Newspaper economics: online and offline
Hal Varian, Chief Economist at Google, has put together a solid summary of the current economic challenges facing traditional newspaper organizations.
You may have come across some of the data in bits and chunks over the past few months, but his slides consolidate what you need to know.
Depending on your position in the news space, you will have your own takeaways… my takeaways:
1. Online ad revenue for newspapers is only about 5% of total ad revenue - imo big upside for news publishers to pull ad budgets online. Can they do it? So far it’s not happening.
2. Time spent reading (scanning) online news is about 1 minute per day for the average person - imo most people are reading during the day while at work for a quick hit, but sites are still repackaged newspapers not intended for a quick hit experience.
3. Leisure reading happens weekends and outside of work hours while people are on the move - imo newspapers should double down fast and start creating the next “weekend” reading experiences for tablet and mobile devices.
4. 14% of costs as a percentage of revenue are from editorial activities - imo this is the shining light for the future of media and in particular news. 86% of costs as a percentage of revenue for newspapers are NOT related to content creation, drop that anchor and you have a whole new economic reality for news distribution.
I remember a conversation I had about 5 months ago with a former online editorial director of one of the UK’s big four newspapers…
me: “what does your ideal news organization look like?”
him: “Small office with cheap rent. 6 guys. 3 editors, 2 programmers, 1 sales guy. Outsource all content creation to freelance text, audio and video journo’s. Start with mobile content creation first and work backwards to the desktop browser if we even make it there.
me: “as long as all of you are analytics guys as well and using our publishflow™ analytics service, I am on board”
Enough from me, let’s hand the floor over to Hal Varian from Google…
Posted under Analytics, News Publishing, Newspapers, ipad, publishflow™
