Total Disaggregation: The 80/20 Rule of Online News

This is the final post in my series about the transition of print newspapers to online news. In print news, distribution costs led to scarcity, allowing publishers to create an audience and a marketplace for advertisers. Online distribution costs are nearly free, producing massive competition for audience engagement and a disaggregation of the newspaper business model. In addition to new competition for audience engagement from social networking and games, news publishers have to increasingly compete with themselves – the total disaggregation of the newspaper business model. This becomes clear when examining the articles read by an online-news audience.

Rather than purchase multiple newspapers, print news readers consume local, regional, national, and international news from one paper. In online news however, the reader has an abundance of choices for where to get their news, including thousands of websites, search tools and social media. The 80/20 rule proves the point.

Through examination of the reading habits of audiences in online news, Scout Analytics finds 70-80 percent of articles consumed are unique to the publisher. For example, the articles read on a publisher’s site serving a local audience are 70-80 percent about the local area. Less than 30 percent of the articles would be for regional, national, or international news even though syndicated content is available on the local news website. Instead of reading all the news from one site, news readers consume local news from local publishers, national news from national publishers, and international news from international publishers. The 80/20 rule of audience behavior creates new competition and niches many publisher into a smaller share of audience engagement.

Here is a summary of the series. Online news can be a profitable business model, but it is a smaller business model than the newspaper one. A newspaper publisher cannot stop the disruption caused by the Web, but a publisher can decide how to respond.

Links to post in the series: