Home » Blog » Digital First Media on HTML5 and Online Revenue
In three minutes, John Paton, CEO of Digital First Media, discusses:
Shifts toward online revenue streams to balance declining print revenue
Using HTML5, rather than apps, to engage readers on mobile and tablet devices
Trends in online advertising
-Video Transcript -
Paton: "Some metrics, for sure over the next 3-5 years what would you guess that print ad revenue is going to decline?...On about roughly 80% of your ad revenue, you can imagine that 7-10% of this is gonna decline each year over the next 3-5 years, I think thats kind of a given. So you start to think about what you need to do on the digital side and if you're not growing digital revenue, just do the math on that. If your sitting around 20%, if you're not growing between 70-100% on digital revenue, then you're just not gonna keep up. You won't replace all those dollars, but the profit, of course, on digital revenue is higher. It's easier to get to profit because we're not pushing out a certain number of papers. The big issue is what's going to happen to circulation or subscription revenue, if you will, hence everybody playing with paywalls."
OHT: How is Digital First approaching mobile and tablet devices?
Paton: "We kinda made a decision that by the time we would stabilize the company over this, you know, year and a half piece and get to the mobile piece, we kinda figured that HTML5 would be a much more robust platform than to think of the walled garden that an app would create. The second thing we started to think about was that, again, we didn't want something that fought our audience growth, and the second thing was that, I don't know about you guys, but Im beginning to think that icon on my phone, i've gotten ride of I can't tell you how many apps in the last year. You know, there's more off my phone than was on it when I first got the first version of iPhone, when I loaded up with everything. I think they are becoming, like, placeholders, like low channel numbers in an analog world where you were turning around. You had to get to twelve and then, you used to turn channels. Yes children you went like this."
OHT: What trends are you seeing in ad revenue at Digital First?
Paton: "On the JRC side of Digital First, half of the dailies at the end of Q3 either had more ad revenue than the year before, or their within two-percentage points. Now the industry average in the quarter was down ten year to date, its just on the NEA.org site you can check that. So clearly you can start to do it. I think the key thing is can you drive enough digital revenue, no matter if you're in Justin's business or mine, to create the products that you need to create, new products particularly. So this year on the tracker theres two months left in the year, the eighteen dailies at JRC, every one of them will have driven enough digital revenue to pay for their newsrooms, and some. It won't pay for everything else, at this point, but it has paid for the core thing about getting the products done. The second piece is, now can you pay to support the advertising effort? And then so on and so on."
A small cluster of newspapers in Northwestern Pennsylvania, halfway between Erie and Pittsburgh, in 1997 started a Web site — a basic operation that published some stories culled from their print editions to go along with obits and classifieds. Twelve years later, a lifetime in Internet years, they decided it was time for an overhaul — and while they were at it, they concluded it was best to affix a price tag to that content. » Read more
