It's a dilemma, no question, and it was high on the agenda at a recent conference of Web folks at the Poynter Institute. Revenues from online operations are soaring, but from a very low level -- and they remain far, far below the revenues that are coming in from print advertising.
NY Times: Can Papers End the Free Ride Online? This migration of readers is beginning to transform the newspaper industry. Advertising revenue from online sites is booming and, while it accounts for only 2 percent or 3 percent of most newspapers' overall revenues, it is the fastest-growing source of revenue. And newspaper executives are watching anxiously as the number of online readers grows while the number of print readers declines. "For some publishers, it really sticks in the craw that they are giving away their content for free," said Colby Atwood, vice president of Borrell Associates Inc., a media research firm. The giveaway means less support for expensive news-gathering operations and the potential erosion of advertising revenue from the print side, which is much more profitable.
Newspapers had already trained readers to consider the news almost free, anyway. After all, circulation (subscription and newsstand sales) revenues account for a small percentage of all the money that comes in.
But there's a consequence for newpapers that go behind what Doc Searls and others call a "pay-wall" -- a loss of Web presence in a world where being absent from the Web is, for many younger readers, like not being anywhere at all.
A difficult situation, for sure.