Interesting comments about online revenue from Boston Globe

Here's an excerpt from an interesting interview with Boston Globe publisher Steve Ainsley that ran in the Boston Business Journal.

Ainsley feels that it’s longer than five years or 10 years away before print newspapers disappear.

Asked what the Globe look like in five years, Ainsley said:

Generally speaking, newspapers, whether they’re the Globe or smaller market newspapers, are going to continue this push toward really intense local coverage — because that’s what we do best, and that’s where we have our feet on the ground.

Intensely local is not surprising...this blog has already discussed that focus of local media.

But a second question is one that has not been addressed: "What percentage of revenue will come from online in five years?"

I think it’s going to have to be well north — and the five-year period I’m not comfortable with — I think we’ve got to get up to a quarter or a third pretty quickly, if we’re going to make the business models work. And it’s growing. Our online revenues, both as an industry and here on a percentage basis, are growing quickly. But, it is a business model of such that it is difficult to get the same rate that you get from print — that’s any newspaper’s challenge.

That still is the challenge that newspapers have not solved: it's not just how to cut expenses, but how to boost online revenue.

PC Magazine goes online-only + More Bad News for Newspapers

After 27 years, PC Magazine goes online-only, in part because ad revenue is falling. Its last print edition will be in Jan. 2009. What's significant is that "PC Magazine is Ziff Davis' Flagship magazine.

According to the Times, "The change will not require much of an adjustment, because the focus has been on getting articles to the Web first, said Lance Ulanoff, the editor of the PCMag Digital Network, which is what PCMag.com and its accompanying Web sites were renamed on Wednesday. “All content goes online first, and print has been cherry-picking for some time what it wants for the print edition,” Mr. Ulanoff said.

Here's a key point:

• “If you look at the list of the magazines that have gone to online, almost all of them have been magazines in trouble,” said John Fennell, a professor at the University of Missouri School of Journalism. “Magazines in general are going to be dependent on print advertising for a long time into the future,” he said.
• But magazine and newspaper publishers have been contending with a decline in advertising at the same time that their costs, including ink, printing, and distribution, are rising.

And we can expect further bad news: "Advertising pages for the December issues of monthly magazines are down more than 17 percent from the December issues of 2007, according to the Media Industry Newsletter, and that is leading to layoffs and the closing of titles."

Even more foreboding is a report that Harvard Square's iconic Out of Town News will be closing after more than 50 years. Here's how the Boston Globe reported it, "Plan to shutter newsstand pierces heart of Harvard Sq."
:

"It is not the profitable location for us that it once was," said Laura Samuels, spokeswoman for the owner, Hudson News of East Rutherford, N.J.

"The possible demise caused shock and dismay yesterday in Harvard Square, where shoppers took it as a wrenching sign of a rapidly changing world, where print news is dying..."

If people are not buying print newspapers and magazine in Harvard Square, what's the likelihood they will continue to buy them elsewhere?

But here's the real problem even for online-only publications: Costs are down, but they are more dependent on advertising than ever since none of them currently charge for online subscriptions. How will they make money when advertising is down?

Meanwhile, the Boston Business Journal reports that the Boston Globe is losing $1 million a week, which prompted the paper's latest redesign that cut 24 pages each week and latest buyout rounds. (However, the Globe's new "g" section now offers more comics than ever -- is that really what we want or need?) The Globe's problems are impacting parent NY Times' cash flow. No one is suggesting the Times is going under, but it certainly must be considering how to divest itself of the Globe.

To Twitter or Not to Twitter

Last month, the Boston Business Journal (BBJ) ran an article, "Twitter away: PR pros mix business and pleasure."

I understand the need to embrace Web 2.0 and social media as a way to understand and evaluate it -- hence, as one initiative, this blog.

But I haven't seen a lot of business from the dozens of social networking communities to which I belong or have monitored (LinkedIn, Facebook, Plaxo, MySpace, etc.) There's a point at which those sites have been mildly fun -- Facebook's quizzes -- and mildly useful in finding or keeping track of former classmates and colleagues. And then it doesn't take much more for the time invested in these sites for me to feel like I must have something better to do. Like managing some of the back office work I should be doing.

For the time being, I'm not going to Twitter more time away. But I'd be interested to hear what the point of Twitter is from a business perspective.