Chasms Widening: Newspaper Companies & the Web

The good news:  When it comes to getting local news, some 61% of Americans still look primarily to their local daily newspaper for the lowdown. And only 6% turn to Google, Yahoo and MSN. 

Unfortunately, "local" is one of the few areas in which daily newspapers can still claim such loyalty.

My recent report for Outsell, for whom I do work as an affiliate news industry analyst, showed several widening chasms that news companies are seeing open up before them as the Internet habits mature and harden. That 39-page report, based on a survey of 2800 respondents, is available as a complimentary download.

Chasm is the word that sums up much of what we found:

• While newspapers in print  still command a good audience for all kinds of news and events, there's a huge gap between their print products and their owned online products. While newspapers can count on 4, 5 or 6 of 10 people to read them for the vitals, less than 2 in 10 turn to their online sites. Loyalty to print brand is not being transferred.
• Take another less-publicized gap. What is a newspaper classically, but a great reading-and-shopping medium. We read the news. We shopped the stores. We used the classifieds. And the money from advertising magically funded the newsrooms. A true virtuous cycle. Virtue be damned; the cycle's busted. Not only is classifieds share being grabbed by non-news companies. What is also going on, less understood, is that the Internet in allowing us to research purchases from cars to sinks to Hawaiian vacations makes increasingly obsolete using the newspaper to research purchases.  As that break becomes more complete, the news companies' commercial connection lessens -- and with it the flow of ad dollars.
• Then there's the gap, also in the report, about vertical content in the key health, wealth and travel areas. In all these areas, consumers -- being no fools -- are using the vast resources of the web to plan, to research, to compare, to share info and to buy. They name the Internet as the #1 source of info on these topics. Why are these topics key? They each involve a good flow of dollars from pocketbooks to businesses, and online that means higher effective CPMs. Newspaper sites, largely woeful in these areas, aren't capturing enough of these visitors or related dollars.
• Last, of course, the generational gap we've all sensed. But it's not a gap, but a chasm too, when you ask people their preferences -- really how their habits have formed -- when it comes to getting news and info. TV is the oldest, fogeyist medium, but print newspapers are second. We've known that the average newspaper reader is 55, but look at the age-related preferences in the report and you can see how clear the lines demarcate usage and enthusiasm for usage by generation.

What are we to make of all this?  We may conclude that the first generation of newspaper web sites haven't  succeeded -- is failure to strong a word? Web users, and especially young ones, do voraciously consumer news and info. They are most comfortable with the ease, and aggregation power, of  Yahoo News, Google News, MSN and Topix, among others. Why drive to a string of forlorn standlone shops when you can park once and get everything you want at the mall?

As we move into the real second decade of the Web, news publishers both need to reenvision their own newspaper sites and their relationships with the GYM sites and see what new directions may secure their futures.  It will be a sobering exercise, but time's a-wastin'.