CHICAGO, June 13, 2011 /PRNewswire/ -- Today, Zacks Equity Research discusses the Publishing industry, including: News Corporation (Nasdaq: NWSA), Apple Inc. (Nasdaq: AAPL), Google Inc. (Nasdaq: GOOG), Microsoft Corporation (Nasdaq: MSFT) and Yahoo Inc. (Nasdaq: YHOO).
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A synopsis of today's Industry Outlook is presented below. The full article can be read at http://www.zacks.com/stock/news/54935/Publishing+Stock+Outlook+-+June+2011
Newspaper companies are transforming their business models to better position themselves in a multi-platform media universe. Although the U.S. economy is witnessing signs of recovery with a sluggish improvement in the advertising environment, we believe 2011 will not mark the resurrection of the publishing industry. However, it is expected to fare better than 2010.
With steadying newspaper budgets, we could see fewer layoffs, more focus on web and local content, reduction in print pages dedicated to business or sports content, increase in subscription and concentration on profitable circulation.
News Corporation (Nasdaq: NWSA) has taken a leap towards an online subscription-based model for general news content. News International, a subsidiary of News Corporation, began charging readers for online content for The Times of London and Sunday Times of London effective June 2010.
Rupert Murdoch, the Chief Executive Officer of News Corporation, has long been pushing for the online subscription model for all general news websites. But newspaper companies have been reluctant to toe the line for fear of losing readership and, in turn, advertisers.
Business newspapers, such as The Financial Times and The Wall Street Journal (owned by News Corporation) have long been following an online pay model. But levying access charges on readers for online access to general news content is a first for any news publication.
Another media giant, The New York Times Company, has already taken a leap towards the paid model. During the third-quarter of 2010, the company's New England Media Group property, the Worcester Telegram & Gazette, launched a subscription-based model for its website.
The New York Times Company on March 28, 2011 launched a pricing system similar to that of the Financial Times' metered system, whereby after browsing a certain number of free articles, readers will be asked to subscribe to enjoy full access to its articles on phones, tablet computers and the Internet.
The New York Times Company has fixed monthly charges of $15 for access to more than 20 articles on its website and a smartphone application, $20 for unlimited access online and on Apple Inc.'s (Nasdaq: AAPL) iPad tablet computer application, and $35 for online, smartphone and iPad application.
The company also indicated that the users of NYTimes.com will be able to read 20 articles per month without spending a penny. However, readers visiting The New York Times Company's website via blog links or social-media sites such as Facebook or Twitter will be able to access unlimited number of articles.
But traffic reaching the company's website through search engines such as Google Inc. (Nasdaq: GOOG), Microsoft Corporation's (Nasdaq: MSFT) Bing and Yahoo Inc. (Nasdaq: YHOO) will be able to view five articles per day before being asked for a subscription.
We believe the success of the pay model depends on the accessibility of new articles across the Web. People will be reluctant to shell out for content that is available free of cost elsewhere. However, The New York Times Company notified that within the three weeks of launch the number of paid digital subscribers reached 100,000, but did not provide any outlook as to conversion and retention rates.
Way back in 2005, The New York Times Company had attempted to charge readers for online access to its columnists on a platform known as TimesSelect, but rescinded it after two years as it failed to generate enough revenue.
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