Everything changes. The newspaper industry is living proof of that. Reliance on print-ad revenue spelled near disaster for some, as digital began to take over. For other papers, the collapse was complete with no way to keep up with changing consumer demands.
But among all of this turmoil, some newspapers have held on and are starting to see a return for the effort. The pivotal role of revenue development has never been more clear than it is today. The trick is finding the right balance between revenue streams that are working, and are predicted to work better as the industry keeps evolving.
Revenue Declines Level off when You Branch Out
It’s no secret that newspaper revenue and circulation have declined for years, with some of the worst dips happening between 2007 and 2009. It seemed like a veritable free fall with no way to slow it down, but there is encouraging news.
Some of the largest papers in the country have indeed slowed down the plummeting numbers to the point of leveling them off. Although nowhere near as profitable as they once were, some of these media giants are even experiencing gains for the first time in years.
Ad revenue isn’t dead, and in some areas it’s even growing. The Pew Research Center Project for Excellence in Journalism report, The State of the News Media 2013, reveals that in some larger markets, ad revenue is on the rise for employment, real estate and automobile classifieds.
Paywalls are the next big revenue boost, even if some markets are slow to accept the idea. Certainly there are still people who oppose paying for any information found online. It doesn’t seem to matter whether the ”news” is found at Uncle Fred’s Super Blog or the local digital newspaper, some people may never come around to paying for what they think ought to be free. But larger papers have shown their readers that the old saying is true — you get what you pay for. If it’s free, it might just be worth every penny.
Calculated cutbacks also help. They don’t generate revenue, but they help preserve what’s coming in. The trick is cutting back in one area, likely print, while beefing up in another, digital. It’s a sad but apparent fact of life that digital drove a few nails into print’s coffin, but the lid isn’t sealed just yet.
Banner Ads are Still Big Sources of Revenue
The Pew Research report explains the bold truth about print ads. In 2012, they generated less than half the revenue that they did in 2003. Picking up some of the difference is digital, with banner ads leading the herd for now.
When it comes to digital revenue, banner ads are King. Industry wide, banner ads increased from $7.55 billion in 2011 to $8.68 billion in 2012. The problem is competition for ad space.
With a much wider range of ad space choices, the cost of advertising online is going down. Competitors for ad space aren’t limited to other newspaper websites. Facebook not only has attractive digital real estate, but its tech advances mean advertisers may have options that they can’t get at a newspaper website.
Video Ads are Smaller and Newer, but Gaining Fast
Video ads are the up-and-comer, experiencing gains from $2 billion to $2.93 billion between 2011 and 2012. Step back for a wider view, and the growth is really stunning. In 2008, video ads accounted for a mere $0.6 billion in revenue. By the end of 2013, they are projected to bring in $4.14 billion. That puts video in 2nd place behind banners, which are projected by Pew to reach $9.6 billion by the end of 2013.
Pew Research suggests that video ad growth is so fast, it’s difficult for advertisers to keep enough content online to meet the demand. If you needed inspiration for how to branch out creatively, video appears to be worthy of attention.
A Paywall isn’t Just a Paywall
The word ”paywall” sounds stern, restricting, and even a bit harsh. But paywalls are no different from from scanning newspaper headlines and top stories at a newsstand, and then paying for a print copy to take it home.
There’s also more than one type of paywall, which gives your audience options. You can opt for a clear-cut, subscription-only service, or set up a partial paywall that lets readers access some free content and pay for full access. Another option lets users access the full site for a limited time, then requires a subscription after they reach a certain number of page views.
Pew Research shows that paywalls are working for big papers such as the New York Times, and smaller and mid-size papers, too. What has been and continues to be lost in print circulation per-copy and subscription revenue is gaining ground on the paywall front. It also helps reduce the industry’s lifetime of dependence on ad revenue. In short, paywalls are not just an option, but can be a real and effective part of any newspaper’s revenue development structure.
No one debates the fact that the newspaper industry has been, and continues to experience dramatic change. But the appetite for news isn’t gone, you just have to keep, or make, it profitable.
Branching out with several revenue streams seems to be the jolt that can turn profits around. What works for the biggest papers in the nation might not work for a small, community paper, but the statistics reveal that news remains relevant, and the means to support it still exist.