News Consumption Moves To The Internet, But That May Not Make It Profitable

The internet has become a more popular way to get news than the newspaper. The is the conclusion of a new Pew study. Local TV news remains in first place.

In rank order, people get news on a typical day from local TV (78%), the Internet (73%), radio (54%), local newspapers (50%), and national newspapers (17%). Almost everyone, the study says, gets news from multiple sources each day (92%).

The data is not necessarily good news for online news outfits.

Premium online content still has to deal with the “Murdoch problem.” The media baron has figured out that he cannot make any money by offering his news and entertainment free on the Web and make enough money from online advertising for it to be a good business. He expects many of his properties to  have “pay walls.”  Consumers who want access to the content will have to pay for it, not unlike HBO and other forms of pay TV.

Murdoch is not the only person who faces the issue of how to make money from online content. The average daily newspaper gets less than 10% of its revenue from the Internet. That is too small a portion of the costs it requires to run a daily publication. Internet versions of papers, magazines, and TV shows also steal some of the audience from traditiional media.

It is not clear that Mr. Murdoch can solve the “Murdoch problem.”  Some consumers will be put off by the notion that they have to pay for content from one of Mr. Murdoch’s properties. They may go elsewhere for their online entertainment and news. That leaves Murdoch without online readers who will pay him and he will have fewer readers to sell to internet advertisers.

Online news has reached the point it has strived to reach for years. It has become mainstream, and its has all the problems of mainstream media which includes how to make money.

Douglas A. McIntyre