News International, a subsidiary of News Corporation ((NWSA - Free Report) ), which began charging readers for online content for The Times of London and Sunday Times of London, in early July 2010, witnessed a surge in the number of digital subscribers -- up approximately 60% during a four-month period, Bloomberg reports.
News International saw monthly digital subscribers rise from 50,000 on October 31, 2010 to 79,000 at the end of February 2011, who are accessing articles online, on Apple Inc.'s ((AAPL - Free Report) ) iPad and Amazon.com Inc.'s ((AMZN - Free Report) ) Kindle e-reader. Moreover, the company registered a 3% increase in the number of readers for The Times subscribing to both print and digital.
To curb shrinking print advertising revenue and seeking new revenue avenues, the publishing companies contemplated charging readers for online content. Newspaper companies have been remodeling and restructuring themselves to better align with the growing need of marketers, targeting younger people, affluent households and other demographic groups with multiple Web and print publications.
The publishing companies are adapting to the changing facet of the multiplatform media universe, which currently includes mobile, social media networks and reader application products.
According to data released by the Newspaper Association of America, print advertising newspaper revenue dropped 8.2% to $22.8 billion in 2010, whereas online ad revenue grew 10.9% to over $3 billion.
Recently, The New York Times Company ((NYT - Free Report) ), the publisher of The New York Times, the International Herald Tribune, The Boston Globe and 15 other dailies launched a pay-and-read model similar to that of Financial Times' metered system, whereby after browsing a certain number of free articles, readers will be asked to subscribe to enjoy access to all its articles on phones, tablet computers and the Internet. However, the company indicated that the users of NYTimes.com will be able to read 20 articles per month without spending a penny.
Currently, we have a long-term Neutral recommendation on the stock. News Corporation also holds a Zacks #3 Rank, which translates into a short-term Hold rating and correlates with our long-term recommendation.