AUDIENCES AREN'T DESERTING THE WEB

By: Steve Outing It's been one bad headline after another for the media industry
in recent months. And one even worse headline after another for
online media. As a result of the dot-com depression, many media
people appear to be losing faith in the Internet as a viable
commercial publishing medium.

That's a big problem. Because today's Internet economic reality
doesn't jibe with usage patterns and trends. Indications are that
the Internet is going to be just as important a medium as we all
thought it would be two years ago -- in due time, and after the
next economic upswing.

Not to understand that now will prove to be a grave mistake.

The next step

While I've been as depressed as many of you about the state of
the Internet economy, I recently came across research that offers
some hope -- and insight into what we need to do next within the
media industry.

Lyra Research, a 10-year-old, Massachusetts-based research
publisher, recently introduced its Content Intelligence group,
which produced its first monthly publication in May.
(The company produces an independent Internet-related media study
each month, and funds it by selling annual $500 subscriptions to
its publications and data.)

Its second published research project, due to be released this
week, includes some interesting information on consumer behavior
and attitudes about newspapers and the Internet. (Lyra plans to
focus the June edition of its research on newspapers; future
research will cover other media and their relation to the
Internet.)

To sum up the research quickly, when Internet users are randomly
surveyed, the Web continues to come out on top in terms of
importance to news consumers, and usage patterns. And the more
experienced people are in using the Internet, the more they use
it and enjoy it over newspapers.

For instance, Lyra's researchers asked (a statistically weighted
sample of more than 1,300 Internet users) which was a more
important part of their daily lives: the Internet or newspapers.
About two-thirds chose the Internet; 22% said newspapers. (The
balance had no answer.) And of those who chose newspapers, that
group was dominated by people over age 45.

The researchers also asked, if you had more free time available
to you, what media would you spend more time with? The biggest
group, 46%, said that they'd spend more time using the Internet.
Additional television viewing came in second at 29%; reading
books came in next at 11%; then reading the newspaper came in as
the top choice for only 5% of the respondents. Magazine reading
and radio listening each got only 3%. (An interesting aside:
Books have increased their ranking as favored free-time medium,
possibly because of increased Internet usage and information
overload. Books may fill a need to "de-stress" in an information-
overloaded society.)

When asked which media they most "look forward to using" and
"enjoy," the Internet won in a head-to-head comparison with
newspapers by 80% to 15%. When asked which media is the "most
important" part of their daily routine, respondents chose the
Internet over newspapers, 64% to 22%. Even when asked which
medium provides the "most important information to you," the
Internet came out on top over newspapers, 43% to 40%.

More e-experience, more time spent online

John McIntyre, managing editor of Content
Intelligence, says that what's most fascinating about his
firm's findings is that they indicate a change in media usage
habits based on how long people have used the Internet. As people
get more experience using the Internet, they increase the time
spent online and reduce the time spent reading printed newspapers
(as well as other traditional media).

Consumers having more Internet experience is not necessarily good
for newspaper Web sites, McIntyre points out -- and as time goes
by, a newspaper's readers will gain substantial Internet
experience, and more of them will go online. "We found that, by
and large, when people move from print to the Web, most of the
time they don't choose to use Web sites of newspapers," he says,
but rather seek out other Web information sources. That shouldn't
be a great surprise, since there's so much content to choose from
online.

It should indicate, of course, that newspapers need to beef up
their Web site offerings -- so that as people gain Internet
experience and use print less, there's incentive to use the
newspaper site over all that online competition. (Alas, in the
current downturn, many sites are spending less on creating
original content for their online operations -- exactly opposite
what they should be doing.)

McIntyre says that employment is one area where the Lyra research
indicates erosion by newspapers. When given five media options
for looking for employment, 32% of Internet-using respondents
preferred to use the Web. "That's a lot," he says. Lyra's results
echo a recent study by Greenfield Online, which showed
that by a two-to-one margin, Internet users preferred searching
online for jobs over looking in the newspaper.

Lyra also noted a propensity for Internet users to prefer online
for real estate information, especially among the better educated
(and thus higher income). Among Internet users who have a
graduate education, 59% chose the Web as their favorite source of
real estate listings and information, versus 37% who preferred
newspapers.

Lyra even found some erosion in use of newspaper obituaries,
noting growth in use of the Web for finding obits.

Research, research, research

I find Lyra's research to be notable in part because of its
independence. The company would appear to have no axe to grind.
Besides making money selling research subscriptions, "we just
want to know what people think," says McIntyre. He suggests that
"we are asking questions that others aren't asking." Research by
newspaper (and other media) industry associations may approach
the topic of media usage with different goals.

Within the newspaper industry, some research has offered up
similar findings. An early 2000 study funded by the
Newspaper Association of America
concluded, "The addition of the Internet to the list of media
rated, reveals the fact that among those with an opinion,
satisfaction levels for the Internet are slightly higher
than they are for weekday newspapers and equal to Sunday
newspapers overall. ... These higher satisfaction levels for the
Internet among more of its regular users suggest that as usage of
the Internet grows, satisfaction levels may rise as well."

The NAA research also documented a rise in Internet usage,
coupled with declines in average time spent reading newspapers.
Those surveys were conducted before the dot-com crash, but Lyra's
2001 research shows that the downturn -- and a wave of media
stories portraying the death throes of online media -- haven't
shifted the overall trend. Internet usage is increasing;
satisfaction with the Internet as a news/information medium is
rising; and consumers appear undaunted by the doom-and-gloom
coverage of the Internet and continue to use it more and more.

So, what we've got today is a disconnect between the public
(increasing numbers of people using the Internet, and longer
usage averages as online users gain Internet experience) and the
financial markets.

I think that the path we take in the next year is an obvious one.
The millions of people who have learned to make online media
consumption a habit are unlikely to revert to favoring newspapers
or television over the Internet. The public doesn't care if
Internet publishers are starving. They just want their news and
content, and it's the publishers' jobs to figure out how to make
money.

McIntyre points out that historically, newspapers have lost
audience share whenever a new medium comes along -- radio,
broadcast TV, cable TV. The same is happening with the Internet
as it becomes more of a medium used by mass audiences.

Just look at the numbers. The biggest media Web sites get
millions of users each month. Jupiter Media Metrix figures show
that MSNBC.com and CNN.com each get more than 9 million. Since
time available for people to consume news is finite, obviously
those online media users are taking time away from other media.

Even if some publishers today may wish to delude themselves into
thinking that the dot-com depression changes this, it ain't so.
The audience is shifting its allegiance online (not giving up
newspapers, but lessening their dependence on them -- and finding
increasing satisfaction and enjoyment in using the Internet).

Your mission, Mr./Ms. Newspaper Publisher, is to figure out the
online money stuff. Audiences for media are shifting their
behavior. They don't care about your money woes.

More on e-newsletters

Keith Porter, About.com's guide for world news, writes:

"I just read your column on e-mail newsletters, and it sparked
an idea. What if newspapers bundled print subscriptions with their
e-mail subscriptions? If I subscribe to the print version of
paper X, maybe I should be able to get the e-mail version free or
at a dramatically reduced rate. As you say, the e-mail version
could contain content not available in the print version ... or
links to extra information on stories in both the print and e-
mail version. Plus the e-mail subscription could offer me
breaking news alerts throughout the day ... so it becomes a
'value-added' to my print subscription. Special pricing
structures could be established not unlike the ones newspapers
use to offer Sunday-only or weekday-only plans. This has the
potential to increase print subscriptions AND build a solid core
of e-mail subscribers."

Other recent columns

In case you missed recent Stop The Presses!, here are
links to the last few columns:
o Newspapers, Syndicate To Sell E-newsletters, Wednesday, June 13
o A Solution To the Pay-vs.-Free Dilemma, Wednesday, May 23
o Two Money-making Techniques You Haven't Tried Yet, Wednesday, May 9
o Archive of columns

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Steve


Got a tip? Let me know about it If you have a newsworthy item
about the online news/interactive news media business, please send me a
note.

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This column is written by Steve
Outing for Editor & Publisher Online. Tips, letters and feedback
can be sent to Steve at steve@planetarynews.com


Copyright 2001, Editor & Publisher.