The drive to sign up users will increase, but in their quest for new revenue streams web magazines are likely to focus on younger audiences who are less likely to pay. The aim will be to build up in-depth profiles of customers, which can then be used to better target niche advertising as well as editorial content.
Published in American Journalism Review, Doug Brown’s research looked at a range of websites that are already making a profit.
"The practice (of charging for content) doesn’t funnel much money to the bottom line - less than 5 per cent of total online revenue," he says. "Reading online will increasingly come with strings attached… for now, those strings will largely be tied to free registration requirements at newspaper sites, not paid online subscription schemes."
US media strategists Borrell Associates Inc recently conducted a survey that found that, out of 246 newspapers surveyed during 2002, nearly two-thirds were making an online profit.
However, company president Gordon Borrell believes that most websites still get a large proportion of their revenue from classified advertising, which charging models will eventually threaten.
"Classifieds are as much content that draws traffic as they are advertising," he says. "So we believe there will be downward pressure on classified listing revenue, and if newspapers are dependent on that they’re in real trouble."
Borrell Associates also found that after trying subscription fee models, many newspapers were now re-evaluating. The result is that 'only a few dozen now charge for online access'.
Bob Benz, interactive media general manager at Ohio-based media group EW Scripps Co - which made its first online profit last year - claims his next step is to start new registration models where users must provide personal information to open a free account. This will provide vital information to advertising staff who can then build reader portraits for their clients.
He says: "Over time, I gather information [about users] and they trust me to use that information intelligently. I can do some pretty powerful things for advertisers and my readers."
US news group Morris Digital Works is aiming to attract a younger readership. Steve Yelvington, vice-president of strategy and content, says the age of net users is the reverse curve of that for print newspapers. "Young people go online more often. They’re not necessarily going online and reading news, and that’s something we need to change."
The Tribune Company, which owns the Los Angeles Times and Chicago Tribune sites, is also planning more targeted advertising, according to David Hiller, president of Tribune Interactive.
He says: "With those 2.5 million people who registered, we’re able to target on-site advertising as well as specialised email programs that are very popular with advertisers and something for which they are willing to pay considerably."
Sources:
http://www.ajr.org/article_printable.asp?id=3027
http://www.borrellassociates.com
http://www.scripps.com
http://www.morrisdigitalworks.com
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