11
Oct 10

Why decline in news consumption shouldn’t surprise anyone

Because there is simply too much information available, online and offline, news and non-news. Period.

Without specific/extreme attention management strategies (like those utilized by Hong Kong newspapers, which are effective but horrible, in my opinion), U.S. newspapers would find it hard to compete with everything else, online and offline, news and non-news.

In this book chapter, I coined the term “information surplus” and used a very simple supply/demand chart to illustrate why “excessive information is available even at the price of zero.”

Information surplus is the cause of the unprecedented crisis facing content producers (e.g,. journalists, writers, musicians, etc.). But it is a reality and can only get worse in this Web 2.0 era.


11
Oct 10

Macaroni cheese, ramen noodles, and online news

Many newspapers believe they need to transition from print to online. But let’s face it: Users’ response to online news has fallen short of expectations — otherwise, why bother discussing whether the New York Times’ newly proposed paid content model would work or not.

As of today, many people are still paying for print newspapers but much fewer are willing to pay anything for online news. (And this seems to be true in most media markets — I did one study in Hong Kong).

Have you ever wondered why?

Also consider the following:

For most U.S. newspapers, most of their online readers also read the print edition during the same week, and this seemed to be universal too (I’ve conducted research on this in the U.S., Hong Kong, and Taiwan). Most newspaper publishers interpret this as: The online and print products go hand-in-hand.

Sounds like a happy ending?

But why would users not drop the print edition (which requires a fee) when they already are reading the same newspaper online for free?

In fact, research (including this study by the Online Publishers Association and several others) showed that people tend to perceive online newspapers as less likable and less satisfying when compared side by side with the print edition.

My take is that online news, like Ramen noodles, is an inferior good. And our research, based on Pew Center’s survey data, found just that. Print newspapers, on the other hand, is a normal good. (Full-text PDF available here)

(For those who need some background information: Economic theories distinguish inferior goods from normal goods. A classic example of inferior goods is Ramen noodles, while steak is considered a normal good. This is because, when you have more income, you tend to consume more steak, but less Ramen noodles.)

So what does this mean for newspapers?

1. It is important to understand the economic value of your products. Ramen Noodles should not be marketed as steak.

2. We should try to find out why online news is perceived by users as an inferior good.

Two plausible reasons:

  • The computer screen is just not a great reading device. (If that’s the case, you’d wonder how newer devices such as the Kindle, the smart phone, or the iPad would server users better, or worse.)
  • Simply because it is free! (Behavioral economists have recently found that pricing actually affects the perceived quality of a product — people tend to perceive something with a higher price as of higher quality.)

3. Reality-based research, rather than guesswork or wishful thinking should guide the newspaper industry when they make content, pricing, and marketing strategies.

[Abstract & Powerpoint] [full-text PDF] [featured on AEJMC’s website as “research you can use”] [featured on Nieman Lab’s blog] [featured on a blog on Dutch Journalism] [featured on a Japanese blog] [UT Austin College of Communication Faculty Research Award]


11
Oct 10

Long distance users: Inconvenient truth for online newspapers

Every newspaper website serves two groups of readers: 1) local users and 2) long-distance users (from outside the print market).

I have always been interested in the long-distance segment, primarily because I’ve been a long-distance user myself since the first Chinese-language online newspaper became available in 1996. In Hong Kong, Tucson, or Austin, I check news from Taiwan online almost everyday.

Based on a series of research, I know the long-distance group constitutes a substantial market segment for most newspapers.

What struck me as interesting (or unbelievable) is, for so long, no newspapers seem to be interested in monetizing these loyal users (yes they seem to be the most loyal group of users, according to our latest study). Many are reluctant to reveal the breakdown of local/long-distance users; some try to exclude long-distance users from the audience metrics. Why?

Continue reading →


11
Oct 10

Are college students dropping print newspapers?

Lessons from a national survey of college newspaper advisers

Simply because young adults are less likely to read a print newspaper compared with other age groups (Pew Project of Excellence in Journalism, 2011), many news professionals assume young people have lost interest in reading print newspapers (Kaufhold, 2010).

Although previous research has documented that most readers found the print newspaper to be more useful, satisfying, likeable, and enjoyable than its online counterpart (Chyi & Chang, 2009; Chyi & Lasorsa, 2002; Chyi & Yang, 2009; De Waal, Schoenbach, & Lauf, 2005; Online Publishers Association, 2004), many within and outside the industry believe young people are an exception, and the way to retain young readers is to pursue them online — through the Web, social media, or mobile apps.

However, because no viable business models for online news seem to exist, it is important to re-visit some of the assumptions about young readers’ attitudes toward online and print media.

This study addresses the issue through a national survey of college newspapers. Most college newspapers publish in both online and print formats, and both formats are offered for free. Their target readers are college students ages 18-22, all with Internet access (the so-called “digital natives”). Additionally, these college papers publish content relevant to college students’ lives. These scenarios provide a great opportunity to clarify the belief about young readers’ format preference on the other-thing-being-equal basis. All episodic evidence suggests that the print edition still is the primary product and major revenue driver among college newspapers (Krueger, 2010), but a systematic examination is lacking.

Methods

A Web-based survey of 198 U.S. college newspapers was conducted May 6-June 6, 2011. The survey documented the current state of U.S. college newspapers, the relative importance of their print and Web editions in terms of audience size and advertising revenue, and college media advisers’ view about college students’ preference for the print/Web edition and the feasibility of online-only publishing.

A list of college newspaper advisers was obtained from College Media Advisers, a national association of college media advisers. The link of the Web-based survey was emailed to each of the 486 newspaper advisers who were members of the association. Only those who were responsible for or familiar with the business operations of the college newspaper were eligible to fill out the survey. Three reminders were sent during the one-month period. The completion rate was 41 percent. The final sample includes a total of 198 completed surveys, representing 198 college newspapers in the U.S.

The survey took an average of 10 minutes to complete. The questionnaire was developed based on consultations with college newspaper advisers.

Newspaper Profiles

Multiplatform publishing is common among these campus newspapers. Of the 198 college newspapers surveyed, 98% published a print edition, 97% published a Web edition, and 21% had a mobile app.

On average, each paper had 1.9 full-time and 1.6 part-time non-student staff members as well as 46 student staff members, serving a student population of 13,432. The annual revenue was $206,785, the sources of which include advertising revenue (47%), student fees (31%), and academic funds (18%).

Key Findings

For the print edition, the average circulation was 4,850 (the median was 3,000). In contrast, the Web edition attained 2,864 unique visitors per day (the median was only 400).

Average time spent on the Web site was 3 minutes and 27 seconds per visit.

Number of Students Reached by Print vs. Web Editions

dailyreader4

As many as 93% of the college newspaper advisers indicated that college students preferred the print edition. Only 7% said students preferred the Web edition. Follow-up questions probed the reasons.

Which Format College Students Prefer

preferredformat

The print edition generated 96% of the advertising income while the Web edition accounted for only 4% of the advertising revenue.

Advertising Revenue Generated by Print vs. Web Editions

adrevenue

Print circulation has remained stable for 58% of the newspapers surveyed; 26% have seen circulation declines, and 11% have seen circulation increases.

In terms of advertising revenue, 42% of the papers have seen declines, 30% said it has stayed the same, and 25% reported increases in print advertising revenue.

Some 63% of the respondents said it is “very unlikely” or “unlikely” that their college newspapers would become an online-only publications in five years; 23% expressed a neutral view; 14% indicated it is “very likely” or “likely” that their paper would become online-only in five years’ time.

Summary

These findings suggest that the print edition outperformed the Web edition in terms of readership and preference and generated the vast majority of advertising revenue. Print circulation and advertising revenue in most cases remained stable. As for the future, most college newspaper advisers did not believe an online-only model would be realistic within the next five years. Albeit, such results were collected from college newspaper advisers, they carry managerial implications for commercial newspapers as they envision the future of their industry.

Conclusion

So, do “digital natives” prefer getting news online to reading the “dead-tree” edition of a newspaper? The answer, according to college newspaper advisers, is no. Moving news from print to online may actually turn young (and old) readers away, as this and other studies have suggested (Thurman & Myllylahti, 2009). Newspapers should revise their digital strategy for digital natives because the real problem, be it a lack of interest in news or an inevitable consequence of information surplus (Chyi, 2009), has little to do with the “print format” per se and cannot be solved with technology alone.

Acknowledgements

Special thanks go to Frank Serpas III, Sally Renaud, Ron Spielberger, Hillary Warren, and the 198 newspaper advisers affiliated with the College Media Association for their contribution to this survey. The researcher also thanks Glenn Frankel, Nan Zheng, Kurt Mitschke, Avery Holton, Angela M. Lee, and Jordan Humphreys for their support and assistance.

References

Chyi, H. I., & Chang, H.-C. (2009). Examining the use of and preference for online news in the context of intermedia competition. In L. Leung, A. Fung, & P. S. N. Lee (Eds.), Embedding into our lives: New opportunities and challenges of the Internet (pp. 101-123). Hong Kong: Chinese University Press.

Chyi, H. I., & Lasorsa, D. L. (2002). An explorative study on the market relation between online and print newspapers. Journal of Media Economics, 15(2), 91-106.

Chyi, H. I., & Yang, M. J. (2009). Is online news an inferior good? Examining the economic nature of online news among users. Journalism & Mass Communication Quarterly, 86(3), 594-612.

De Waal, E., Schoenbach, K., & Lauf, E. (2005). Online newspapers: A substitute or complement for print newspapers and other information channels? Communications, 30(January), 55-72.

Kaufhold, K. (2010). Journalists show unified optimism about young adults’ news consumption. Newspaper Research Journal, 31(2), 63–68.

Presentation

This paper was presented at the 13th International Symposium on Online Journalism, Austin, Texas, on April 21, 2012. It received the Top Rated Research Paper Award and has been published in #ISOJ: The Official Research Journal of the International Symposium on Online Journalism.

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