Google Chief Economist Hal Varian gave a keynote speech recently at the International Journalism Festival in Milan, Italy. He cited that the traditional newspaper industry has been in a state of decline since 1972 and that modern day news websites are eroding them further. The one bright spot in the future of the newspaper is the digital edition via tablets.
Citing a Pew Foundation study, Varian pointed out that tablets are the preferred electronic news reading medium for mornings and evenings—during which readers spend the most time absorbing the news—beating out both desktop and smartphones for those periods. Ad revenue depends on the amount of time spent reading the news, he said, and therefore the proliferation of tablets will help the online newspaper industry to gain a new foothold for the first time in 40 years.
“Subscribers to physical newspapers spend about 25 minutes a day reading them,” Varian said. “The typical time spent on an online news site in the US and UK is about 2-4 minutes, roughly one-eighth as much. Interestingly, newspapers in the US make about one-eighth of their total ad revenue from online ads.”
Newspaper companies these days are competing against very niche specific tech blogs, like Good e-Reader. You would be hard-pressed to find the kind of cutting edge digital publishing and eBook news, as you would find on our website. If you take into account hyperlinks, videos and multimedia, you can see why newspapers are being eroded. The startup costs involved in setting up a pure digital publication dwarfs a physical newspaper company, where half of their costs are derived from production and distribution.
The most fundamental change newspaper companies have to make when going digital is the amount of time readers are engaged. More time reading the newspaper online translates into more online ad revenue. Doing this requires two things: capturing the user interest during the day by reporting fresh and interesting news, and encouraging readers to follow up later on when they have the time to devote to a more in-depth analysis.
Encouraging readers to scan the headlines, the sports scores, and the finance pages to locate the stories they are interested in will ultimately lead to more engaged readers. Those quick glances during the day can translate into loyal readers and increased revenues later on if, and only if, the newspapers can satisfy both the demand for timely reporting along with the demand for in-depth analysis of the news stories of the day.