Yankee Group predicts online newspaper shakeout

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A shakeout in online newspapers looms over the next four years, according to new research from the Yankee Group consultancy. Yankee attributes the shakeout to high startup costs and a revenue stream that continues to be driven by slow-growing ad support.

Ad revenue will account for 85% of annual revenues, with subscriptions 10% and other premium pricing accounting for 5%. Newspaper startup costs of under $100,000 were reported by 30% of Yankee group respondents; between $100,000 and $500,000 by 45%; and over $500,000 by 25%. Fewer than 20% of online newspapers in the survey plan to offer subscriptions over the next two years.

Copyright August 1996 Crain Communications Inc.

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