By Bill Richards
Crosscut (Seattle)
Published 11/30/2007
Excerpt:
"A better technology, more like the regular process of reading a newspaper,
conceivably could offer a better display for advertisers than the web is now,"
says Rick Edmonds, the Poynter Institute media business analyst who worked up
those projections for the Project for Excellence in Journalism.
Still, Edmonds says, he would be surprised to see even half a print paper's
advertisers move to an e-paper. A key element in making the transition from
print to online, he says, will be not upsetting the "natural balance" that
readers and advertisers expect between the ads and news stories that appear in
their newspaper's format.
"The main competition" for an e-paper, adds the University of North
Carolina's Meyer, "is non-consumption."
But a crossover of half the B-I's print revenue in 2014 would boost
the e-paper's projected online ad revenue to $82.2 million, according to the
Project for Excellence projections.
Or, to put it another way, using an extremely optimistic set of projections
for revenue growth, and matching those projections against the fixed cost of
running the B-I's e-paper — $35.1 million, remember? — in a half-dozen
years our hypothetical paper would be very profitable.
Using more realistic projections — the latest 21 percent revenue gain for
newspapers' online revenue versus a 9 percent drop in print advertising — the
timeline to profitability gets considerably shorter for our B-I. In fact,
by those projections, if Kindle is a winner and E Ink technology takes hold, it
makes more financial sense for the B-I to stop the presses and go
all-online right now.
There are other considerations, of course. For one, Amazon is asking $399 for
Kindle. Hearst says it can get the cost of its e-paper wireless screen below the
price of an annual P-I subscription — less than $185. Our B-I
might do even more aggressive marketing, given the gloomy prospects for its
print paper. How about offering the e-paper screen free for a two-year
B-I subscription. Verizon does it, why not us?
Edmonds, who was skeptical at first, is starting to do the math now. "If you
change the business model," he says, "that is something I would want to explore
if I were a newspaper company."
New technology, of course, is a gamble. "There are lots of things that sound
neat and have interesting benefits," Edmonds points out, "but for various
reasons don't catch hold."
Still, he adds, "Are newspapers waiting for breakthrough technology to
reconfigure the business model and re-invent circulation revenue gains?"
The answer, he says, is yes.
"If they do that," says Edmonds, "it's a new day."
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