Commentary

Just An Online Minute... Good News AND Bad For Online Papers

Here's the good news. The online readership for newspapers continues to rise.

Last quarter, more than 59 million U.S. Web users visited newspaper Web sites, up 5.3% from the first three months of 2006, according to Nielsen//NetRatings data cited by the Newspaper Association of America. For the quarter, visitors to the newspaper Web sites tracked by the group saw an average of 3 billion pages, up almost 11% from 2006.

But here's the bad news. Online revenue at newspapers isn't growing as fast as the companies had hoped. At Tribune Co., interactive revenue grew 17% in the first quarter -- which, while healthy, marks a steep drop from last year's 30% growth. Gannett Co. also saw dwindling growth, and the New York Times Co. warned that Web ad revenue hadn't climbed 30% for the quarter, as previously predicted.

Clearly, the newspaper industry needs to better monetize its Web traffic. How the industry intends to do so remains murky, but one option -- paid subscriptions -- seems like a particularly bad route. After all, it's unlikely that many people are willing to pay for articles they're used to reading online for free. Besides, the reality is, keeping copyrighted content from surfacing on free sites requires never-ending policing -- as Viacom, Universal Music and others feuding with YouTube have learned.

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