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Newspaper Economics – Online vs. Print Revenues II

May 9, 2007

We hear a lot about how newspaper circulation continues to decline a few percent per year. Now that many newspapers have very active Web sites, how are online and offline audiences correlated? Based on current trends (decreasing circulation, increasing Web traffic), what can we say about the future of the newspaper business?

Some data will help build intuition and point us toward a model.

The figure below shows Newspaper Daily Ciruclation (from Info Please) vs. Unique Web Site Visitors (stats from Nielson) for about 3/4 of the Top 100 newspapers in the US.  The ciruclation numbers are daily circulation, while the traffic is given in unique Web site visitors per month. Download the combined data as tab-delimited text file.

This correlation gives a rule of thumb for comparing the relative success of newspapers in attracting online readers (see the formula in the plot). As circulation decreases, will online readership adauqately compensate?

The next step is to compare revenue generation per circulation and unique web visitor. Stay tuned…

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