Online Newspaper Readership Continues to Rise

As expected, U.S. newspapers’ online audiences grew about 6 percent last year. This is a rare bit of good news for an industry struggling to adapt as readers and advertising dollars continue to migrate online.

Some interesting statistics released by Nielson include: web sites run by new
spapers had an average of 60 million unique U.S. visitors per month in 2007, up from 56.4 million the year before Due to the growth in the total online audience, however, the online reach of newspapers grew somewhat less, with 38 percent of all active online users visiting newspaper Web sites last year, up from 36 percent in 2006.

Newspapers are struggling to find a revenue model that works. Rupert Murdoch, the WSJ’s new owner announced today that it will continue to require online subscriptions to access certain information. Last year, The New York Times scrapped a two-year effort to charge online visitors for access to certain parts of its Web site, hoping that the additional traffic would result in higher online advertising revenues.

Revenues from online advertising have been growing at newspapers, but not yet fast enough to replace the declines in their traditional print advertising business.

Total newspaper advertising revenue fell 7.4 percent in the third quarter of 2007, the latest period for which the NAA has reported figures. Within that total, print ad revenues declined 9 percent to $10.1 billion, while online revenues rose 21 percent to $773 million, according to the NAA.

Expect continued consolidation in this industry as new media companies that understand how to monetize web site traffic continue to acquire the assets managed by the old guard who just don’t get it.