A bit of research from Nielsen for the National Newspaper Association made the rounds online today. The headlines were pretty compelling: Newspapers are a big-time consumer destination on the web.
The results of Nielsen’s work are very impressive. In June, newspaper web site had 70.3 million unique visitors, each of whom visited an average of 8.49 times and spent more than 38 minutes on the newspaper site.
This should make newspapers feel good: the numbers tell a story of relevance and habitual use that support the claim that the newspaper franchise can shift its audience relationship onto the web. After all, web readership is higher than print readership.
The economic relationship? Well, that’s a whole different story.
Take a look at the chart to the right.
Newspapers had $34.7 billion of advertising revenue in print in 2008. Online revenue was $3.1 billion.
That means every print subscriber was worth $713.99 of advertising revenue each year. Each online user? $44.10 per year.
At these levels, newspapers would have to have 1.1 BILLION unique users to replace the print revenue.
The operating model for business-to-business media companies is quickly shifting to more distributed revenue, but the near-term profit outlook is challenges, as an accelerating decline in magazine advertising revenues is causing a fall-off in c
ontribution from the most profitable business line, a research report from the American Business Media association shows.
In 2008, magazines were off 8.4%, with the decline accelerating through the year.
Of the six key B2B media company revenue categories (Magazines, Custom Publishing, Data, Online, Tradeshows and Conferences), online revenue showed the strongest growth, increasing 15.1% in 2008 over 2007, and rising at a CAGR of 26.8% from 2006 to 2008. Magazines were the weakest performers, showing an (8.4%) decrease in 2008 versus 2007 and a decline of (3.9%) on a CAGR basis over the three‐year period.
Overall revenue business media companies posted a 2.2% decline in revenue and a 7.8% decline in contribution. Drops in magazine revenue drove all of the decline.
Except for magazines, all major B2B media company revenue categories increased on a contribution basis in 2008 and across the three‐year period of 2006 to 2008. Key magazine operating costs, including Ad Sales, Editorial and Production, have not declined in line with revenue, and therefore, have negatively affected magazine contribution, which decreased (26.8%) in 2008 versus 2007 and at a CAGR of (16.5%) from 2006 to 2008.
The decline has accelerated with the continued economic deterioration in the first quarter of 2009, and as ad pages drop, so do profits. The challenge is discouraging for these companies. They have laid out a framework for generating revenue through multiple platforms, but have to operate through rapidly declining margins in their biggest line of business.
via American Business Media – ABM.
