August 29 |
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Newspapers Slowly Adopt Digital Replicas
Advertisers Not Yet Supportive
Source: Investors Business Daily
Digital Replicas Help Papers Reach Far-flung Readership Quickly and with Lower Cost
As an international daily with writers in 11 countries, the Christian Science Monitor had a hard time getting its newspaper into the hands of far-flung subscribers. Some issues would arrive days, even weeks, late.
Not anymore. With an Internet connection, subscribers can now get the paper hours before it even hits the newsstands.
The Monitor is one of a growing number of publishers that deliver newspapers online, in exactly the same format as their paper-based editions, ads and all.
It's not clear if readers—and adver tisers—like the idea enough for publishers to support it over the long haul But for targeted audiences, such as hobbyists and trade groups, online publishing could be a hit—and a huge cost-saving opportunity.
"We have no idea what the long-term potential of our online edition will be, but it is a genuine alternative," said Stephen Gray, managing publisher at the Monitor. "I assume some publishers are doing this just because they can. Quite a few of us are in a watch-and-see mode."
Digital newspapers are not the same as what most publishers put on their Web sites. Web page versions of papers often lack some of the original paper's content and the stories are formatted differently. With digital replicas, however, every single page can be viewed in its entirety.
The concept got a big boost last year when the Audit Bureau of Circulations ruled that any digital newspaper that sold for at least 25% of its street value could be counted as paid circulation.
That gave a quick lift to some newspapers circulation, but not nearly enough to stir the interest of advertisers. For now, digital newspapers are viewed more as a customer service by large publishers. But it can bring newspapers into the hands of people that couldn't get it before, usually because of location.
"Treeless Edition1"
The Monitor launched its "Treeless Edition" three months ago. It costs $8 a month and has about 250 subscribers. The Monitor's print circulation is 75,000.
At The New York Times, only 3,000 of its 1.2 million daily subscribers have signed up for the online version since it was launched 10 months ago. The Times also sells another 4,000 electronic copies of that edition through an independent Web-based service called News-Stand.
"We're interested in getting our content to readers in whatever format we can," said Toby Usnik, a Times spokesman.
This year, the Times expects to earn $1 million through sales of electronic newspapers.
"That's not chump change," said Peter Zollman, founding principal at Advanced Interactive Media Group. "One has to presume it will continue to grow, unless you think this is a novelty. I don't think it is."
He also thinks advertisers might end up valuing electronic subscribers even more than print. Readers worldwide can get the paper right away. The fresher the news, the more likely people will read it, Zollman says.
Another advantage of online papers vs. print-based formats is that usage can be monitored. Ads can contain a direct link to Web sites. And digital papers can be interactive, giving them greater eye appeal.
"There are so many levels of opportunity that have not been explored that will be explored over the next few years/' said Zollman. "Digital replica editions will never replace print editions, any more than Web sites will put print out of business. But it will offer certain benefits. There is great potential for a lot of smaller papers, where distribution cost is an issue."
That seems to hold true for BZ Media, which publishes Software Developer Times, a trade newspaper that goes out twice a month to 47,000 subscribers.
Ted Bahr, the company's president, says he saves $108,000 annually by offering its readers a digital replica of its paper.
About 3,800 subscribers, or 8%, have signed up for the digital version. Another 8% asked for both the electronic and paper version. And 6,100 copies are sent electronically to overseas subscribers, the only way it's available to them.
Bahr said it costs BZ Media 60 cents per issue to print and mail the paper, but only 4 cents for die online version.
"Our readers who get the electronic edition say they love it," said Bahr. "They can archive articles, search them and pass along the paper to others. They also like saving trees."
But do the paper's advertisers like the fact that 20% of the copies are being viewed only on-screen?
"We've had no complaints from advertisers," said Bahr.
Gordon Borrell, president of Bor-rell Associates Inc., a media consulting firm, thinks digital versions of local papers won't excite advertisers. Local subscribers who get their papers that morning won't need the electronic version. And people outside the region who can't get local delivery won't appeal to advertisers, said Borrell.
Advertisers Won't Pay Extra
"Ninety percent or more of advertisers won't pay extra to have their ad being viewed by someone in Timbuktu or Bangkok," he said. "They are not going to pay extra for the additional audience."
Avenue A Inc., a Seattle-based digital marketing and technology company, says its advertising clients haven't expressed an interest in digital copies of newspapers. That may be because the trend is too new.
Advertisers are increasingly comfortable with online ads overall, says Teri Franklin, a spokeswoman for Avenue A. They spent about $8 billion on online ads last year.
But that's only about 2% of advertising spending overall, others note. That seems small for a medium that most consumers use every day.
Most electronic papers are delivered in a PDF format using Adobe Systems Inc's Acrobat software. Others use software by Olive Software Inc. NewsStand Inc. develops its own software.
NewsStand went live a year ago, and now offers 16 newspapers and six magazines that are downloaded for a fee. The company won't say how many people use the sendee, but it claims to have readers in 100 countries.
"We haven't publicized the numbers, but our business is growing and we are getting positive feedback," said Clark Charbonnet, NewsStand director of marketing.
Another newspaper marketer, NewspaperDirect, takes a different approach. It can deliver more than 135 newspapers around the globe.
Usually, an entrepreneur or maybe a hotel owner signs up for the service. That person downloads and prints the newspaper using a laser printer and large-format paper. The papers are then stapled and hand-delivered to consumers. Newspaper-Direct has 200 printer installations worldwide.
The company is also testing a Web-based version of its service. If s similar to what NewsStand is doing.
"We're waiting to see what happens with NewsStand. If there is a business there, we will compete," said Miljenko Horvat, chief executive of NewspaperDirect, which has its U.S. headquarters in New York.
Brian Deagon
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