Annual revenues derived from e-newspapers delivered to smart mobile devices will exceed $1.1 billion by 2016, with publishers increasingly delivering via subscription-based applications to counteract falling print sales, stated new research.
The report, from Juniper Research, noted the surge in iPad adoption led a number of newspaper publishers to move beyond standalone smartphone apps towards integrated digital strategies. Companies such as News International have begun offering a single subscription price, enabling access to The Times across all digital platforms.
It observed that transitioning to a pay-wall-based model would almost certainly result in a substantial decline in the digital user base. Despite this, for many publishers the revenues that accrued from a moderate user base paying a modest subscription charge would outweigh initial loss of cost per mille-based advertising revenue.
However, the report stressed that many newspaper publishers would struggle to bridge the gap caused by the dramatic decline in sales from print editions. Furthermore, the ubiquity of free online news and infotainment sources obliges publishers to set digital subscription prices markedly lower than print to ensure a critical mass of users. This in turn would put further pressure on margins.
Meanwhile, these pressures are likely to be exacerbated by the emergence of ‘NeoNewspapers’. These are publications such as The Early Edition and Flipboard which essentially create newspaper and magazine-style content on tablets derived from social media, RSS feeds and brand partners.
According to report author Dr Windsor Holden: 'The problem facing publishers is twofold. Firstly, is their content sufficiently attractive to create a viable paying audience? Secondly, can they continue to sustain the costs of a print proposition during the migration to digital?'
Other findings from the report include: five million consumers will access e-newspapers over tablets and e-readers by the end of 2011; and tiered content pricing will become increasingly popular in the e-magazine space.