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Online publishers exude optimism about the future



Online publishers exude optimism about the future


The mood among online publishers seems particularly positive at the moment. The major British Internet media companies, for example, are consistently optimistic about the future and continue to expect significant growth. According to the latest annual survey by the Association of Online Publishers (AOP), online publishers – including BSkyB, Guardian Media Group and Financial Times – expect digital sales to increase by 52 percent for the year.

Only nine percent growth is expected for the traditional business areas. Despite the poor expectations regarding the general economic situation, online publishers are hopeful. AOP Director Ruth Borwnlee believes the industry will be able to weather any slumps as consumer Internet trends continue. Online companies apparently see Internet giant Google as the greatest threat. With its dominant position in the online advertising market and the acquisition of the advertising network Doubleclick, Google poses a threat to business for 38 percent of those surveyed. The same number cited spending and the enforcement of government regulations as a threat to their company.

“The fear of the big online players like Google is quite justified when you consider their market capitalization. However, the ‘giants’ do not automatically have the competence for the corresponding content,” says Andreas Vlasic, Managing Director of the Media Institute Ludwigshafen. This was shown, for example, by Google’s failed attempt to build its own video platform. “Dominating competitors always create concern that they will suffocate the medium-sized and small companies in a sector and ultimately force them to capitulate,” agrees Volker Nickel, spokesman for the Central Association of the German Advertising Industry (ZAW). But there would also be limits. “Good business models have always been able to assert themselves against big names – such as some editorial online services that earn money with advertising revenue and at the same time achieve customer loyalty to their print title,” Nickel continues. He also points out that Internet advertising is given too much importance as a source of income. “The euphoria mistake was made – the internet was hyped up as the advertising medium of the future, the traditional media talked down.” Real developments are often lost sight of.

Despite Google’s supremacy and possible overestimation, the online media houses continue to show great trust in internet advertising as a financing model. 80 percent consider online advertising to be promising. “The extent to which viable business models can arise for online media depends not least on the market situation,” explains media expert Vlasic. In addition to advertising financing, there is also the possibility of offering paid content. However, these would then have to have a certain exclusivity. However, the general trend is currently moving away from this, as the AOP survey also shows. Many publishers have already given up their paid services or plan to do so. Today, 60 percent of the remaining fee-based offers already consist of archives or special reports. pte

www.ukaop.org.uk