With the news that revenues for Daily Mail and General Trust brand MailOnline have grown 41% in the past year and daily unique browsers by 24%, it is clear that online media is finally beginning to fulfil its potential.

For the first time, growth in digital revenues has actually more than compensated for the decline in print revenues – a real watershed moment.

However, as the company is also managing the decline of its core print business, which still accounts for 85% of DMG Media division revenues, reasonably well, it shows that there is still a very prominent place for printed media.

The way that different publications are managing their accessibility and the results from this shows that there are many different approaches to monetising a digital audience.

MailOnline has digital sales of £62 million (including metro.co.uk, £60 million without), while the Guardian’s most recent figure is £55.9 million, which is likely to rise to about £70 million in the year to March 2014, both with free-to-access models.

Compare this with those brands operating behind a paywall: The Times/Sunday Times have estimated digital sales of £48 million while for Sun+ this figure is currently likely to be around £20 million. But with Sun+ subscribers having virtually doubled between December 2013 and November 2014, up from 117,000 to 225,000, if it continues this rate of growth it won’t be long before digital sales are in the £40-50 million range as well. And these figures are just consumer revenues, they don’t include any advertising sales they may be generating.

However, the industry does face a number of other challenges. For example, keeping up with the changing patterns of media consumption with the increasing ownership of mobile devices such as smartphones and tablets.

There is also the task of managing the gradual decline of their print businesses, while at the same time investing in developing their digital content platforms, whether that is a website, smartphone or tablet app, Facebook page, Twitter feed or WhatsApp alerts.

Although it’s in decline, for most newspaper publishers print still accounts for by far the largest proportion of their advertising revenues. Additionally, they still have a long way to go before their digital brands can match the circulation revenues (from the cover price of the newspaper) produced by print. DMG Media’s circulation revenues in its just-announced results were around £330 million. Add that to £190 million of print advertising revenues, and it is clear that they are still dwarfing its digital sales of £62 million.

Our research found that just 3% of adults have a subscription which includes digital/online access.

Converting more people is proving difficult as the ‘genie of free online news’ was let out of the bottle long ago but there is no doubt that people are gradually becoming more accustomed to paying for digital content now, whether it is downloading a film on Netflix or a music track on iTunes.

The problem is that it is extremely easy to find free online news, so publishers are having to try a variety of models to tempt people to become more loyal to their digital news brand.

Even if all the national newspapers converted to a paywall business model, they still face taxpayer-funded competition from the BBC offering extensive international, national and local news for free online, so how to monetise their growing online audience without driving them away remains a bit of a conundrum for publishers.

Essentially, they have a choice between a free access mass-audience model funded by advertising (think MailOnline, Guardian.com) or a paid-for access model with a much smaller audience and therefore perhaps more limited advertising revenues.

The mid-way option, currently taken by the Telegraph, is a metered paywall which allows people to view up to 20 items for free, after which they pay a small monthly charge.

In terms of delivering a volume audience, the free access model is clearly the better bet. Certainly, the digital advertising revenues being generated by the likes of MailOnline and Guardian.com are currently quite a bit higher than the subscription revenues generated by Sun+ and The Times/Sunday Times online.

Those operating behind a paywall would argue that their audience is more appealing to advertisers because they know so much more about them, in terms of their demographics and usage habits. And when you add in advertising revenues for the paywall brands, there is probably not a lot in it.

At the moment, it seems there is no right and wrong way to do it, with media outlets proving that news sells with or without a pay wall.

Contact us

The addresses and phone numbers of our offices can be found below.
This form will enable us to route you to the right person and answer your query faster.
Thanks for your time.

Read More
© 2016 Mintel Group Ltd. | Privacy Policy | Legal | Cookie Use