Economics of the Web

Howard Owens talks about the economics of the web for the newspaper industry

He reminds readers of the words of Vin Ray

"as print edition circulation declines, the average newspaper will need between 20 to 100 website users to replace the revenues lost from each former print edition user.

Unless ways can be found to increase the per user revenues generated from newspaper websites, newspapers need to gain fantastic numbers of Web site users just to replace the declines in print edition revenues. A 50,000 circulation daily would need to gain a million to 50 million Web site users to postpone the time when it’s no longer economically feasible to produce its printed edition"

As Howard reminds us this is unknown territory for newspapers,it is unlikely that new media will get that sort of readership but,as a site starts to dominate its market,advertising revenues will go up and product diversification will take place.