many online publishers, including content farms.
It’s about time. A broadly informed public with access to high quality information from multiple sources is worth it. A healthy democracy is built on a marketplace of ideas. We must stop calling for newspapers to remain complacent, shed our contempt for readers that exercise their freedom to choose, and encourage newspapers to adopt practices that can help them make their content available to the widest audience possible.
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