Technology | Media | Telecommunications

Friday, October 21, 2011

Publishers will Embrace eMagazines and eNewspapers

According to the latest market study by Juniper Research, annual revenues derived from eNewspapers that are delivered to portable digital devices will exceed $1.1 billion by 2016 -- with publishers increasingly adopting subscription-based applications to counteract their falling print publication sales.

The Juniper market study noted the surge in Apple iPad adoption led a number of newspaper publishers to move beyond standalone smartphone apps towards more integrated digital media 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 paywall-based model would almost certainly result in a substantial decline in the digital media user base.

Despite this, for many publishers the revenues that accrued from a moderate user base paying a modest subscription charge would outweigh the initial loss of CPM (cost per mille)-based advertising revenue.

However, the Juniper report stressed that many newspaper publishers would struggle to bridge the gap caused by the dramatic decline in sales from existing 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 requirement would therefore put further pressure on their profit 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 or magazine-style content on media tablets -- with content derived from social media, RSS feeds and brand partners.

According to report author Windsor Holden, "The problem facing traditional 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 Juniper Research report include:
  • 5 million consumers will access eNewspapers over tablets or eReaders by the end of 2011.
  • Tiered content pricing will become increasingly popular in the eMagazine space.