A Glimmer of Hope for Newspapers
News consumption in the United Kingdom
rose by 20 percent in the past three years,
according to new McKinsey research.
Average consumption has risen to 72 minutes a day,
compared with 60 minutes three years ago
-an increase driven almost entirely
by people under the age of 35.
Two-fifths of those in this age group
said they felt the need to be the first to hear the news,
compared with just 10 percent of people aged 55 to 64.
This need for immediacy is reflected in
younger news consumers' choice of media:
they overwhelmingly prefer to get their news
from television and the Internet.
While television remains the most popular medium
across all age groups, only the behavior of
consumers 55 and older prevented the Internet
from jumping from fourth three years ago
to become the second most popular news source today.
Instead, the Internet is now in third place,
just behind newspapers.
These findings underline the challenges
that lie ahead for newspapers,
in the United Kingdom and elsewhere,
that are struggling to address long-term circulation
and advertising declines caused mainly
by the growth of online news consumption
and Internet advertising.
Some newspapers are eyeing differentiated
and innovative revenue models for their online content.
But these won't be a silver bullet:
we found that while there is modest potential
to increase online revenues, they will be insufficient
to compensate for the decline of print.
Indeed, even in a hypothetical situation
where online-only versions of existing newspapers
and magazines cost 75 percent less than the print versions,
only 14 percent of news consumers said
they would pay for the online content.
One finding does suggest a potential revenue opportunity:
newspapers have an important inherent advantage
as they face the challenges of the digital age
-trust. Consumers trust newspapers
more than any other medium,
and 66 percent describe newspaper
advertising as "informative and confidence inspiring,"
compared with only 44 percent for TV
and 12 percent for the Web.
This suggests that newspapers have further scope
to go beyond news, to drive reader interest
and advertising revenues at the same time.
Leading newspapers have already created specialized pages
and sections in areas such as entertainment,
eating out, travel, automobiles, shopping, real estate,
and personal finance.
The combination of editorial content, ads,
and selected commercial offers
-while clearly separated-benefits advertisers
and is of practical use to readers.