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ECommerceTimes.com

Newspapers Putting More Into Online Presence

By Susan B. Shor
Nov 8, 2005 1:45 PM PT

With yet another report of declining newspaper circulation, those within the business are wondering anew how long the print world can hold on or if the fleeing of news readers to other media sources can be stopped.

Newspapers Putting More Into Online Presence

The Audit Bureau of Circulation measured a 2.6 percent drop in weekday circulation for U.S. papers year-over-year in the six months ending Sept. 30. As the industry comes under more pressure to increase profits, some publications are maintaining their push into the online world and trying to regain the eyes their that their newsprint forefathers are losing.

Could Go Either Way

"Declines in print circulation are affecting how newspapers view the Web. How those effects play out depends on the newspaper," said Rich Gordon, chair for the Newspapers and New Media department in the Medill School of Journalism at Northwestern University.

"On the one hand, the decline in print circulation is increasing some companies' commitment to innovation on the Web," he explained to the E-Commerce Times, "because there is a recognition that now is the time to invest print profits in the growth opportunities available via the Web. But on the other hand, the pressure on profitability caused by declining circulation can cause some companies to try to maximize their online profitability, which means limiting the investment in online initiatives that build audience but don't generate profits in the short term."

According to the Newspaper Association of America (NAA), more than 47.3 million people -- or 32 percent of all Web users -- visited newspaper Web sites in September. That's more than any other month since the survey began in January 2004 and up 15.8 percent from the same period last year.

Online Staffing Grows

While cost-cutting measures to go along with the circulation decreases abound, the staffing at online operations has been growing again.

"Online staffs were reduced dramatically after the dot-com bubble burst; for several years, staffing levels remained relatively flat," Gordon said. "In the past year, staffing of online operations has been increasing slowly." But, he added, resource commitment has been growing for a longer period -- it's just harder to measure.

"Organizations' real staffing commitment to the Web, including time related to Web publishing spent by newsroom folks whose primary responsibility is for the print editions, has been growing for several years."

Accounting Quirks

However, Gordon cautioned that newspaper reporting of revenues and expenses from online operations can be deceiving.

"Most newspapers are not accounting strictly for all expenditures related to the Web. For instance, few are including rent or paying for content they receive from the print edition," he said.

"Also, a high percentage of advertising sales are bundled, meaning that advertisers are buying a combination of print and online advertising, and there is no agreed-upon standard for identifying what portion of a bundled sale is attributable to Web ads," Gordon continued. "These factors mean that many newspapers underestimate their real expenditures related to the Web, and overestimate the real revenues related to the Web."

So while the figures related to online newspapering are improving, the jury is still out on whether those sites will be able to make up for the declining hard copy readership and its corollary decline in advertising revenue, which is still for the most part linked to how many people buy the paper.


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