Online-only newspapers 'may lose more than they gain'

NEWSPAPERS that ditch their print editions to go online-only may be jumping the gun unless they are in dire financial straits, according to a study published today.
Researchers from City University in London suggest that many newspaper publishers are likely to lose more than they gain if they cease distributing their printed products in favour of the web.
Their study focused on the fate of Finnish financial newspaper Taloussanomat, which axed its printed version and went online-only in December 2007. The decision was made after the title suffered severe losses – but even going online-only failed to lift it out of the doldrums.
After the move was made, the Finnish title's costs fell by 50% – but its online readership declined by 22% and revenues dropped by more than 75%.
The net result was that the publication's owners were no better off after dropping print than they had been previously.
According to calculations based on the Finnish case, a publication would need its costs to significantly outstrip its income to make online-only an attractive option.
"Only if your income is 31% or more lower than your costs, based on this case at least, would you be better off going online-only," said Neil Thurman, senior lecturer in electronic publishing at City and one of the study's authors.
"I don't think it can be dismissed as an aberration," added Thurman. "What we're saying is that unique users were down and page impressions were down ... You can definitely say they underperformed."
A number of factors were apparent in the Finnish title's failure to capitalise on its move to the web, Thurman said.
"Just having the print product out there on news stands does promote the website. They also cut their newsroom staff, and so the quality of content did suffer.
"But probably the most important factor is that it's a different medium that is used in a different way. You might spend one and a half minutes a day with the brand online, instead of half an hour a day with a printed product."
In recent months, a number of high-profile titles around the world have announced their decision to drop print editions as they struggle.
In America major newspapers including the Seattle Post-Intelligencer and the Christian Science Monitor have gone web-only, while in Britain, Maxim and the Ecologist are among the magazines that have followed the trend.
Evidence about those changes has yet to prove conclusive, but Thurman said he doubted that many titles were doing so badly that going web-only would be a solution.
"If you look across the board, US newspapers are still reaping profits in the mid teens," he said. "Sometimes it's spin because they are in dire straits – it's often dressed up as a strategy when it's actually the only option you've got left."
The study, Taking the Paper Out of News, is being published in Journalism Studies and is also available on the City University website.

Source: guardian.co.uk