Report: News-oriented Websites Have a Future

NEW YORK (AdAge.com) -- News on the web has a future -- and not just for sites that don't pay their bloggers, like The Huffington Post, but for cost-intensive operations such as The New York Times, too. "Small website operations can be self-sustaining," writes the report's author, ContentNext Research Director Lauren Rich Fine, "but life is easier at the mega traffic sites." Challenge for sites The challenge for all sites is garnering enough traffic and creating a discernable enough brand to make advertisers seek them out. "Based on our research, the conversation [with advertisers] gets interesting at 200 million page views plus a month, but much more so around 800 million," Ms. Fine writes. Those ambitious numbers, she continues, show how hard it is for local news sites to be really profitable, and underscore "why local papers will have trouble offsetting traditional media declines" with revenue from their websites. The report also looks at whether the Times could ever succeed as a web-only product, and concludes that it could -- once NYT.com starts generating 1.3 billion page views a month. By Ms. Fine's back-of-the-envelope calculations, that kind of traffic would bring in $300 million in quarterly advertising revenues, about what the flagship paper is expected to generate in the fourth quarter. The Times' site had 173 million page views in October, according to ComScore Media Metrix. Yahoo, AOL at billion mark Ms. Fine said sites such as Yahoo News and AOL News already get in the neighborhood of a billion page views a month, and it's not out of the question that NYT.com could too. "The fact that there are sites out there that are already achieving that suggests that this could work," she said in an interview. Analysts don't dismiss the possibility of a major newspaper's website eventually either replacing the print edition or making up for the continuing decline in print-ad revenues. But that kind of success is a long way off. "If anyone's positioned to have online [growth] offset pressure on print advertising, it's the New York Times or the Wall Street Journal," said Mike Simonton, a media analyst at Fitch Ratings. "But they're years behind that pace." ~~~ Matthew Flamm is a reporter for Crain's New York Business.

Report: News-oriented Websites Have a Future

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