Yes, long live paper

The global victory of the Internet is delayed

Most of the newest dogmas cause heated discussions, which means they have supporters and opponents. For example, is global warming related to greenhouse gas emissions by industry and is artificial intelligence a threat to the existence of mankind. But there is a dogma with which practically no one argues. Newspapers are dead, the Internet has won. It is in this formulation: paper is the past, and digital is the future. Meanwhile, they coexist in the present, and far from having an equal level of success.

Recently, Professor Iris Chui from the University of Austin (Texas) spoke at the World Publishing Expo in Berlin. She talked about the fact that publishers have been experimenting with the Internet for 20 years and during this time several technologies have appeared that were supposed to save newspapers. At first it was websites. Then tablets. Then social networks. Then videos and podcasts. Now here's virtual reality. But 20 years is long enough to take stock.

Since 2000, the heads of almost all the major US publications have stated that after some time they will abandon the printed version. But none of these newspapers have finally moved to the Internet. And that's why. Internet advertising revenues are several times less than those from paper advertising; income from paper subscriptions is sometimes ten times higher than from electronic subscriptions. And the audience of American newspapers votes for it with their dollar.

In her speech, Chui cited data on the US market from her fundamental research. They, in particular, show coverage of the 18+ audience. That is, these are readers, those who, for a certain period of time, at least once held a newspaper in their hands or visited its website. In 2007, the total coverage, including paper and electronic versions, was 48.2%, now it has fallen to 33.3%, and mainly due to paper. But at the same time, the number of people who read media only on the Internet, although it has doubled, still makes up only 4.5% of the audience - five times less than that of "paper".

And since the media eventually monetize their audience, the situation is similar with media revenues, at least in the US. First, they fall dramatically. In 2005, revenues were almost $50 billion, ten years later - only $20. Revenues from paper have fallen by a factor of three, but today they still exceed $16 billion, while digital makes only $3.5 billion (compared to two billion in 2005).

That is, paper is falling, and digital is growing, and quite cheerfully, but from such a low base that its contribution to the common cause remains insignificant.

Where is the money then?

All the money is taken by Google and Facebook.

They receive, according to various estimates, from 60 to 77% of global digital revenues, from advertisers and users. And more than 90% of their growth.

With the tandem of "Google" and "Facebook", perhaps nothing can be done. This is a global trend. But it does not follow from this that digital revenues cannot be increased in principle. In this regard, the example of the New York Times is very indicative.

Since 2011, the publication has been actively engaged in the development of digital subscription. In 2015, the number of digital subscribers equaled the number of paper subscribers, that is, it exceeded one million people. Today there are more than two million of them, that is, the total number of subscribers is more than three million. I emphasize, these are those who pay for the opportunity to read the NYT. This is the most successful example in the world.

And in the overall structure of NYT's income, digital is 28% - this is an excellent indicator for the newspaper, which further emphasizes that there is nowhere without paper yet. What's more, management says that if they can't double digital revenues by 2020, they'll have to cut spending because paper revenues are falling like everyone else. And this will affect the quality of the product.

Therefore, it is definitely worth listening to what Michael Golden, vice president of the NYT, said in Berlin.

His main thesis is this: The New York Times has moved to a subscriber-centric model. Both on paper and digital. In the "digital" this is especially important, because you have to make a choice between a subscriber and an advertiser. The advertiser is interested, relatively speaking, in clicks and uniques. So, Golden says that uniques are not that important. Engaged readers are important. Only they become subscribers.

In general, it does not make sense for publishers to enter into an epic and obviously losing battle with technology companies for all-all-all readers in the world (as well as in the country and region of presence). You need to focus on what they can do, in fact, the best thing is to look for your reader who will be willing to pay for content, in paper or digital. Yes, even with virtual reality glasses.