It would be wise not to read too much into those McKinsey numbers, however: virtually all of the available evidence shows media consumption in print continues to decline, particularly with younger audiences, and as a result advertising revenue is disappearing as well. Media companies need to adapt to that fact, rather than trying to pretend it isn’t happening.

According to a post by Rick Edmonds at the Poynter Institute, the research came from a presentation by McKinsey principal Michael Lamb at a recent conference of the International News Media Association in New York. Lamb said that based on data from a number of sources, about 35 percent of the time consumers spend on news consumption is devoted to newspapers and magazines, while TV accounts for about 41 percent and smartphones and tablets account for only about 2 percent.

In other words, the research seems to show that while digital devices account for more than half of the total time that consumers spend with media in general — and about 10 times more than the amount of time they spend with newspapers and magazines — the amount of time they spend with “legacy” platforms expands dramatically when looking specifically at news consumption.

Time spent is not the only important metric

Although Edmonds notes that there isn’t much research out there to confirm McKinsey’s conclusions (apart from a Nieman Journalism Lab post in 2009 that saw Martin Langeveld try to dig into some readership numbers for newspapers), he says that other researchers he contacted thought that the numbers were probably “not far off” — in part because of the “lean back” form of consumption that print media involves, where users often spend hours with a cup of coffee and a paper.

Edmonds also argues that encouraging advertisers to look at these kinds of time-spent numbers might help newspapers and magazines improve their appeal, since time spent is a big factor in where advertisers spend their money. As he puts it:

“The time-spent metric suggests that there is more life in legacy formats than raw audience numbers and falling print ad revenues would imply. Since the ‘dying industry’ meme is part of print’s problem with advertisers, this could be incorporated in a case for the medium’s continued relevance.”

Unfortunately for publishers who might see this as reason for unbridled optimism, however, Edmonds goes on to note that the time-spent numbers “do not solve the basic advertising problem of vanished monopoly pricing power and strong competition from a wide range of targeted digital marketing options,” and that while users may spend less time overall with digital platforms when consuming the news, these shorter digital sessions “may be a more efficient way of consuming news.”

For most, the news occurs elsewhere

I think Edmonds puts his finger on one major problem: namely, the fact that for many news consumers, the “lean back” experience simply isn’t necessary any more. As research from the Pew Center has shown, large numbers of consumers are getting their news from aggregators such as Google News or Yahoo News — or possibly from newer solutions such as Prismatic and Circa and Flipboard — because they don’t have either the time or the inclination to go to a single newspaper source, or read in print. Is a lack of efficiency really a selling point for legacy print publications?

That’s not to say the “lean back” experience doesn’t still have value for many news and media consumers, but the other painful fact is that most advertisers aren’t specifically looking to advertise to news consumers — they want specific demographic segments or topic-specific shoppers, or other kinds of targeting that legacy publishers can’t offer, and they want engagement or “time spent” across a range of content types, not just news.

As Morgan Stanley analyst Mary Meeker has repeatedly suggested in presentations about the evolution of the digital-media marketplace, advertisers are moving to where the puck is going to be — not where it is now. And according to virtually all of the available evidence, even from McKinsey itself, that means mobile and social and other platforms, not print. Publishers can either try to convince advertisers that they are wrong about this move, or they can try to adapt to it.

Post and thumbnail photos courtesy of Flickr user Arvind Grover

Update: The Business Insider founder said on Twitter that the site turned a small profit in the first quarter, although he wouldn’t say how much.

@mathewi Don't have exact numbers yet (quarter just ended). More than we made in 2010 ($2k). Not enough to pay us like TV talent (sadly)

—
Henry Blodget (@hblodget) April 01, 2013

Much of what Blodget says about his business to the New Yorker also appeared in the slide presentation he published as part of his experiment in “opening the kimono,” as he described it. The site has about 24 million unique monthly visitors, according to Google Analytics, which puts it ahead of traditional outlets like the Financial Times and BusinessWeek — although comScore says it only has 9 million (Blodget says the discrepancy stems from BI’s large non-U.S. audience).

On Twitter, Blodget called the $3 million worth of red ink that Business Insider racked up in 2012 an “investment” rather than a loss. According to the New Yorker piece, the site has only spent about half of the $13 million it has raised in financing, which came from investors like Kevin Ryan (Business Insider’s chairman and co-founder of the Gilt Groupe) as well as IVP and Marc Andreessen. Ryan tells Auletta that for $7 million “we’ve created the new Wall Street Journal.”

Although Blodget mentioned in his recent presentation that programmatic ad buying and other forces are putting increasing pressure on advertising returns for publishers, the New Yorker piece says about 85 percent of Business Insider’s revenue still comes from ads, with the rest coming from conferences and its proprietary research arm. The site has also been experimenting with various forms of “sponsored content,” including sponsor-focused slideshows.

Not "lost!" Invested! And, yes, about to fill out AARP card RT @emilybell @pkafka... BI lost $3m last yr, HB is 47. allthingsd.com/20130331/henry…

—
Henry Blodget (@hblodget) April 01, 2013

Blodget describes the site’s approach — which focuses primarily on short, newsy pieces that often feature salacious details about and/or slideshows of celebrities — as being “halfway between broadcast and print,” and tells Auletta that it is designed to be “conversational.” He also argues that the model of aggregating content from other sites is sharing rather than stealing, although others have disagreed about that interpretation rather strongly.

And what does the future hold for Business Insider? An unidentified board member tells Auletta that he expects the site to be acquired, and Blodget says it “either will become part of a larger enterprise or become the larger enterprise.”

Bonus fact: Blodget, who played tennis while at the upscale Phillips Exeter Academy, plays doubles with his father — a successful banker — and the two were recently ranked nationally in the Super-Senior Father/Son Tournament.

Post and thumbnail image courtesy of Flickr user TechCrunch

According to the country’s Entertainment Retailers Association, digital sales reached £1.033 billion, making up more than a quarter of the cross-format total – five percent more than a year ago.

But the association’s headline announcement of digital growth masks what is, in fact, a worrying pattern. Across the formats, UK entertainment retailers shed 12 percent in sales last year, as revenue from music, video and games each dipped.

That means the industry is caught in the classic industry conundrum of swapping analogue dollars for digital pennies.

The ERA reckons (via release):

“Contributory factors included the decision by many music, video and games suppliers not to release key titles during the summer in order to avoid the Olympics, the fact the videogames business is in the lowest point of its format cycle and what is regarded by many as a lacklustre year for releases.”

ERA director Kim Bayley rationale (via release) calls for better content to help troubled retailers like HMV:

“The dearth of attractive releases during summer 2012 was clearly a significant factor. Suppliers need to do more to rebalance their release schedules and improve the quality of their releases. No retailer can afford to pay overheads on a store for 52 weeks of the year if all the key releases are going to be concentrated in the last quarter. And entrepreneurs will think twice about investing in new digital services if releases fail to excite the public. Luckily the message appears to be getting through and we look forward to being able to offer the public a much better release slate in 2013.”

Although gaming is the most lucrative UK digital entertainment sales segment, it grew by half the pace of music and video, which, spurred by new on-demand services, overtook games to become the highest-value segment across digital and physical.

The ERA end-of-year data, comprising Official Charts Company music sales and IHS Screen Digest estimates for video and games, do not include sales of unlimited-access streaming entertainment subscriptions like those offered by Spotify and Netflix.

Separately, the British Phonographic Industry (BPI) said UK singles sales continued to break records in 2012 thanks to digital downloads, which grew by six percent (by volume but not by revenue) to 188.6 million during the year.

“The final week of 2012 proved to be the year’s record week for digital sales as consumers redeemed their Christmas music vouchers and downloaded more than 1.3m albums and 5.6m singles,” said BPI CEO Geoff Taylor (via release)…

Now there is also a gloomy outlook for portable audio players, with consumer retail research outfit Mintel (via Telegraph) seeing MP3 players shedding 22 percent in 2012 UK sales revenue.

The common thread — consumers are now replacing these dedicated single-function devices with multi-function smartphones or tablets at an accelerating rate.

What once was, itself, a mono-functional device for making calls has become a Swiss Army knife for communication, entertainment and more. In fact, as Telegraph Media Group executive editor Edward Roussel comments:

Mobile phones: The term is anachronistic. They are the "remote controls" of our lives. on.wsj.com/Vr2JfT via @WSJ—
  (@edwardroussel) December 27, 2012

Mintel forecasts MP3 player sales halving again to £177 million by 2017. But it also sees a “worst-case” scenario of their revenue diminishing to just £25 million — that is £356 million less than Mintel’s 2012 sales estimate.

If it’s any consolation, this pace of decline — at least, for now — is less than that predicted by IHS iSuppli for ereaders.

A quarter of consumers polled by Mintel said they will buy a smartphone instead of a portable media player in future.

Ofcom’s recent annual International Communications Market Research report shows how smartphones are the handheld devices most commonly used to access the internet…

This year, we saw the emergence of a mobile-first digital ecosystem, with many services beginning to report greater consumption on mobile than desktop devices. But Ofcom’s data shows computers are still the device on which people most frequently use the internet…

We have recognized that fact for some years now — but France’s lead is getting greater and greater. Now over a quarter of French homes’ primary TV sets receives an IPTV service, according to IDATE and other data crunched by U.K. communications regulator Ofcom’s International Communications Market Report 2012.

That compares with a measly five percent in the U.S. and below one percent in the U.K.

Why is France forging ahead? The relative slow adoption elsewhere is “due in part to the challenges of gaining a foothold in the face of a range of well-established competing digital platforms,” Ofcom said.

That is, many countries beside France already have strong broadcasting ecosystems with major pay-TV operators offering a multitude of content. In France, pay-TV only began over digital networks, which support wider choice, in 2005. But most French ADSL providers offer digital TV through internet-enabled set-top boxes.

Non-Francophones should not fret, however. The French may have more IPTV-enabled main sets — but that doesn’t mean they use internet video more than the rest of us.

According to Ofcom research, only 13 percent of French consumers use the internet to watch TV on a weekly basis. That’s less than 17 percent in the U.S. and almost half as many as do so in the world-beating U.K.

Says Ofcom: “This is probably driven by the popularity in the U.K. of internet TV catch-up services from the free-to-air broadcasters, such as BBC iPlayer, 4oD and ITV Player.”

The gap between France’s leading IPTV penetration and the U.K.’s leading internet TV viewing habit is explained by the relative higher attractiveness of actual internet broadcast content, and because many British viewers are using the web, not TV, to watch internet TV.

As adoption of internet-connected TVs grows, much of that consumption is likely to move from the desktop to the big screen. But whether actual French consumption of internet video grows in lock-step remains to be seen…

In fact, more connected Italians already say they get their national news from online ahead of TV, says UK communications regulator Ofcom’s just-published International Communications Market Report..

The internet also now leads for international news consumption in both Italy and Japan. But, for some, it is local news at which the internet seemingly excels — that is how most internet users in Germany, Italy and Spain get their local info.

It is when you break down “news” in to sub-categories that you see how far the internet has come as a news medium, becoming the main source of sports news and celeb gossip in several countries…

Although the consumer research polled internet users rather than populations in general, in many of the countries the connected population is nearing high enough to represent the same thing.

In the US, a Pew nationwide phone poll revealed the same emerging pattern of the internet closing the gap on TV for national news consumption.

But that is indeed the case, according to annual research conducted for UK communications regulator Ofcom…

Although at least half of those polled in eight other countries said they never pay for content, that was just 16 percent in China, where more than half of internet users sometimes or regularly do so.

These are much desired numbers for online operators who find it hard to get consumers to cough up. So what’s going on here?

Back in the summer I questioned a different research exercise for finding unexpectedly high numbers of people who planned to watch the Olympics online. The finding did not tally with what we know about internet adoption that, whilst booming among urbanites, is growing more slowly elsewhere.

Like that research, Ofcom’s naturally skews toward young, urban and more affluent consumers — as opposed to the much poorer citizens in more rural areas — because this is where China still sits on its internet adoption curve.

In the same way, note how — surprisingly — a far higher percentage of people in China than elsewhere (around three quarters) say the internet is their main source of national news… Whilst internet adoption has reached mass-participation levels in many western countries, it simply isn’t true to say that three quarters of Chinese are online…

That is not necessarily a bad thing, depending on who you are — this early adopter herd is at least a ring-fenced segment of attractive demographics for any internet services looking for customers.

Amongst the most successful so far is Tencent, the diversified giant that ranks #9 on our paidContent 50 list of the world’s highest revenue-earning digital content companies and which this summer told us over 30 million of its then 752 million members were paying 10RMB  ($1.60) per month.

In time, as China’s internet demographic begins to more closely resemble its nation’s — by way of low-cost handsets, for example — I would expect this curiously high proclivity to pay to wane. And content operators may be forced to accept lower fees than they do in other parts of the world.

The Oliver & Ohlbaum media strategy agency shows how 10.3 percent of surveyed pay TV subscribers in the UK plan to change their service over the next year…

That is twice as many people who said they would change in 2013 — and also more than the proportion of people who actually did so.

Where will they go? Whilst it might be tempting to look for evidence of widespread “cord cutting”, that is not what we see here…

Instead, most of those who plan to change say they will simply remove paid channels from their existing package. Channel additions by consumers look set to shrink markedly next year. And the numbers who plan to switch down to Freeview terrestrial TV are rising.

In all, this likely points to a consumer response to worsening economic times, with disposable income relative to many consumer goods shrinking, rather than the effect of new internet TV services.

The proportion of consumers who plan to switch from pay TV to on-demand services is up from last year, but only by one percent.

A minority, 16 percent, of those surveyed said they were likely to buy a box for YouView — the UK hybrid terrestrial and internet TV joint venture — in the next year.

But don’t rule out internet TV growth. Amongst those who do subscribe to internet video services, behaviour change is profound. Forty-five percent of Netflix UK and Lovefilm Instant subscribers say they have reduced their pay-TV subscriptions, though many of them are actually watching more linear TV…

Oliver & Ohlbaum’s survey found 33 percent of households already have a connected TV device other than that from a pay TV provider. Samsung’s models top the list of connected TV models that most frequently are actually connected.

The experiment’s techniques actually point to a future where researchers are spared the grunt work of poring through thousands of pages of news or watching hundreds of hours of programming, and can actually focus their energy of explaining. As the researchers note in their paper, the real ramifications of this research lie more in what it accomplished than in what it found.

Namely, they demonstrated that with new big data techniques such as machine learning and natural-language processing, it’s possible to accurately analyze millions of pieces of content spanning almost a year without requiring humans to read and score it all. Choosing hypotheses with predictable results meant it was easier to verify their accuracy.

Here’s how how they explain the promise of their work and some potential use cases, the latter of which they go into far more detail about in the paper:

“[I]t allows researchers to focus their attention on a scale far beyond the sample sizes of traditional forms of content analysis. Rather than spending precious labour on the coding phase of raw data, analysts could focus on designing experiments and comparisons to test their hypotheses, leaving to computers the task of finding all articles of a given topic, measuring various features of their content such as their readability, use of certain forms of language, sources etc. (just a few of the tasks that can now be automated).

… Our approach — apart from freeing scholars from more mundane tasks — allows researchers to turn their attention to higher level properties of global news content, and to begin to explore the features of what has become a vast, multi-dimensional communications system.”

Put more simply: This research underscores the common big data maxim that knowing the right questions to ask is now the biggest challenge in gleaning insights from data. It’s increasingly easy to get data, analyze it and visualize it, so humans really just need to hypothesize and be able to explain the results. (This also seems like a good place to plug ScraperWiki as a great source for gathering potential research data from websites.)

Creating the workflows for gathering and analyzing the data as the authors suggest still isn’t child’s play (it might take some assistance from the computer science department), but it’s a lot better than the alternative.

Feature image courtesy of Shutterstock user Ruggiero Scardigno.

That plan would, for example, harmonise the currently fractured entertainment licensing regimes to ensure online services can offer music, TV and more across national borders.

But do Europeans really want to get digital content from other member states? Research conducted for the EC and released this week is instructive for services thinking of benefitting from the single market, showing:

• Nineteen percent of Europeans are interested in receiving content from another EU country.
• That is only two percent more than the 17 percent of consumers who already do so, primarily by TV.
• Only three percent of citizens polled by TNS Opinion & Social said they were interested in receiving VOD from across European borders.

These figures do not suggest massive pent-up cross-border demand for online content services that want to upturn traditional licensing structures and smash through national boundaries. But, as is often the case, perhaps potential consumers don’t know what they really want until it is truly on offer.

Photo: Shutterstock / Silver Tiger

The prospect of a single market is nevertheless great news for Europe’s content production powerhouses. The UK is the country from which most interested citizens (42 percent) want foreign content, followed by Germany and France.

And, of those who are interested in getting content from outside their home nation, 31 percent say they are prepared to pay for it — 14 percent by subscription and 17 percent by pay-per-view or per-listen.

But the numbers of Europeans who want to consume content from elsewhere in Europe is broadly similar to the proportion who want it from outside Europe, too. Sixteen percent said they wanted to do so (12 percent for TV programmes, three percent for VOD and one percent for other), with U.S. content by far the most desirable.

And people are more prepared to pay for this non-EU content than for that from elsewhere in Europe – 19 percent via subscription, 21 percent via pay-per-view or per-listen.

The biggest reason for the findings is linguistic. Citizens may not desire TV shows or music from neighbouring countries since they are in different languages, but many are attracted to English-language content.

One positive outlook is that younger, more up-market consumers are more inclined to want cross-border content.