Web’s not yet warm enough to beat the chill

Peter Preston: Online revenues four years ago were less than a twentieth of conventional money from conventional sources, and the touted growth figures since haven’t altered the picture much… As recently as 2003, American newspapers made $1.2bn from their online operations. Three years later, that had turned to $2.7bn. Thus, in headline terms, internet revenues had soared. Maybe ad money devoted to print was falling, but there was plenty of seeming proof that what you lost on the conventional swings you could make up on the digital roundabouts – and not just in the US: for domestic confirmation, study almost every big British newspaper group’s annual report.In Britain, just as in the US, online cash revenues appeared to be increasing by 20, 30, even 50 per cent a year. Ad agencies with a zest for future business produced surveys showing digital revenues outpacing all of Fleet Street, then radio – and now commercial TV by 2009. The message was clear. One old bit of newspaper scenery might be flaking away, but a whole new future was taking shape. Papers weren’t dying; they were merely morphing as they embraced change.Well, perhaps. The record looked – and still looks – impressive enough; the endeavour and investment remain formidable. But never forget to add a dollop of context. In the latest American Journalism Review, Paul Farhi looks at total US print advertising revenue in 2004, the last official collation. It registered $46.6bn, with another $11bn from cover price. The figures tell a continuingly valid story. Online revenues four years ago were less than a twentieth of conventional money from conventional sources, and the touted growth figures since haven’t altered the picture much.The biggest online revenue raiser among US papers, the New York Times, still brings in only 11 per cent of its total cash that way. Though UK groups are more coy about revenue breakdowns, their average take appears to lie between 5 and 5.5 per cent.
http://www.guardian.co.uk/business/2008/jan/06/pressandpublishing

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