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Newspaper Economics – Online vs. Print Revenues

May 7, 2007

I have blogged previously about the economic interplay of the news/story content creation, advertising (classified and display) and circulation (printing and distribution) silos of the newspaper business.  A Wall Street Journal article has some interesting data that seems consistent with what I have seen.  The difference between a newspaper’s ability to generate revenues online and off goes a long way to explaining the newspapers efforts to keep a kung fu grip on tradition revenue streams.  This data often looks strange to people with more experience online than off (for example, see some of the comments at Freakonomics).  The geographic monopoly and passage of 100+ years of doing business have given this business time and space to learn to generate cash.  And the age of the business and its slowness to move to "cool" Web technologies has kept many of us from looking closely at the newspaper business.  The magnitude of the advertising revenues, the margins on advertising, the overall profitability of newspapers, average salaries of employees, etc. surprise many of us in the online world.

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