A new BIA-Borrell Associates study concludes that online news sites are hitching themselves to a falling star in remaining tethered to the newspaper. Declining revenues in print will only harm the business opportunities for online. Pure-play online sites are best positioned to weather the storm, the report notes. The reason newspapers may need to be severed is that their online revenue isn't expected to grow dramatically in the context of declining print revenue. The report set out to valuate Web sites. The median newspaper Web site: $3.5 million.
Just because a pure play web option is the best idea doesn't mean print operations should drop the print side - the vast majority of their profits comes from print, but not as large a proportion of costs. If they were to start again, of course, they would probably not go print, but they're not starting again, they're managing legacies. That's why they're at such a disadvantage to the startups. Useful study, though.
Agreed. Print operations are also at an advantage in that they've got reputations in the market, including relationships with those they cover, and that counts for something. They still deliver between 90 and 95 per cent of revenue. I think most organizations also don't transfer proportionate costs of the journalism to the online sites as yet --- editorial costs are just bundled and not broken out. If they were cost-separated, online operations might be even more fragile.
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