Spring 2010 issue of Horizons

The objective for those newspapers moving online is to continue to offer more breaking news, video, other multimedia and interactive features. Many readers arrive at the sites through search engines and links from other sites. The goal of the paper is to keep visitors on its site for as long as possible. As the majority of online papers are available for viewing without charge, newspapers must find a way to generate enough revenue to support the staff and expenses. New technologies, such as Amazon’s Kindle, present revenue opportunities to newspaper companies. Consumers would be charged subscription fees, creating additional revenue; in addition, the option would eliminate newspapers’ supply and delivery costs. Another opportunity for newspapers is the continued growth in mobile web and smartphone sales and usage. eMarketer estimates that 68.6 million users will log onto the mobile web at least once per month in 2009, and that number will increase to 126.2 million people in 2013. Revenue could be earned through the download and usage of applications to circulate newspaper content. Newspapers’ biggest objective is to identify and target additional advertising groups to interest new advertisers and bring in new revenues. With the cost- saving efforts of eliminating or outsourcing phone circulation sales, delivery and customer service functions, companies have refocused these funds on increasing marketing efforts. The key is for newspapers to identify new niche markets within their readership and to find advertisers who will successfully deliver a suite of products to these groups. ONLINE ADVERTISING

print ads. Video advertisements are the fastest- growing segment of local online advertising.

The newspaper industry does face some challenges with more ads moving to digital format from a revenue aspect. More monitoring of ads on the web page and exact locations will have to be performed to ensure the correct ads are running for the designated time; otherwise they could suffer revenue leakage.

STREAMLINING OPERATIONS

Newspapers also are looking at innovative ways to streamline operations. By centralizing call centers, outsourcing and performing web width reductions, newspapers are trying to lower costs. Newspapers are sharing delivery systems with each other. Some newspapers are even sharing content, reporting and other editorial functions. Newspapers are outsourcing preproduction operations and in some cases even printing. Many newspapers are forming alliances with their former competitors to share presses, newsprint and even cross-market distribution. In addition to revenue partnerships with large companies such as Yahoo, Monster, Advo and Google, many newspapers are pursuing revenue and audience development strategies.Some of the decline in print circulation has been an intentional strategic cost-saving decision. With fluctuating gas prices, delivery to more remote areas surrounding cities has been discontinued in many metropolitan areas. Also, most subscriptions are sold via phone, which is expensive. As most new subscribers do not stay past the trial period, the cost-benefit analysis of this approach to new subscribers has led several newspapers to cease telephone sales efforts. Other cost-cutting efforts include decreasing the size and number of pages of each paper or cutting circulation to a few days per week. Companies are now being more aggressive about pricing. Traditionally, paper newspapers in the United States are priced at about half of what they are sold for in Europe and Asia.

As online readership continues to increase, ad revenue growth is transitioning to online versus

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