This week’s publication of an OECD report on “The Future of News and the Internet” (http://digbig.com/5bbssh) is very timely. The media in general and Livewire in particular ( see http://www.vivavip.com/go/e28452, http://www.vivavip.com/go/e27220, http://www.vivavip.com/go/e24652 and http://www.vivavip.com/go/e22457), has been buzzing with reports and discussions on the pros and cons of the introduction of pay walls to online news sites. While some commentators view pay walls as the saviour of the serious news industry, others argue that publishers need to come up with different business models to attract and keep readers.
The authors of the report conclude that “the death of the newspaper” is still an exaggeration, to mis-quote Mark Twain. While newspaper publishers in OECD member countries have been faced with declining readerships, reduction in advertising revenues and a subsequent closing down of titles, the hope for the sector seems to lie with non-OECD countries, such as India, China and South Africa.
In these countries, circulation of daily paid newspapers has been growing for a number of years. In India for example, circulation grew by 45 per cent between 2000 and 2008. Over the same time, China and South Africa saw a 29 per cent and 34 per cent increase in newspaper circulation, respectively.
Within the OECD, the decline in the newspaper industry varies considerably. While the US and UK markets saw the largest declines (30 per cent and 27 per cent) between 2007 and 2009, the Austrian and Australian newspaper sectors only dropped by 2 per cent and 3 percent respectively. It would seem that the US and the UK publishing sectors have been more severely affected by the economic downturn.
As the report points out, some countries are more reliant on advertising than others. It is not surprising that the report found that the web is the main source of news for young readers, in fact in Korea, more than half the population reads news online. Interestingly, those who read printed news most also seem to read news online in greater numbers. A welcome finding for the pay wall advocates: apparently, there is an increasing willingness to pay for online news.
As to the future generation of news consumers: the authors refer to research compiled in the UK, which shows that young online users tend to view rather than read and absorb news. Their ability to search for facts quickly on the web has resulted in a loss of critical faculty.
While new business models and value chains are constantly evolving, the report concludes that changes to the newspaper sector brought on by the ever-changing media landscape present both opportunities and threats. While the web has led to more freedom of choice for readers in terms of news sources, the decline in the print media is putting an “important foundation for democratic societies at risk”. Plenty of pause for thought and a report well worth reading.
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Penny Crossland is the owner of CH Business Research, a consultancy specialising in investigative research and market intelligence. Penny conducts research projects for clients from a variety of industry sectors, including financial services, management and security consultancy, FMCG, publishing and retail. Fluent in German, she also translates academic papers and corporate material.
Before establishing her business in 2001, Penny was Research Manager at OC&C Strategy Consultants in London. Penny graduated from Bristol University with a degree in German and Politics and has a Masters degree from London University in contemporary German Literature. She became interested in all aspects of business information through working for an industrial market research company in New York.
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