Developing and populous countries are the obvious exception. From 1999 – 2004, while newspaper circulation shrunk across the USA, Europe and Japan, China’s circulation grew by 35.69% and India’s by 23.21%. In the same time period, newspaper ad revenue grew by 87% and 36% in China and India, respectively, according to AP.
The Indian newspaper industry is quite safe for the next decade at least. Growing population, increasing literacy, even a willingness to share a newspaper between multiple people which further increases the exposure for advertisers, coupled with poor computer literacy, low computer ownership, and limited internet availability, all adds up to a healthy printed news industry.
Distribution costs are currently quite low and many newspapers have no problem with giving their entire front page to advertisers, or even taking part ownership in advertisers in exchange for ad space, all of which increases ad revenue and decreases the need for subscription revenue. Hence 2-5 rupee newspaper prices.
Internationally, things are very different, and events there bear understanding in case the Indian scenario changes faster than expected. The quest for newspapers now, is how to monetize their online content?
Initially, as websites became popular, newspapers just replicated their printed content, online, for free, for the small number of people who wanted to read it there. This small number of time-conscious, tech-savvy, early adopters were probably quite easy to target for online advertising. The problem is that the number of online readers grew and grew.
As the number of readers grew, news aggregator sites became popular. These sites collect news from everywhere, paying nothing, and combine news from many sources on one page, adding their own advertising for revenue. This is great for the reader, but doesn’t help the advertiser much. Even when visitors do stop by your actual webpage, measurement is difficult. In India, multiple people might use in internet computer to access a news site, but it will appear to be a single viewer returning multiple times. Advertisers now want to know how ‘engaged’ the viewer is. Not just what did they click and how long did they read for, but what else they did on the site.
Many newspapers are grappling with the concept of ‘pay walls’ – only displaying their articles to paying readers. The dilemma they face is that if they try to make readers pay, what if they all go somewhere else?
According to a Pew study, the behaviour of American internet users is as follows:
Pretty dire outlook for paid online news, it seems.