The economics of online news

Business Insider have put together an interesting tweetdeck entitled More Than You Ever Wanted To Know About The Economics Of The Online News Business — A TWEETIFESTO

Some interesting facts are that CPM rates (cost-per-1000-page impressions for advertising on a website) are $3-6 for a general news website and $10-20 for a business or premium website.

NewsCorp are to charge for online access to their news websites. That will eventually include both The Times which had almost 20 million unique visitors in December & The Sun which had 21 million. From these figures it might reasonable to guestimate their potential online revenue from advertising as somewhere between $1.2m per month (assumes each visitor visits 10 pages per month on average, and the lowest CPM rate $3 applies) and $81m per month (assumes each visitor read 100 articles per month on average and the highest CPM rate $20 applies).

I think their decision to introduce a pay wall and cut off their online content from open view is bizarre. In comparison to purely online news sites like Business Insider they actually have a distinct advantage. They can already easily segment their users into those who want to pay to read and own the whole paper, and those who would rather browse a few articles with adverts for free. Their real world newspaper division does this for them. Hiding Timesonline behind a paywall won’t have any major affect on the numbers migrating from purchasing physical newspapers to free online sources. The online, free-to-use news market will still exist & continue to grow – without them! They will have given up their place in it.

A Business Insider article, with the same title as the Tweetdeck, highlights some of the differences in structuring news for the web versus print journalism. Perhaps the best solution for dual medium news agencies is produce two different products – a traditional print newspaper & an online service – perhaps with shorter, snappier articles (blogs?), more interaction, that provides more up-to-date news?

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