ISOJ 2006

1. The 7th International Symposium
on Online Journalism
April 7-8, 2006
The School of Journalism at the
University of Texas at Austin

2. Audience and Business Models:
Will the Online News Industry be Able to Finance
Quality Journalism?
Gary Meo
SVP, Print & Internet Services
Scarborough Research

3. Agenda
 Brief Scarborough overview
 Printed newspaper readership trend
 Newspaper web site audience – size and composition
 Newspaper company economics
 Things to think about . . . .

4. Scarborough Research
Local market syndicated study
 Measures retail behavior, media usage, demographics and lifestyle
 Ratings service for the newspaper industry
80 local markets measured plus the total U.S.
 Two phase methodology
 Telephone interview, mailed product booklet and TV diary
 130+ newspaper subscribers and 500+ advertising agencies

5. Average-Issue Newspaper Readership
58.6 54.356.9 55.1 55.4 54.1 52.8 51.6
68.2
63.766.9 65.1 63.6 62.5 61.2 59.6
0
25
50
75
100
1998 1999 2000 2001 2002 2003 2004 2005
Adult Penetration
Daily Sunday
Both daily and Sunday newspaper readership
continues to erode at a slow and steady pace.
Source: Scarborough Research Top 50 Markets, 1998-2005

6. We are talking about Readership, not Circulation
 Circulation
 Number of newspapers sold
 Audited by the Audit Bureau of Circulations
 Readership/audience
 Number of adults who read the newspaper
 Measured by survey research

7. Newspapers have pioneered the digital world

8. In November 2005, newspaper websites . . .
 reached an all-time high of 55 million users
 30% increase over November 2004
 30% of all active internet users visited newspaper websites in
November 2005
 unique visitors to newspaper Web sites jumped 21% from January 2005
to December 2005, and page views increased by 43% over that same
period
 11 of the top 25 national news and information Web sites are
newspaper sites
Nielsen Net//Ratings

9. Houston Chronicle Extends Its Reach Into
the Houston Market with chron.com
47%
57%
8%
6%
0%
25%
50%
75%
100%
Daily Sunday
Visited Chron.com only, Past 30 days
Houston Chronicle Cume Readers
55%
63%
Base: 3,939,303 Adults
Source: 2005 Scarborough Report, Houston DMA
Daily Cume – 5 Issues
Sunday Cume – 4 Issues

10. If Chron.com was a radio station, it would be the
number one radio station in Houston during morning drive
8.0
8.0
7.9
7.0
6.8
9.8
0 50 100
chron.com
KODA-FM
KLTN-FM
KTRH-AM
KRBE-FM
KMJQ-FM
Base = Houston Arbitron Metro Area (3,805,620 adults)
Stations Ranked on Cumulative Morning Drive Reach
Sources: Scarborough Research, Sep ‘04 - Feb ’05 (Current Six Months)
The past 7 day audience of Chron.com, compared to the weekly cumulative reach of the
top five radio stations during morning drive.

11. Print and Online are Complementary
Houston DMA
Source: Scarborough Research, Mar ‘04 - Feb ‘05
Daily Houston Chronicle Visited Chron.com
Avg-Issue Audience Past 30 Days
Men 107 98
Women 94 102
Age 18-49 78 111
Age 25-49 80 119
Age 35-49 95 133
Age 50+ 142 80
Less than High School Grad 41 17
High School Grad 84 62
Some College 111 112
College Graduate 146 176
Post Graduate 148 209
HHI<$25,000 72 32
HHI $25,000 - $49,999 84 73
HHI $50,000 - $74,999 93 110
HHI $75,000+ 134 155

12. . . . And with audience comes advertising revenue
 Advertising revenue for general market newspaper web
sites is expected to reach $2.5 billion in 2006
 Newspaper web site revenue will comprise 5% of total
newspaper revenue
 Newspaper web sites reach affluent, upscale and young
audiences
Source: Newspaper Association of America

13. Newspaper Revenue by Type
19%
81%
Circulation
Advertising
Source: NAA

14. Newspaper Advertising Revenue by Type
17%
37%
46%
National
Retail
Classified
Source: NAA

15. Things to think about . . .
 McClatchy buys Knight Ridder for $4.5 billion (32 dailies and internet businesses)
 In 1998, McClatchy bought the Minneapolis Star-Tribune for $1.4 billion
 Washington Post to cut 80 editorial jobs, 9% of its newsroom
 Debt ratings for the New York Times Company, Tribune and Scripps have been put
under review by Moody's Investors Service, with an eye to downgrades.
 Merrill Lynch downgrades Dow Jones from "neutral" to "sell“ on fears of slower than
anticipated revenue growth
 Block Communications, owner of The Toledo Blade and Pittsburgh Post-Gazette,
will close its five-person D.C. bureau, which has operated out of the National Press
Building since 1927
 In September, the E.W Scripps-owned Cincinnati Enquirer gave buyouts to 15
staffers, decreasing the newsroom from 80 to the current 65. If another five are lost
through buyouts, that would mean a 25% reduction in staff since last fall.

16. Things to think about . . .
 The New York Times launches “Times Select” providing access to specific content for a fee
($49.95 a year) and boasts 135,000 subscribers in its first two months.
 The St. Petersburg Times has begun offering free private-party classified ads. Individuals can
sell personal merchandise through free ads online and in print. Ads may be renewed one time
for free and sellers can purchase upgrades to enhance their ads.
 The Associated Press and MSN launched the AP Online Video Network providing 40 video
clips per day covering national, international, technology, business, and entertainment news.
 U.S. newspapers begin to introduce podcasting and vodcasting to reach young people through
digital channels.
 The Newspaper Association of America reported that total newspaper advertising revenue
grew 1.4% in Q4 2005, largely due to spending online. Print advertising revenue was up 0.4%
compared to the same period the previous year while online advertising jumped 32.5%.
 At the World Economic Forum in Switzerland, New York Times Company Chairman and
Publisher, Arthur Sulzberger Jr., said its online product, NYTimes.com, has moved from
"ancillary" to being "core" to the company's future.

17. gmeo@scarborough.com
www.scarborough.com

18. The 7th International Symposium
on Online Journalism
April 7-8, 2006
The School of Journalism at the
University of Texas at Austin