Online newspapers: the figures just don’t add up

Newspapers making the shift from once-a-day print publisher to 24-hour digital hub should take note: according to one editor, online operations are underestimating the costs and overestimating the revenues of the move to online.

Frederic Filloux, international division editor for the Norwegian Schibsted Group, reckons that the cost of running a “pure digital newsroom” are about £7.94m a year (EUR10m) – £4.76m for staff, £790,000 on technical infrastructure things, £1.59m for marketing and another £790,000 for admin.

And that’s based on cutting staff and getting rid of all those ineffecient print only sub-editors. As Filloux says:

“As a credible metric, we can take a big national European newspaper with an editorial staff of 400 to 500 people… We’ll assume many people are involved in print-related production such as sub-editing, graphics, layout etc. Plus we all now know those newspapers are not exactly hallmarks of productivity

“In short, I am certain we can produce quality general news coverage with one hundred dedicated full-time journalists.”

So how much money would this new age “newspaper” make to cover costs and make a profit? Filloux estimates that to cover the monthly costs of £659,000 (I’m converting from Euros, which have different purchasing power) you would need 8.3m unique users a month to break even.

Filloux warns that in America only big news brands like the New York Times (21m monthly uniques according to Nielsen) are close to making money online.

If the ABCe statistics are to be believed (the way its figures are compiled is different to Nielsen’s) the picture in the UK is somewhat more healthy: Guardian.co.uk has 23.11m monthly uniques, Telegraph.co.uk has 22.05m and Times Online has 19.6m. Even The Independent is inching closer to that 8m mark with 6.62m.

On the problem of how to fund news in a changed media landscape, Filloux makes a good point: it’s becoming harder and harder for publicly owned firms to fund original journalism, so why not go private.

“Even when news media groups are not in such dire state, they all realise the the label “media” (or worse “newspapers”) is stamped on their brand. As a result, they will be punished by the stock markets – that is quite an incentive to consider privatisation”