E-Newspaper Business Models for Attracting Younger Readers

By: Steve Outing

Some new research just published by Glen Cameron of the University of Georgia suggests that college students "found actual use of a full-featured electronic newspaper fun, easy and appealing." However, they are not inclined to pay to subscribe to an electronic newspaper service, which has some implications for the business models being formulated by newspaper publishers.

Cameron's research, which is available on the World Wide Web at http://www.grady.uga.edu./protopapers/reports/reports.html, includes an overview of 4 major business models for electronic newspaper services, and looks at the prospects in each for attracting young people as users.

In Cameron's research, 84 college students were quizzed about their computer, online and media use. Then they were asked to use a full-featured electronic newspaper service, and then quizzed again about computer and media use after having the in-depth online experience.

"The electronic newspaper was generally well received, particularly by accomplished computer users," Cameron says. "However, students were not particularly inclined to subscribe to an electronic newspaper."

College students are an appealling and potentially profitable market for online newspaper services, Cameron suggests, so it's obviously important to consider them in formulating your business model. His research provides an overview of 4 pertinent online newspaper service business models:

New subscriber model

The premise of this model is that as print newspapers' penetration in the young-adult market continues to decline, electronic newspaper services represent a viable medium for attracting younger readers. This model suggests that publishers invest in electronic delivery methods in order to attract a new set of subscribers who are not inclined to purchase the print product (and thus it does not cannibalize the print edition). In this model, the online product becomes a distinct "publication" with its own readership base -- which is fundamentally different from that of the print product.

Maturation model

This model suggests that electronic newspaper services provide a way to establish news-reading habits in younger people, who as they get older will gravitate toward print readership of newspapers. The concept is similar to "Newspaper In Education" programs, which try to instill the habit of reading a paper in the hope that as the children grow older, they will become long-term newspaper readers. Electronic newspaper services thus are not viewed as a long-term draw, but more as a "marketing device" for printed papers.

Multiple subscriber model

Under this model, electronic newspaper services serve to provide consumers with a unique source of news and advertising, such that the newspaper service is only one of several news sources used. Here, newspapers can provide information that is available only from its electronic service: searchable local classified ads; regional advertising such as state-wide employment listings; local news content about local communities that cannot be found in print; and specialized sports or business coverage.

Economic efficiency model

This model justifies electronic newspaper services "in terms of economic efficiencies associated with electronic delivery." No expensive printing presses required; the cost of server hardware and Internet connections is reasonable; and publishers can leverage their existing news-gathering resources to create an electronically delivered product. There are efficiencies for advertisers as well, with improved message targeting and ad customization for specific groups of computer users. Also, electronic delivery enables newspapers to facilitate (and profit from) merchant-buyer transactions.

An examination of how young adults respond to electronic newspaper services can help publishers in assessing the value of the 4 widely used business models described above, Cameron suggests.

In my view, the New Subscriber Model holds the most promise when viewed from the perspective of attracting young people, for the reasons Cameron suggests. Many of the young new users an electronic service will pick up are not likely to become long-term print newspaper readers anyway, so you have nothing to lose in courting them to use an electronic service that could be considered a replacement for the print product.

For so long, publishers have been creating online services with the premise that they are supplemental to the printed newspaper. Well known statistics about the decline in young-adult newspaper readership, and Cameron's and others' findings that college students tend to embrace electronic media (and view print newspapers as the medium of choice for their parents' generation), suggest that a wise strategy is to create electronic products aimed at young people that are more than supplements to the newspaper. An online service that aims to be the primary information source for the 18-24 market -- with the assumption that these are not newspaper print readers, nor are many of them likely to become so -- stands a better chance of attracting a loyal user base than a service that still relies on the print product as its core.

As Cameron's research points out, this age group is unlikely to pay for such services, so, predictably, advertising is the key to making young-target-audience services pay off. The goal of attracting young people to newspaper online services calls into question the strategy of Knight-Ridder Newspapers and an increasing number of other publishers who are putting up subscription charges for access to their full content.

Iditarod coverage

When a major event takes place in your back yard, its de rigueur for newspapers these days to put up special coverage on the World Wide Web. The Anchorage Daily News has done that with in-depth coverage of the Iditarod dog-sled race. Such events present good opportunities for a local newspaper to increase its non-local readership at least temporarily, and provide national advertisers with an attractive vehicle.

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This column is written by Steve Outing and underwritten by Editor & Publisher magazine. Tips, letters and feedback can be sent to Steve at outings@netcom.com