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How much money do newspapers make from online and how long does print have left? A session on newspaper business models at the FT Digital Me…

How much money do newspapers make from online and how long does print have left? A session on newspaper business models at the FT Digital Media and Broadcasting conference wasted no time in finding out the score for its panelists: John Ridding, CEO of the Financial Times and FT.com, says his business makes 20 percent of revenue from online while Tim Brooks, MD of Guardian News and Media, paidContent:UK’s parent company, said it was 15 percent for GNM. Guardian editor-in-chief Alan Rusbridger has already said he expects the company’s Berliner presses bought in 2005 will be its last — the presses have a shelf life of 25 years so theoretically 2030 is the switch-off date for The Guardian and The Observer in print. Brooks said he sees no reason to disagree with that while Ridding thinks print may be around for “a while longer”, not least because newspapers “don’t run out of batteries”. And what would Bloomberg Ventures founder and CEO Lex Fenwick do if he owned a newspaper? “I’d shut down the print edition today”.

FT.com gets less free: the FT‘s Ridding predicts a “happy digital ending” for newspapers, but said the answer will be found through subscriptions, not advertising. FT.com’s part-free business model has been much discussed, but the “free” part of that equation is shrinking: in October FT.com reduced the number of stories you can read without a subscription from 30 to 20 per month — Ridding said in passing that that number is now just 10 stories per month. The FT has always said 30 was a starting point that would be tweaked in future. FT Group profits rose 13 percent to £195 million in 2008 thanks in part to increased subscriptions, so the company appears to be seeing how far towards entirely paid it can practically go.

Guardian News and Media: One thing Tim Brooks wants is for the New York Times to put its content behind a pay wall. That would allow GNM to achieve its goal of becoming the “world’s leading liberal voice”, in other words, the most-read centre-left media outlet, within a year. Guardian.co.uk has just under 30 million unique users, according to ABCe, a third of which are in the US. Brooks admits executives within GNM have discussions about charging for content “all the time”, but the company’s aim is to expose its journalism to as many people as possible so it will stay free for now. The next part of GNM’s strategy is unveiled Tuesday when it announces plans to open up the company’s digital infrastructure to the world through an “open platform”. We’ll have more on that Tuesday morning.

Newspapers must adapt: Newspapers should cut their losses and go online right now, according to Lex Fenwick, who founded and runs Bloomberg’s business incubator division, Bloomberg Ventures. He told a separate session on monetising content that if a newspaper pressed stop on the presses today it would “cut costs dramatically” and develop its online edition, many of which are “not nearly as good as they could be”. The real competition to newspapers are online-only publications, professional blogs and social networks: “Twitter will be the best news feed on Earth. If you want to know what’s going on in the world right now, you should go to Twitter.” Fenwick’s advice, apart from killing print, is to leverage news sites against sites like Facebook, “create the greatest mobile site” and find ways to give readers not just news but things like data and useful apps. Bloomberg charges $1,500 a month for its news content, but also offers access to databases and exclusive software.

Disclaimer: paidContent:UK’s parent company ContentNext Media is a wholly owned subsidiary of Guardian News and Media.

  1. Seems like the decline of print-based newspapers and the shift of news to online free platforms is rapidly accelerating. The debate about what if anything newspapers can charge for is becoming more acute. From reading the above it seems to me that even GNM's previous hardline on keeping all content free (see http://www.penmaen-media.co.uk/index.php/2009/02/learning-from-the-guardians-web-strategy/) is maybe thawing? I work with magazine publishers who would do well to heed the warnings among newspapers; they have long developed subscription models but now need to up the pace. They would also do well to work out what content they can charge for (see some ideas here: http://www.penmaen-media.co.uk/index.php/2009/02/when-can-you-charge-for-content/). The gradual shift of the FT subs model – a little is free, but more you have to pay for – could well provide an interesting direction for more specialist publishers.

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  2. I've always thought news should adopt the High-Tech business model: expensive at first, cheaper later.

    Instead of putting content behind an all-or-nothing paywall, make it first available to subscribers (expensive), then drop it to free sometime after 18-36 hours.

    That way, information can be both expensive AND free.

    The price point never starts at 0 for high tech products. But it always ends up that way. News should be the same.

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  3. I still don't understand why newspaper business proprietors (and other bastions of old media for that matter) still don't understand the following:

    1. The Web is morphing into a structured and federated database
    2. Every business enterprise is a database curation business in disguise
    3. Database depth and quality matters
    4. The medium of value exchange has changed from TV, Newspaper, Radio to a digital imprint on the Web called a URI (a URL for People, Places, Events, and related facts etc.)
    5. Data is like "Wine"
    6. Pathways in, through, and across high quality vintage databases is how you maximize the real asset: Data
    7. Data is the new energy, so tap into it now!

    Subscription models applied to semi-structured content is not the way. The same goes for traditional obtrusive Ad models, both are completely broken.

    Basically, "Shrink Happens", but it doesn't have to be the business model, just the medium of value exchange.

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  4. Good riddance! I welcome the demise of traditional media. They've weakened democracy for decades by excluding alternative viewpoints but I did not truly realize what scumbags they were until they started running puff pieces on torture in order to sell the public on its "necessity". I'll be happy when their message is no longer received by the public.

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  5. First it was the New York Times, and now its the UK Guardian. Both have realized that they are sitting on treasure troves databases covering people, facts, and events etc..

    Shrinking the value exchange medium is in full progress across the newspaper industry.

    Read:

    1. http://www.guardian.co.uk/open-platform

    Kingsley

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  6. Robert Andrews Tuesday, March 10, 2009

    News isn't just about *stories* anymore.

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  7. Among U.S. newspapers, the share of online revenue in total revenue was about 5% from 2004 to 2007, and the share of advertising revenue in total revenue was about 70%. These two figures point to newspapers big problems.

    For the data, see
    http://purplemotes.net/2009/02/16/the-fate-of-traditional-print-media/

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