Digital Publishing: Change in Newspapers’ Revenue Model

If you are still stuck on the notion that traditional news media organizations are transitioning to online digital publishing, then you are way behind. This is because the transition has already happened.

Almost 20 years back, no person imagined the print newspaper industry to be where it is today. However, the development and growing popularity of technology and the Internet, in particular, has changed the way newspaper-publishing companies do business. The transition has forced newspaper companies to go back and look at their business models and change them to suit the digital age.

Change in Newspaper Revenue

Previously, newspaper publishers gained their maximum revenue from advertising. However, since 2013, audiences have become a greater source for revenue than advertisers due to a user-first strategy used by companies and the World Press Trends estimates that this trend will continue for years to come.

In 2017, the newspaper and media houses generated US$150.2 billion, globally, from circulation and advertising combined. Out of this figure, US$67.8 billion came from advertising and US$87.2 billion came from digital and print circulation.

While the publishers’ focus is greater on the audiences and their needs, advertising still forms a major part of revenue for these companies.

Did Digital Publishing Come to the Rescue?

News portals got on the Internet as soon as the readers demanded it. The publishers gave the audience what they wanted without waiting for the entire industry to get on board. But, because of the crunch of time, they did not think about the revenue. However, they also did not predict that the audience would influence the revenue model instead of the advertisements, like before.

Advertisements on digital publishing sites consist of the banner and static ads. But these ads did not last long as they could be easily wiped out using ad-blocking software and they also took their revenue with them. New York Times has said that advertisements on the web is “always unpredictable and become more treacherous.” The entire situation has provoked the newspaper companies to fight against the ad-blockers.

While the industry is pushing from one side, the readers are pushing from the other side. Therefore, companies need new ways to generate revenue for their business to survive in this ever-changing world.

Was the Paywall model the answer?

While the advertisement model was failing, newspaper companies switched to the paywall model. If people have been paying for their print subscriptions, it makes sense for them to also pay for digital subscriptions.

However, all the audience is used to receiving free things on the Internet. Hence, people don’t always like paying and mostly don’t like being forced for it especially when they can receive the same thing from a different provider elsewhere.

Some newspaper companies have found a way around the paywall system. One thing is they do is that they provide the users with half the content and then they are asked to subscribe to have access to the rest of it. Another thing is the audience has access to a certain number of articles or content each month and they have to subscribe to gain access to more.

We can see that this paywall system is in the development stages. For some companies, this system has been successful like we see in the case of Liberation, a French daily newspaper.

So, what is the next step?

Now, you must be wondering that what can the newspaper companies do to earn revenue and survive in the industry. Let me tell you.

More than anything, publishers need to realize that print is still profitable and that the largest amount of ad revenue can still be generated using the traditional methods. Other than this, companies have many other ways of generating revenue like sponsored content or programmatic advertising.

While the companies are trying to figure out their revenue model, they all forget one thing in the process and that is the quality of content.

Warren Buffet has time and again stressed on the quality of content and great editors are the driving force. He has said that the company needs an experienced and dedicated team who care about the integrity and quality of the newspaper.

Many publishing companies lay off their editors and writers in order to cut back on their costs and generate revenue. While that may be a good approach, but the company also diminishes its value with it.

Final Word

With technology, there is only one thing that is constant and that is change. The change is inevitable but the good thing is that the possibilities are endless. On one hand, the day of print advertisements might be nearing their end, on the other hand, there is an opportunity to grow more than ever. So, what the companies need to do is stay flexible and adapt to the changes and they will stay afloat.

What do you think is the best way for newspaper companies to survive? Let me know in the comments section below.