Outsell: Newspapers slow on digital transition

Posted by Erina Lin on August 27, 2009 at 11:23 AM

"The news industry has so far failed to make the digital transition," according to veteran industry analyst Ken Doctor in the new Outsell report "Top 15 U.S. New Companies Print-to-Digital Market Size and Share," MediaPost reported.

According to Doctor, newspapers only made 11 percent of their overall revenues from digital sources, including both advertising and circulation, in 2008. Even the best performers in the industry, the Washington Post Co. and News Corp., marked quite low proportions of online revenue in the overall profits (15 percent and 14 percent, respectively).

However, compared to the rest of the information industry, news providers seem to underperform on this. While the percentage of news revenues derived from digital sources increased from 7.2 percent in 2006 to 11 percent in 2008, the rest of the information industry, which excludes news providers, was up from 65.3 percent to 70.2 percent. This shows that newspapers were still far behind while other sectors had almost already substantially completed the revenue transition from print to digital, Media Post reported.

Doctor also pointed out the growth of newspaper sites readers has slowed down and become "static", and, what's even worse, many newspaper publishers posted a negative figure on online revenue growth in 2007 and 2008, while the rest of the information industry remained positive.

"While the wheels are coming off the industry - with six bankruptcies and massive product and job cutbacks - it remains dependent on print revenues. The news segment still stands out as the biggest laggard in the information industry overall," Doctor summed up.