Newspapers' 'Near Death Spiral,' Courtesy Web 2.0

Just as newspapers start to figure out how to make some revenue via the Internet, Web 2.0 is changing the rules and further fragmenting their diminishing audiences.

Forrester Research details the impact that blogs and RSS feeds are having on newspapers in a new report The Fragmentation of Yesterday’s Newspaper.

According to Forrester, 43 percent of US online consumers say they have viewed personalized content on a portal home page or RSS reader in the past 12 months, with Gen Y (ages 18-27) and Gen X (ages 28-41) consumers leading the trend.

RSS feeds generally don’t contain ads and, depending on the format, may not require the user to click through to the Web site to read the whole story, so while newspapers are right to offer consumers the convenience of RSS subscriptions, they also may lose out in generating revenue from those consumers.

Blog content consumption mirrors RSS, with less concentration on news. Nearly half (47%) of US online consumers say they read blogs, again with younger consumers leading consumption. Newspapers enjoy a wider reach when bloggers pick up their stories — and may benefit from better placement in search when bloggers link back to newspaper sites — but they can’t generate ad revenue if a consumer reads their story on a blog rather than on the newspaper’s own Web site.

Forrester offers a number of short-term reccommendations for optimizing newspapers’ current businesses, but says far more radical changes are required for long-term survival. Here’s what Forrester sees happening in the next three to five years:

• Print’s decline accelerates in a near-death spiral. The inability of print newspapers to provide a high level of accountability to advertisers, combined with falling circulation as consumers abandon their subscriptions for content they can get elsewhere, will lead to print becoming a cost center rather than a profit center for newspapers.
• Cross-media ownership becomes essential. Long-term survival requires rethinking the print newspaper island and building bridges to adjacent media.
• Content gets produced for multimedia, multichannel distribution. Not only will surviving newspapers produce content that’s multimedia; they’ll also produce it with the intention to distribute it across multiple channels — their own Web properties and other Web properties via widgets and RSS, as well as mobile devices, TV, and radio.
• Portals supply the inventory, technology, and efficiency that publishers lack. Newspapers will heavily rely on portals like Microsoft and Yahoo! to bolster their online advertising capabilities.
• Audience insight fuels solution selling. Newspapers will need to provide deep customer insight that establishes their customers’ value to advertisers and shows how access to those customers can solve a specific problem for advertisers, such as lead acquisition or brand awareness.

Comments

[John Pseudonym:]

Paper has 15 years tops to figure out how to make money without printing anything.

The subscription is dying off everyday and the next generation is not going to subscribe to a printed paper.

My local paper spent $30 million modernizing their presses and facilities just 5 years ago...I knew that was a huge mistake...they figured color pictures or readable print would save the business...LOL

2008 Jun 17 11:02 PM

[lakeside:]

I'm a newsaholic and I have quit subscribing to all print media except Wall Street Journal - something to read with my daily coffee and doughnut....but that's it. Down from four or five magazine and three newspapers to one WSJ.

2008 Jun 17 11:50 PM

[JMJ:]

I am 57 y.o. and retired. Up until 2008 I subscribed to newspapers the last 30 years. Because of what I consider high cost subscriptions, I went to the internet for all my news, information and advertising. I have 3 daughters who will never subscribe to newspapers due to internet exposure. As for myself, I was receiving the newspaper 7 days a week, now my city newspaper is offering a 4 day plan I will probably go back to for a much reduced price. I know reduced rates are not the future for newspapers, and readers like me are not the future of newspapers survival. But I think we do represent a base that will contribute to newspaper survival for many more years to come. When I dropped my newspaper subscription in January 2008, my reason given was high cost of subscription. My reason for considering going back to the newspaper is reduced rates and my personal need for news and information offered in the newspaper. I know newspapers are not geared toward people my age, but never the less, I like walking out in the early morning, get my newspaper, can set and read it or take it with me to appointments and other places I go and still have reading material with me. Make of this what you will. But I will never totally give up reading the newspapers.

2008 Jun 18 10:44 AM

[Nick Gogerty:]

the latest stats on newspapers indicate the median age of a reader is 57. the tail is fading away.

2008 Jun 18 11:22 AM

[Brad Christ...:]

I will still pick up the printed paper from the newstand for my train ride into the city from the burbs.. It's just not the same on my laptop.. Nothing will or can replace the printed pages.. !!!

2008 Jun 18 11:32 AM