Analyst: Newspapers’ Loss Could Be Online’s Gain

by Gavin O’Malley,

Despite the “really dire shape” of the global economy, online media and marketers have good reason to be optimistic about the future — “except the newspaper industry,” according to Imran Khan, J.P. Morgan managing director and Web analyst.   

“Advertisers realized that the newspaper model was flawed,” Khan said during a presentation organized by lead-generation company Pontiflex on Thursday. “They didn’t change their business model to adapt to the new reality.”

That new reality, Khan explained, is made up of several trends all working against the newspaper business, from dramatic audience fragmentation to consumers relying less and less on print resources for breaking news.

Yet, according to Khan, newspapers’ loss is potentially the industry’s gain. “It’s a $40 billion ad market, and that should move somewhere,” he said.

Giving Web professionals still more hope, Khan noted that broadband penetration and e-commerce continues to increase, and grab market-share both domestically and abroad.

Indeed, in the U.S., ecommerce represented a mere 3.9% of all commerce last year — a percentage that will continue to grow, and, notably, give an added boost to online advertising along the way.

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