The struggle for large daily metropolitan newspapers to stay profitable and survive is based on the race between the drop in their print advertising and the improvement of their online sales. Newspaper industry costs are rising along with fuel and commodities prices. Most large dailies have resorted to lay-offs. Even The New York Times and Washington Post are cutting staff, including reporters and editors.
Revenue is falling sharply based on a review of the numbers from publicly traded newspaper companies. The sole exception may be The New York Times Company, where online revenue is now well over 10% of the total. In April, NYT online ad revenue rose almost 26%. The company claims its collection of web properties had the 11th largest number of online visitors in America, with over 49 million unique visitors in April. Gannett’s sites rank in 36th place with 23 million unique visitors, but most newspaper companies are not as lucky. Even The Washington Post was only able to generate $27 million in online revenue in the first quarter. This was a very modest increase of 8% over the same period the year before. This revenue compares to $206 million in total sales for the newspaper division during this period. That spells trouble, no matter how Wall St. looks at it.
Because online versions of major newspapers are certainly the key to future revenue growth and profits, 24/7 Wall St. looked at the websites of the top 25 newspapers in the US based on their circulations as of March 31, 2008 taken from the Audit Bureau of Circulations.
The sites got ratings of “A” through “F” based on: 1) strength of content, 2) ease of use and navigation, 3) use of new web technology including comments sections, message boards, and multimedia, 4) lay-out 5) presence of a strong set of current advertisers, and 6) the size of their audiences based on measurements from the Compete website visitor database for April.
The most important conclusion from this review of online newspaper sites is how uneven the quality is from property to property. Some of the smaller papers which probably have modest resources have done an extremely good job of engaging readers, using the best tools of the internet, and putting up content which adds to the experience of the subscriber to the physical newspaper. Some of these sites are likely to draw multiple visits from the same person throughout the day, the Holy Grail of online content behavior. Other sites seem to be designed to keep readers away. There is clearly not much benchmarking going on in the online part of the newspaper industry, and with the increasing risk that more newspapers will fail,not using a standardized measurement of excellence for improvement is a real shame.
The Wall Street Journal and USA Today rank among the top 25 newspapers, but they are not included here because they are national properties and have access to corporate budgets which may not be available to most of the websites reviewed. It is safe to say that WSJ.com is as good if not better than any other online paper. It has invested huge sums, successfully, in interactive features, the use of blogs, reader response tools and multimedia features from video to charting. It is not, however, a general daily paper. It is a financial publication. News Corp, which owns that paper, is out to change that to some extent, but the metamorphosis is in its early stages.
The final judgment of a newspaper’s online edition is whether, using the advantages of the internet, is it better than the paper itself. As one industry expert told 24/7, “The strength of a newspaper web site is its ability to present almost endless information, far more than it could ever afford to print. The best newspapers take advantage of this by explaining in their print editions where additional information on a particular subject can be found — the full text of a speech or a court document, for instance.”
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