The quest of newspapers to make their online journalism profitable is still a big challenge. This week Hal R. Varian, Google’s chief economist since 2007 and emeritus professor at the University of California at Berkely, gave a presentation on „Newspaper Economics“ at Google’s Berlin office. Maybe this was in reaction to the very critical open letter „Why we fear Google“ to Eric Schmidt by Mathias Döpfner, CEO of Europe’s largest publishing house Axel Springer. Since I found Varian’s keynote very interesting, I sum up some of his findings and theses.
– Online access to news is still very popular, but people spend only little time on them. A major reason for this is the tough competition for attention especially by social media. The short time spent on news is a big problem for the ad revenues of newspapers.
– People access online news more frequently, but read them less than in print media.
– Revenue from news access per minute is the same online and offline.
– Therefore, newspapers must increase user engagement. The goal is to make users spend more time on newspaper websites.
– To achieve this, newspapers should experiment, experiment, experiment!
– Recommendation for a new business model: task-based monetization. This means users shall answer survey questions for market research before they can access premium content for free in exchange. If they do not answer, they have to pay for this content.