Where is the Money?

Monday, September 26, 2011

In 2011 the revenues from online advertising overtook print advertising. This shift signifies that more companies are placing their faith in the future of the internet, yet for the newspaper industry most of their revenue still comes in from print advertisements. But according to an article on Reuters, 46 percent of Americans get their news online at least three times a week versus 40 percent in print.

Where are the online advertising dollars for newspapers?

According to that same article most online ad spending is in search advertising, little of which finances news. Even though newspaper advertising has dropped 46 percent in the past four years, it is still more than seven times the revenue of online advertising for newspapers. Thus the print newspaper is the financial backbone that allows the newspapers to expand and explore online options.

According to a new study by Pew Research Center’s Internet & American Life Project and Project for Excellence in Journalism, in partnership with the John S. and James L. Knight Foundation, readers are willing to pay for a print newspaper but not the online equivalent. 23 percent of respondents to a survey conducted for the above study say they would pay, but no more than $5 a month. A month of receiving the Seattle Times, for example, costs $22.40 a month. Only 5% of people who currently get their news online pay for the content.

According to the Reuters article, three dozen newspapers have moved to an online pay model. Of those newspapers, only one percent of readers opted to pay for the service.

This leaves a dark shadow hovering over newspapers. If the printed news no longer becomes profitable, can they find a way to survive online? Or will the world resort to dependance upon citizen journalists who blog and tweet about the news?

Photo courtesy of Creative Commons.


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