A recent report from the Bivings Group reveals that newspapers have gotten their online act together in a big way. For example:
- 96% use RSS (the vast majority of which use partial feeds)
- 92% use video, up from 61% last year
- 95% have reporter blogs
- 88% allow comments on blogs
- One third allow comments on articles (still pathetic, but headed right direction)
- 29% require registration
- 3% charge subscription fees.
The thesis of the report is that newspapers can use the Internet to make up for lost circulation and readership. This is no doubt true. What newspapers cannot use it to do, however, is make up for lost revenue.
Put differently, the big problem for newspapers right now is not readers–it’s revenue. A “unique user” online generates a fraction of the revenue and profit that a newspaper subscriber or reader does offline. Although the value of a unique user will continue to rise as advertising dollars flow online, it will almost certainly never approach the value that newspapers generate offline (in part because so many of the dollars spent in offline papers are wasted).
How do we know newspapers are screwed? Because newspaper companies like the New York Times have already built awesome web sites. Despite having vastly extended the paper’s readership and reach, however, and despite having free access to all of the printed paper’s content and resources, the sites generate only a small fraction of the revenue of the company’s print operations. (10% in the case of the Times).
As a stand-alone company, the New York Times Online has wonderful prospects. Alas, it will never do well enough to support the dying print elephant it is carrying–the one that is currently producing most of the site’s content for free.