Annual revenues from eNewspapers delivered to portable devices will top $1.1 billion by 2016, as publishers increasingly deliver content via subscription-based applications to compensate the loss from print sales, according to a new study by Juniper Research, cellular-news reported.
The report said one of the key drivers for newspaper publishers to move beyond standalone smartphone apps towards integrated digital strategies is the surge of iPad adoption. Companies such as News International have started to offer a single subscription price, with which users can access content across all digital platforms.
Also, shifting to a paywall model would almost cause a substantial decline in the digital user base. In spite of this, “for many publishers the revenues that accrued from a moderate user base paying a modest subscription charge would outweigh initial loss of CPM (cost per mille)-based advertising revenue,” the report stated.
However, many publishers would struggle to bridge the gap caused by the serious downturn in print sales. Moreover, the ubiquity of free news and online sources force publishers to set digital subscription prices markedly lower than print in order to reach a critical mass of users. This, in turn, would put further pressure on margins, according to Juniper Research.
Meanwhile, pressure could also comes from the emergence of ‘NeoNewspapers’, such as The Early Edition and Flipboard which essentially create newspaper/magazine-style content on tablets derived from social media, RSS feeds and brand partners, Bloomberg Businessweek reported.
“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?” said the report author Dr. Windsor Holden.
Image: Paulino Figueirido DPP