US: Newspapers could sustain online-only ventures, need more viewers, report says

Posted by Rosemary D'Amour on December 18, 2008 at 1:53 PM

A report entitled "Size Doesn't Matter" concludes that news sites on the Internet can be profitable, if they reach a certain amount of readers, according to Advertising Age.

Online media-research company ContentNext looked at independently run, low budget sites like Drudge Report to media giants Google News.

Cost-intensive operations by major publications such as the New York Times, AdAge reports, as well as small website operations, can be self-sustaining, according to the report's author Lauren Rich Fine.

The challenge is getting enough readers to create "a discernable enough brand to make advertisers seek them out."

The numbers are "ambitious," Fine writes, with likely numbers around 800 million page views a month to be interesting for advertisers.

This is why local news sites face an uphill battle to be profitable, she continues, and underscores the struggle for local papers to gain revenue, and their "trouble offsetting traditional media declines."

The New York Times could succeed as an online-only product, the report said, but would need to garner at least 1.3 billion page views a month in order to be sustainable. NYT.com had 173 million page views in October, according to ComScore Media Metrix.

Because sites such as Yahoo!, AOL and Google already reach numbers around that mark, Fine explained, "it's not out of the question" for the NYT to follow suit.

Newspapers are "years away" from having the kind of online growth to sustain an online-only venture, or one that would make up for the decline in print advertising reveues, said Mike Simonton, a media analyst at Fitch Ratings.

Source: Advertising Age via IFRA