Does New Media Hurt Old Media? You Bet

By: Steve Outing

When I first started writing this column, some 2-1/2 years ago, there was much angst among publishers about how creating their own online services would impact their print products. Would creating a Web site cannibalize your newspaper or magazine -- especially since content on the Web is being offered for free, while the print product is not?

That thinking seems antiquated today. We are starting to see evidence that use of online services is cutting into traditional media usage in measurable amounts. The publisher who remains in the mindset of worrying about his own Web ventures cannibalizing his print product -- and thus holds back from competing aggressively in the cyberspace publishing market -- has some serious rethinking to do.

PointCast use hurts newspaper consumption

You may have noticed a news item last week from PointCast, the "push" news screen saver network that's installed on many office networks. The company commissioned a proprietary study by Austin, Texas-based research firm Intelliquest, which showed that PointCast users -- who are predominantly business people -- report that they now spend less time reading and watching other media. Among PointCast users, 46% say they spend less time reading newspapers; 23% spend less time reading magazines; and 21% say their television viewing has declined.

Intelliquest also conducts regular tracking surveys of Internet usage for the U.S. market, watching Internet-using consumers' media consumption habits. According to Intelliquest's managing director for Internet services, Tom Fornoff, when tracking the overall online consumer audience, TV gets hardest hit by Internet usage; 26% of Internet users watch less TV than they did a month ago. Reading in general (books, newspapers and magazines) fares better, with 10% saying they do less reading than a month ago because of their Internet use. (Thus, PointCast's greater impact on newspapers than television appears to be an anomoly, although it might be explained by PointCast's business-heavy audience.)

Tom Miller, vice president of Cyber Dialogue, an Internet research company that recently acquired Miller's Emerging Technology Research Group from Find/SVP, has been following this issue since 1995. The main negative impact on traditional media use is found among "Internet enthusiasts" rather than "newbies," he reports. Of the enthusiasts, 52% watch less TV, presumably because of the Internet. Of other groupings -- young professionals and mature professionals, young and mature leisure Internet users -- between 35% and 38% report watching less television as their Internet usage increases. Only 14% of newbies watch less TV.

Newspapers fare better than the tube, mirroring Intelliquest's findings. The Cyber Dialogue-Find/SVP studies show that 30% of Internet enthusiasts spend less time reading newspapers because of the Internet, while among other consumer groupings, between 11% and 20% report less time spent with newspapers. Among casual users or newbies, only 7% spend less time reading newspapers.

Overall, Miller's numbers find that 16% of Internet users report a decrease in reading newspapers and magazines, and 35% watch less TV. Interestingly, the activity that gets hit hardest after television watching is long-distance phone calls, which are down for 22% of Internet users. Radio fares best with the least impact from Internet usage, perhaps because many Internet users listen to the radio while surfing the Web or checking e-mail.

The Cyber Dialogue-Find/SVP numbers do show a small group of Internet users who actually have increased their traditional media consumption. 4% of Internet users report increased TV watching, and 6% report an increase in newspaper reading. Nevertheless, the downward trend for "old media" is obvious, as between 1996 and 1997 there is shown in the group's statistics an increase in the percentage of Internet consumers using newspapers less, and a decrease in Internet users who read newspapers more.

Business users the first to switch

As evidenced by the PointCast proprietary study, it's business users who are making the fastest transition to new media and away from the old. Says Miller, "We definitely hear in focus groups that business users are reading less as a result of using online news services. We still don't hear them actively cancelling print subscriptions, but we definitely hear them say that they just don't have time -- or patience -- to read print as much. For consumers, we think it's much less of a trade off."

Likewise, the online medium is "moving fast to make inroads in the business user environment," Miller says. "Business users simply don't have enough time to read anything anymore, which makes online filtering and personalized news retrieval a very powerful resource."

Miller notes that consumers are fast adapting to using the Internet for commerce, and when in purchase mode are using the Internet in place of print to identify possible vendors and obtain product information. So, "print advertising may be suffering a loss of impact among consumers who use online services, even though print publications may not experience a direct loss of subscribers," he says. "This is too hard to quantify, but we are certain it is happening due to comments we've heard in focus groups."

Cannibalization realized

Miller says that his group has done proprietary research work "that suggests that a traditional news company's Web site can clearly decrease use of the core product. I think our general surveys confirm this probability simply because online now makes up around 20% of total news intake for users of online news. That means it has to come from somewhere."

(Cyber Dialogue-Find/SVP's numbers show that for all Web users who retrieve news online, they get 35% of their news intake from television, 24% from printed publications, 21% from radio, and 18% from online sources.)

Publishers used to be heartened by the notion that a news Web site could actually increase print sales, by exposing the newspaper to new audiences. If that was the case earlier on in the Internet publishing revolution, it no longer appears to be the case. (In my earlier reporting on the Internet news industry, I did run across considerable anecdotal evidence that newspaper Web sites can help -- albeit very modestly -- the core print product.)

What should publishers make of this? The answer should be obvious. Online usage -- now at 57 million people over the age of 16 in the U.S. alone, according to Intelliquest -- is having an impact on traditional media like newspapers, magazines and television. It's no longer conjecture; we now have the research to back it up. And as Internet usage grows even more, traditional media will continue to be chipped away by online media.

This should be a wake-up call to any who still doubt the impact that the Internet can have on traditional news publishing. Newspapers, magazines and TV stations must increase their efforts to earn revenues from their Internet ventures. The alternative is to see Internet usage continue to chip away at their core business, and not have that lost money be earned in other businesses.

Contacts: Tom Fornoff, tfornoff@intelliquest.com
Tom Miller, findsvp@aol.com

Steve

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This column is written by Steve Outing exclusively for Editor & Publisher Interactive three days a week. News, tips, and other communications may be sent to Mr. Outing at steve@planetarynews.com

The views expressed in the above column do not necessarily represent the views of the Editor & Publisher company