The business model for advertising revenue, versus subscriber revenue, is so much more attractive. The hybrid model has some potential, but in the long run, the advertising side will dominate.

The bottom line is that a newspaper’s core business is selling advertising.

sigh… and i naively thought its core business was delivering news.

no wonder i don’t go there.

there’s advertising too you say? interesting. i wonder what it’s about?

This is an example of a publisher gone public. the are the biggest news site publishing the news NOW and selling advertising on the edges but not annoying. They even have the process of publishing right. Not once or twice every day but all day long. As soon as it happens.

Besides that we have our top quality news paper publishing a seperate tabloid sized newspaper aimed at young people. Lot’s of the info in the printed version refers to the site of the newspaper. Articles literally end with “More on nrcnext.nl”.

Jason you’re right. This is an investment gone the wrong way. They could better consider two seperate tracks.
1. Make an on-line newsservice not “papershaped” and target specific audience and eadvertsiers with this service.
2. Keep the dead tree version the way it is.

This would be less expensive for an investment. People used to on-line news gathering would adopt it. This strategy could generate an extra revenue source because advertisers should not have their advertisement published in the paper version as well as in the on-line version for the same price.

I feel this is a strategic stepping stone for Fairfax and a chance to make mistakes and learn lessons.

My frustration is more a function of the fact that, despite significant investments, they still can’t deliver a decent website. Despite ample examples around the globe, they still can’t come up with more interesting ways to sell their ads. Why not go to ad-supported full-text RSS feeds? Why include a mobile service that doesn’t work (either theoretically or practically)?

I am prepared to be proved wrong, but I reckon this thing will prove to be a colossal waste of money…

Now tell me honestly Sam, do you think this thing works?

In 2002 the online advertising spend in New Zealand was $0, and this year is expected to reach $100m – but this represents only one eighth of newspaper advertising revenue (print) expected for 2007.

In the US advertisers have been quicker to spend online; conservative forecasts for online advertising in 2007 are about a third of newspaper (print) advertising. This has driven US newspapers to invest in their online offering (I note your “state of the art” link lists only US newspapers).

In defence of New Zealand newspaper executives: why would they be investing in an area of their business that was not offering as much of a return? And what would shareholders say if they did throw money at an unprofitable area of the business?

The only other thing I will add in defence of the Dominion’s digital edition is that the “digital revolution” happened in the media industry over twenty years ago. It is us, the news consumers, who are coming late for the party and the advertisers are arriving later still.

But don’t expect the advertisers in full force until we, the consumers, have all settled in and made ourselves comfortable.