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Posts Tagged ‘Matt Shanahan’

Can Online News Revenue Ever Equal Newspaper Revenue?

Newspaper ad revenue is shrinking, and signs look bleak as to whether it will make a comeback. But the silver lining, many believe, is that online news sources make news more and more available to readers, so reader engagement with the news should be on the rise. As soon as we figure out a way to effectively monetize online news consumption, the revenue slump for news will be over. Right?

Well, before you get too hopeful, recent data is showing that overall engagement with the news is actually shrinking in the digital era. Matt Shanahan at Digital Equilibrium takes a look at the grim numbers:

According to the Newspaper Association of America data at naa.org, the average user spent 1 minute and 12 seconds with online news last month.  That is 0.6% of the 3 hours and 25 minutes an average user spent online in 2010 according to eMarketer.  And when compared to average time spent with the print newspaper, online news engagement is 4.1% of the reported 29 minutes per day of Nielsen Media Research Study of 2006.

So not only have subscription rates and advertising gone down, but actual engagement with the news is falling. The takeaway? “Online news will never equal the revenues or profits of a newspaper.”

So, any other new ideas?

The chart showing lost engagement and lost revenue is after the jump.

Read more

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Content Farm Company Demand Media to Go Public

Santa Monica-based content farmer Demand Media has announced its intention to go public. In what may be the first IPO of 2011, Demand Media will offer up 7.5 million shares in an effort to raise up to $138 million in capital. Underwriters Goldman Sachs and Morgan Stanley seem to think the company could be worth up to $1.3 billion.

Not everyone is convinced, citing Demand‘s over-reliance on Google for ad revenue.

Scout Analytics senior vice president Matt Shanahan spoke to FOLIO last year about Demand: “If you take what they say about uniques–86 million–and break down revenue per user, that’s $1.60 per user. Look at how many page views they have over a year and how many users they have to accumulate over time. All it takes is an SEO engine to change their algorithm and they lose their traffic.”

Yeah, think we’ll be investing elsewhere… Ah, who are we kidding. These days, we’re not investing in anything that isn’t food or rent.