[LINK] Online news no death knell for newspapers, report says

[Bernard Robertson-Dunn]

Online news no death knell for newspapers, report says
By Business editor Peter Ryan and staff reporters
ABC
_http://www.abc.net.au/news/stories/2009/08/10/2650990.htm_

The imminent death of traditional newspapers as readers and advertisers 
switch from print to online has been exaggerated, according to a report 
out today.

The report comes hot on the heels of announcements by both News Limited 
and Fairfax Media that they will soon be charging for access to online 
content.

The closely-watched outlook on Australia's media sector by the 
accounting firm PriceWaterhouseCoopers says although newspaper 
publishers remain under acute pressure as advertisers go digital, they 
will return to growth by 2012.

It says while Australian newspapers are faring better than their 
counterparts in the United States and Europe, they have no choice but to 
follow Rupert Murdoch's decision to start charging for online news content.

Over the weekend Fairfax Media chief executive Brian McCarthy said his 
company was also planning to start "monetising" its online content, 
which includes coverage from newspapers including the Sydney Morning 
Herald, Melbourne's Age, and the Australian Financial Review.

''Monetisation will have to happen, because without monetisation of the 
online sites that the newspaper industries have operated very 
successfully, we can't afford to keep the big newsroom staffs we have,'' 
he told the Sunday Age.

Mr McCarthy said Fairfax had to adapt because advertising revenue from 
online sites was not nearly enough to support the production of 
editorial content.

The Australian Financial Review website already operates with a 
subscription model, where premium content is only available for paying 
readers.

If Fairfax goes ahead with the plan it means the time will soon arrive 
when the majority of Australian online newspaper content will no longer 
be free.

Rupert Murdoch announced last week that News Limited will charge for its 
content by June next year.

It's a risky strategy in a media environment in which people have become 
accustomed to getting news for free online, but the PWC analysis offers 
some hope.

"Indications are that news, sports and weather and finance are three or 
four sort of niche markets that people I believe are prepared to pay for 
in an online environment," said David Wiadrowski, a media partner at PWC.

"It certainly has some risk but to be honest, I don't think they've got 
too many other opportunities. At the moment, traditional revenues from 
traditional media are very much turning into digital pennies, as that 
advertising migrates online."

He says media companies have no choice but to charge for the content and 
make sure their shareholders get a return on their investments.

The report praises Australian newspapers' efforts in adapting new 
technology like mobile phones, and Mr Wiadrowski says similar innovation 
will be the key to success in the future.

"The younger generation, the Netgeners are very used to reading it 
(news) online. I mean it's only a matter of time [before more people are 
reading newspapers on mobile devices]," he said.

"The advent of the iPhone is a very good example and certainly the 
growth in mobile devices will continue and even though some might regard 
the device as being a bit clunky, having that feature of that third 
screen in their hands... is making it a lot easier."

And according to Mr Wiadrowski, the internet is not the only place where 
newspapers can look to bolster their bottom lines.

"The development of a number of these glossy inserts; turning the 
newspaper on the weekend into a lifestyle experience; going to the cafe 
and spending you know two or three hours there sitting and reading the 
weekend newspaper, are certainly some indications of how the newspaper 
industry is responding to this challenge of traditional media," he said.

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Regards
brd

Bernard Robertson-Dunn
Canberra Australia
brd at iimetro.com.au