Sink or Swim: Digital Publishers Need to Be Bold | Wired.com (comments)
FT's Rob Grimshaw says (defending the FT's paywall): "Many news publishers are now facing up to the reality that online advertising isn’t replacing revenues lost from print. Newspaper Association of America figures show annual print ad revenues for the industry have dropped from $47 billion at their last peak in 2006 to $21 billion today, a loss of $26 billion. During the same period, news publishers’ digital ad revenues have risen by $1 billion from $2.2 billion to $3.2 billion. The prospects for winning back those lost ad dollars look dim. Nearly half of all online spend now goes to search advertising (49 percent – IAB US / PwC H1 2011) and in the display market there is intense competition from portals, networks and social media. Facebook’s pageviews are now 1,000 times greater than the biggest news publisher sites and its display ad revenues are likely to exceed those of all U.S. newspapers combined in 2013. Google’s will too, and that’s excluding their search revenues..."
Comment: I think this is just because those ad spends were always '50% wasted' - the advertisers just didn't know which was which. In other words, these revenues were always artificially inflated by lack of competition or alternative ways to gather enough eyeballs.
The web has just made the obvious more visible; brutal but inevitable. Also, in my view, the FT may have a good case for charging people, but in general the added values is what it comes down to - and many publishers and their publications don't really have enough to offer in that respect - same problem that is facing the record labels.