A myth: Online media consultant Vin Crosbie thinks that publishers are fooling themselves into believing that online readers are as valuable as print readers. He calls his theory the Myth of Online/Legacy User Equivalence:

"The Myth states that each online user is of equal value to a user of print or broadcast."

Crosbie does the math for us, citing a Northwestern University Readership Institute study that found that "the average reader of a metropolitan daily newspaper reads it 3 to 5 times per week, spending about a half hour each time and scans through all daily pages." 

Conversely, "the average user of a metropolitan daily newspaper's website uses that site 3 to 5 times per month spending about a half hour in aggregate there all month and seeing less than 30 webpages during that time."  

In the end, print users read 40-60 pages per use (3-5 times a week) whereas digital users read less than 30 all month. Additionally, a print reader spends 30 minutes per session with a paper where Internet readers spend 30 minutes per month on their newspaper's website.

Online revenue also pales in comparison. Crosbie refers to a 2003 Borrell Associates survey of 245 newspaper websites that found that the average revenue per user brought in by a newspaper websites was USD 7.93. Revenue per individual print readers averaged between USD 500 and 1,200, depending on the newspaper.

Crosbie concludes, "Unless publishers {or broadcasters] can create compelling website that get used — and earn — at least as much as their legacy media does per user, then the fact that more and more of their legacy media users are switching to online access of their service isn't good news."

Free websites: What also isn't good news for newspapers is that most of their websites are free. Worse still, people are becoming more reluctant to pay for news.

A study published by the Online Publishers Association shows that consumers in the US spent almost USD 1 billion on online content during the first half of 2005. But newspaper websites witnessed a 14% decline in content spending, from USD 46 million last year to USD 39 million in 2005's first half.

The Wall Street Journal remains the prime example of a newspaper site that has successfully charged for content. But their journalism is interest specific and the information it provides can possibly financially benefit its readers who are thus willing to pay.

The New York Times is currently testing a service which places some of its most popular columnists behind a paid wall but it has not yet been specifically made public as to how successful the service actually is.

Other papers, such as the Los Angeles Times and Spain's El Pais have razed paid walls they had in place, moves which can feasibly be read as a means of increasing traffic.

Traffic, of course, is popular with online advertisers.

Digital advertisers: Online advertising remains a small percentage (4-5%) of newspaper revenues, but it is the fastest growing advertising market in the world and promises to continue up that slope for some time as advertisers warm up to it.

If newspapers invest in this trend, figuring out the best way to produce results for their online advertisers, eventually they will begin to increase their revenue. But it is essential that they understand the differences in online and print advertising models, namely the advantage of targeted advertising that the Internet provides, and that because of these differences, their business relationships with advertisers will change.

Relationships with their classified advertisers has already changed because of the impact of free classified ads provided by online sources such as Craigslist. Many have predicted that the multi-billion dollar newspaper classified ad market has already been lost. But some papers have been fighting back with services of their own in order to compete.

As Internet newspapers evolve, they will find new ways to advertise such as Really Simple Syndication feeds (RSS) that some say "are the next avenue for smart marketers to look to."

RSS feeds: RSS is, however, not purely a means of generating advertising revenue; it can also generate traffic, as a study by Nielsen/NetRatings shows.

As this technology, which allows readers to quickly scan the day's news topics on a downloadable reader, grows more popular, it will also change the manner in which journalists write and editors edit. Headlines and article abstracts, which are listed on the reader, will become increasingly important.

For instance, headlines from some publications' RSS feeds are confusing and their abstracts are a few words that do not necessarily give any clue as to what the article is about. The problem with this is that in a world of almost infinite media, a publication can not leave readers guessing about an article's content because they just as easily find the content they're searching somewhere else. 

Instead, RSS headlines need to jump out at a reader even more than on the front page of a printed newspaper so that readers are enticed to click on the headline and read the abstract. The abstract thus must also be enticing enough to persuade the reader to click on it and go to the article, which will increase newspaper traffic, make advertisers happy and increase revenue.

Adaptation problems: The main problem with newspaper websites is that publishers have been reluctant to change their analogue business models and newsrooms their analogue journalism in order to adapt to the rising digital storm.

Publishers' shortsighted vision, based mostly on pleasing investors, made them blind to the changes the Interent is bringing further down the road. Because of this, newsrooms have been losing the resources, financial and personnel, they need in order to adapt instead of lowering profit expectations and investing their money back into their digital journalism development.

One particular dilemma is that newspapers can't seem to figure out is why younger generations are not buying the newspaper as they grow up. It has become obvious that this is because their news consumption habits have changed permanently with the Internet. Some organizations, such as the Associated Press and El Pais, are waking up to this fact and providing youth oriented Internet services.

But in the online world of infinite content, only time will tell if young readers adopt newspapers and their websites as their main source for content or if their competitors publish a more alluring product tailored to the desires of youth.

All in all, the newspaper industry has much work to do in adapting to these changes. Instead of continuing to worry about their profits first, newspapers need to reform themselves to a digital world where even acceptable profit margins will likely change. If their websites succeed, as consultants like Crosbie are making happen, newspaper readers will eventually become more engaged in online content, establishing newspapers as an integral component of the new media ecosystem.

Sources: Cyberjournalist (website usage up), Rebuilding Media (Crosbie), MediaPost (RSS increases traffic), HypergeneMediaBlog (RSS feeds)