According to researchers from City University London's Graduate School of Journalism, going online only could cause a newspaper to lose 75% of its revenue and web traffic can actually fall. For their report 'Taking the paper out of news,' Neil Thurman and Merja Myllylahti studied Finnish financial daily Taloussanomat which dropped its print edition at the end of 2007, due to declining readership and heavy losses. They interviewed the CEO and Editor-in-Chief, as well as several other editors and journalists.

The researchers state that "logic might suggest that if a newspaper's content ceases to be available in print form, the title's website would start to register a significantly higher number of visitors." But in fact, following an initial rise, the paper's unique users started to fall months after the paper went online-only, and "compared with the websites of three newspapers who retained a print version, Taloussanomat's performance looks very poor indeed." One such website is that of its main competitor, Kauppalehti, which runs an integrated print-online operation.

Five months after going online-only, according to the report, Taloussanomat's unique visitors were 22% lower and pages impressions were 11% down compared to the week before it made the switch. Thurman and Myllylahti estimate that readers now spend about 75% less time reading the title as a whole than they did when it was also available in print. It is necessary to remember that Finland is a country whose people love their newspapers, with the third highest level of newspaper penetration in the world.

Looking at the purely financial aspect of the move, Taloussanomat costs fell by 52% when it stopped printed, and its revenue fell by at least 75% due to the loss of print advertising and subscription income. However, according to CEO Juha Pekka Raeste, in absolute terms, the cost savings achieved were greater than the loss from advertising revenue.

In general, the researchers concluded it is only financially worthwhile "ditching" the print edition if a newspaper has an operating loss of 31% or greater. They warn that going online-only "cannot, on its own, bring a newspaper back to profit." They suggest that newspapers which are forced to adopt the online-only model might come to rely on other income streams, such as 'permission marketing' via opt-in content such as specialist email newsletters, content syndication, or partnerships and services and events that build on newspaper brands.

From a content point of view, the study found that in the streamlined online-only newsroom, with 41 staff as opposed to 69, there was a reduction in news on companies and markets, rather a "greater consumer focus, more sensational / celebrity stories, and a shift away from original reporting, with 80 percent of Taloussanomat's stories coming from news agencies and other sources."

The researchers concluded that this was the result of "a squeeze on resources and the nature of the online medium, which demands a higher turnover of stories to encourage multiple daily visits." Staff felt that their workload had significantly increased due to the smaller staff, and researchers detected pressure on journalists and editors from the publisher to raise visitor numbers. Also, Taloussanomat was apparently no more innovative in its use of multimedia or user-generate content than sites partnered with a print edition, and only had one journalist who provides video content to the site.

So is there any hope for online-only newspapers? A recent article suggested that only 3% of newspaper reading takes place online, a conclusion that is not necessarily accurate but does provide food for thought. Dropping the print edition is a trend that is picking up speed as the advertising market slows and newspapers realise that they must cut costs to survive; the latest papers to make the switch include the Seattle Post-Intelligencer and the Christian Science Monitor. What seems clear is that if a paper does decide to go online-only, it must be prepared to innovate and appropriately change its methods and offerings if it is to achieve success in content and financial terms.

Source: City University London