Research gives merit to both digital-first and subscriber-first strategies

By Gary Meo

There has been much debate about print versus digital. 

Many argue that print is the past and digital is the future. Others argue that loyal print readers, who are willing to pay higher subscription prices, will be around for a long time.

This debate is reminiscent of the fable about the traveler and the ass.

A traveler in need of transportation hired an ass to convey him on his trip. The day being very hot, the traveler stopped to rest and sought shelter from the heat in the shadow of the ass. The shadow provided protection for only one, and as the traveler and the owner of the ass both claimed it, a dispute arose between them as to who had the right to the shadow.

The owner maintained that he had rented the ass only, and not his shadow. The traveler asserted that he had, with the hire of the ass, also hired his shadow. The quarrel proceeded from words to blows, and while the men fought, the ass galloped off.

The moral of the story is that when quarreling about the shadow, we often lose the substance.

The debate is not between digital and print. That’s quarreling about the shadow.

We must embrace the truth about today’s media audiences: they want what they want, when they want it, however they want it. That means that our content must be available on the platforms our readers want – in print, online, and on mobile devices.

The answer to the question of print or digital is a resounding “yes.”

Passionate print readers

Scarborough conducts syndicated consumer behaviour surveys in 77 U.S. markets – and the total U.S. – and is the primary source for newspaper audience information. Much of the information included here is from Scarborough’s most recent surveys.

For many newspapers, print still provides the largest portion of overall audience.

Each week, 61% adults in the United States age 18+ read a newspaper in print. That’s more than 144 million adults.

While the print audience has declined considerably over the past five years, it is still a very large audience: larger, in fact, than the U.S. adult television audiences of the Super Bowl, the World Series, or the Academy Awards, our research shows. 

If you look at all of the platforms on which newspaper content is available (print, online, and mobile), with the total net unduplicated audience equaling 100%, more than 60% of the audience accesses that content exclusively in print.

And let’s not forget that for most newspapers, 80% or more of their total advertising revenue comes from print advertising.

Some publishers are betting on the continued strength of this audience and have eschewed the popular “digital-first” strategy in favour of print.

The Orange County Register in Southern California is one example. At the Register, a “subscriber first” strategy has led to the hiring of reporters, the introduction of new sections, and a pressroom that is busy round the clock.

That is not what most newspapers are doing. In fact, it is the opposite. The leaders at The Register see opportunity in their large, passionate, and engaged print audience.

Each week, the Register in print reaches 41% of all Orange County adults age 18+. The printed edition reaches nearly half of all Orange County adults with annual household incomes of US$100K or more, and 43% of adults with college degrees or more. 

It remains to be seen whether or not the “subscriber-first” strategy will be successful. Certainly there will be challenges to growth as the print-exclusive audience continues to age. Nearly 45% of U.S. adults who read newspapers exclusively in print are age 55 or older.

Still, the print platform continues to be viable. Many publishers are using subscription-pricing strategies to gain more revenue from circulation as print advertising revenue declines.

Studies have shown that loyal print readers are willing to pay more to continue to receive their home-delivered printed newspaper.

As INMA’s executive director and CEO, Earl Wilkinson, wrote in his News Media Outlook 2013, “… for all the talk of digital and multi-media, there remains a passionate audience of print home delivery readers who cannot live without their print newspaper.”

Online audience growth

According to numbers provided by comScore to the Newspaper Association of America, newspaper Web sites attracted nearly 114 million unique visitors in November of 2012, reaching nearly 64% of all Internet-enabled adults.

That’s a 3% increase in audience compared to November 2011. Page views, total minutes spent on the site, and average minutes per visit are also up.

At Scarborough, we have been tracking a metric that we call Integrated Newspaper Audience (INA). The INA is the weekly net unduplicated audience of the printed newspaper and the newspaper Web site. Each week, 66% of U.S. adults read a newspaper in print or visit a newspaper Web site.

We can break down the individual components of the INA audience into print exclusive (read only in print) and Web-site exclusive (read only online). In our most recent data:

  • Of the INA audience, 8.6% is reading exclusively online, up from 5.3% three years ago.

  • During the same time period, the print exclusive audience declined from 74% to 71.7%.

Significant numbers of readers are moving online — some, no doubt, at the expense of print. But newspaper Web sites are gaining new audiences as well, audiences that are younger and very upscale compared to their print reading comrades. Among those adults who read exclusively online:

  • Nearly three-quarters are between the ages of 18 and 49.

  • Nearly one-third have annual household incomes of US$100K or more.

  • And 44% are college graduates or better.

Newspaper Web site visitors also spend more time and more money online compared to the average Internet-enabled U.S. adult. They are:

  • Nearly one-third more likely  to spend 20 hours or more online in an average week.

  • More than one-third more likely to have spent US$2,500 or more on Internet purchases in the past year.

It is clear that adults who access newspaper content online are, like their print counterparts, a very desirable audience for advertisers. And this audience is starting to generate more revenue for publishers.

According to figures compiled by the Newspaper Association of America, U.S. newspapers’ online revenues grew nearly 7% between 2010 and 2011, from US$3.0 billion to US$3.2 billion.

Going mobile

According to comScore’s “2013 U.S. Digital Future in Focus” report, smartphones surpassed 50% penetration in 2012. Tablets continued to gain traction, with 52.4 million U.S. tablet owners as of December 2012.

The rapid adoption of smartphones and tablets has further fragmented the media landscape, but has also created new opportunities for publishers.

According to Scarborough, in 2012, 14.2% of U.S. adults (nearly 34 million) read a newspaper on a mobile device in the past 30 days. That’s up from 10% in 2011. Of the 34 million adults who read a newspaper on a mobile device in the past 30 days:

  • 45% said they used a smartphone other than an iPhone.

  • 36% said they used an iPhone.

  • 25% said they used an iPad.

  • 5% said they used another brand of tablet.

  • 13% said they used another mobile device.

(Note: numbers don’t add to 100% because respondents can choose multiple devices.)

Regardless of the type of device, large and growing numbers of U.S. adults are accessing newspaper content on their mobile devices. They are also using their mobile devices to shop, compare prices, make purchases, and, generally, manage their lives.

Many Web sites are already seeing growing percentages of their audience traffic coming from tablets and smartphones.

The percentage of Web site traffic coming from mobile devices jumped from 17.5% in Q3 2012 to 23.1% in Q4 2012, according to a new report from Walker Sands Communications. That 23.1% share represents an 84% hike from 12.6% in Q4 2011.

Results from a Prosper Mobile Insights survey released in January showed that 34.7% of American smartphone and tablet owners surveyed said they would spend more time this year with their devices, compared to just 5.7% who said they would spend less.

Another positive development for newspaper publishers is that those adults who are accessing newspaper content on mobile devices tend to be younger and more upscale than those adults reading in print or visiting newspaper Web sites. 

Of those 34 million adults who read a newspaper on a mobile device in the past 30 days:

  • 78% are between the ages of 18 and 49.

  • 44% are college graduates or more.

  • 36% have annual household incomes of US$100K or more.

According to Borrell Associates, the amount spent by local businesses to reach local consumers via the Internet has grown from US$2 billion in 2003 to nearly US$20 billion in 2012.

If we look at the amount of that advertising that goes to mobile devices, that number has grown from about US$1 billion in 2011 to nearly US$3 billion in 2012. Borrell predicts that by 2016, 88% of all local online advertising will be spent in mobile.

Adults are going mobile and so must newspaper publishers. Mobile may be the newspaper industry’s best opportunity for growth.

Substance, not shadow

The debate is no longer between print and digital. Print is still a viable and, in most cases, profitable platform for publishers. Newspaper Web site audiences are growing and possess desirable demographics. And, it is not hyperbole to say that mobile is exploding.

So, next time – or if ever – you are seeking shelter from the sun in the shadow of an ass, remember that quarreling over the shadow may cost you the substance. If publishers choose to ignore this morality tale, they stand to lose a lot more than the donkey. 

About Gary Meo

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