News & Views
Reports of the newspaper’s demise are greatly exaggerated

Fears that digital media would kill the traditional news industry have been proven to be largely unfounded. The Washington Post recently stated that it intends to add more than 60 new staff members to its newsroom, growing it by 8 per cent, while the Wall Street Journal and New York Times have both recently reported healthy growth in subscriptions (no doubt boosted by the election).

The subscription model, normalised by platforms like Amazon Prime and Netflix in the arena of entertainment, is no longer seen as unreasonable to users when it comes to the news they consume on their commute. In fact, for many it’s preferable to ad-supported media; it is estimated that over 86 million people in the US will use ad-blockers this year.

“Ad blocking is a detriment to the entire advertising ecosystem, affecting mostly publishers, but also marketers, agencies and others whose businesses depend on ad revenue,” says industry analyst Paula Verna.

However, there are those who argue that ditching ads enhances the user experience and offers richer data to publishers. “The behavioural insight that comes with membership plans and paywalls helps newspapers move way from empty calories like slideshow page views toward more valuable engagement metrics like time spent,” says Tien Tzuo at TechCrunch.

At the end of 2016, only 37 per cent of New York Times revenue was driven by ads (down from 68 per cent in 2005) following its “crossover” into a digital-first medium. “The reader revenue/ad revenue ratio problem doesn’t apply only to legacy newspaper media,” says Niemen Lab’s Ken Doctor. “Almost all companies that depend on ad revenue for a significant majority of their income face big questions of growth in the next several years. Facebook and Google suck up as much as 90 per cent of all new digital ad revenue worldwide, and more than 60 per cent in the US. Everyone from BuzzFeed to Bloomberg Media confronts that reality.”

So if subscription-based publications are thriving, does this mean we should be mourning the end of the advertising industry instead?

Not quite. Far from being a death knell, the resurgence of the newspaper and the rise of reader-led revenues should act as a rallying cry to advertisers, a challenge to craft content that is compelling and creative.  “The best way for the industry to tackle this problem is to deliver compelling ad experiences that consumers won’t want to block,” says Verna.

And besides, advertisers haven’t been edged out completely yet. Retaining advertising as a source of revenue is “still vital,” says Doctor, who notes that stable reader revenue growth is “a goal only the national/global dailies have been able to achieve.”




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