Newspapers have blamed Google (NSDQ: GOOG) for their woes, and Google, in turn, has helped remind newspapers that they did a pretty good job of digging their own grave. The latest Googler to weigh in on the business is Chief Economist Hal Varian, in a speech to the FTC today. Below, the big takeaways from Varian’s remarks, which are drawn from a longer post, plus slideshow, on Google’s Public Policy Blog. Spoiler alert: If you had hopes for a print rebound, stop reading now.
– People spend more time brushing their teeth than reading news online: “The average amount of time looking at online news is about 70 seconds a day, while the average amount of time spent reading the physical newspaper is about 25 minutes a day. Not surprisingly, advertisers are willing to pay more for their share of readers’ attention during that 25 minutes of offline reading than during the 70 seconds of online reading. So even though online advertising has grown rapidly in the last five years, it appears that somewhat less than 5% of newspapers’ ad revenue comes from their internet editions, according to the most recent Newspaper Association of America data.”
– ‘Special’ sections aren’t special any more: “Traditionally, the ad revenue from … special sections [like automotive, travel etc.] has been used to cross-subsidize the core news production. Nowadays internet users go directly to websites like Edmunds, Orbitz, Epicurious, and Amazon (NSDQ: AMZN) to look for products and services in specialized areas.”
– One consolation: “There are huge cost savings associated with online news. Roughly 50% of the cost of producing a physical newspaper is in printing and distribution, with only about 15% of total costs being editorial. Newspapers could save a lot of money if the primary access to news was via the internet.”
Varian’s ten-step plan to turn things around: “Experiment, experiment, experiment.”