Can This Business Be Saved?

The beleaguered newspaper industry, losing subscribers and advertisers like spring runoff down a steep mountain, has built a solid presence on the Internet and is banking on Web advertising to secure its future. But while such revenue has more than doubled in the past four years, it may be too weak a financial platform to support the heavy costs of old ­media.

After years of healthy increases, the Internet audience is barely growing, and while newspaper websites draw a lot of traffic, visitors click on the sites to glimpse the offerings, rather than ponder them. The typical visitor to nytimes.com, a site that attracts more than 10 percent of the industry’s Internet customers, spends about 68 seconds a day reading the paper online. And that is a far more leisurely visit than the typical newspaper site receives, notes Paul Farhi, a reporter for The Washington Post who writes frequently about the ­media.

The buoyant growth in Web advertising that has sustained the hopes of newspaper publishers in recent years has begun to evaporate. The rate of advertising growth started on a downward slide in 2007, and a worsening economy means the de­cline will likely ­continue.

Most at risk are local newspapers without a national brand name. Their traffic is decreasing, sometimes sharply, as they face tougher competition from local television stations, which can quickly post video clips of breaking events and flog their web­sites relentlessly on air. Publishers who have enjoyed near-monopoly status in their communities now face literally millions of competitors on­line, though most of the challengers don’t offer the range and depth of the smallest local ­newspaper.

Despite experiments with online “pay-to-read” news stories, partner­ships with Internet giants, and inventive new categories and compilations of news, nobody has figured out a model that will permit newspapers to support the costs of gathering and presenting the news with the revenue generated from Internet advertising alone, Farhi says. One idea is to use the advanced technology available on the Web to target both news and advertising to readers whose viewing habits reveal an interest in certain topics. The challenge is to identify and post these features ahead of the competition. The 24-hour news cycle of journalism’s glamour days used to seem frenetic. Now that’s the speed of ­sludge.

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The Source: "Online Salvation?" by Paul Farhi, in The American Journalism Review, December 2007-January 2008. 

Photo courtesy of Flickr/Zarko Drincic