Raymond Snoddy on media: Papers must heed web's death threat

Death has always been good news for newspapers; the more violent and tragic, the better. Even at the more modest end of the market, expected death is good business, too, thanks to obituaries, funeral announcements and paid-for tributes.

Now, not even death, with all its associated newspaper revenues, is safe from the internet. The founder of Monster.com, a classified job ad website that has cut a swathe through US newspaper revenues, has decided to move into the obituary business.

With his latest site, Tributes.com, Jeff Taylor will be taking on firms such as Legacy.com, which manages the online obituary sections of about 650 US newspapers.

The service intends to cut out the papers and source its information directly from funeral homes, trade associations or social security. Money will come from selling ads, flowers, cards and online memorials.

On its own, the service is unlikely to kill off any newspapers. However, it will certainly be another noticeable pinprick for the US industry, where ad revenues shrank by 14% in the first three months of this year alone, under the twin assaults of the credit crunch and the internet.

The effects can already be seen as publishers axe jobs to bring costs into line. Last week it was the turn of the Los Angeles Times, which announced that 250 jobs were going - 150 of them in editorial. The cuts will bring editorial numbers down to 700, compared with about 1200 as recently as six years ago; the number of pages may come down by as much as 15%. It is a pattern being seen throughout the US newspaper industry.

In a memo to staff, LA Times editor Russ Stanton summed up the key dilemma being faced by newspapers throughout the developed world. 'Thanks to the web, we have more readers than at any time in our history. But, also thanks to the internet, our advertisers have more choice, and we have less money,' he wrote.

The US situation begs the question whether the same kind of turmoil is likely to reap havoc with the UK industry.

Probably not quite. Speakers at a MediaTel seminar last week emphasised the differences between the British and US press markets and predicted that we are not about to face a US-style decline.

Dominic Carter, who has just been appointed trading director of News International, emphasised the continuing levels of investment and innovation in the UK industry, while Dominic Williams, director of press at media agency Carat, asked which other medium could reach 14m people a day.

However, another speaker, Alex de Groote, media analyst at stockbroker Panmure Gordon, expressed fears that advertising revenue would come under growing pressure from the web.

The hard figures show that ad expenditure is down from 拢2.25bn in 2000 to 拢1.93bn by the end of last year - a fall of 17%. Not quite up to US standards of catastrophe, but a loss of ad share from 14.7% to 10.5%.

The one big similarity between the Los Angeles Times and the British quality dailies is that both have millions of online readers but hardly any money earned as a result. According to MediaTel, as a result, the top newspapers may have generated only 拢15m-拢20m in ad revenue last year, with GroupM suggesting only one online newspaper was profitable.

It has turned into the biggest challenge the industry faces: how to turn web eyeballs into revenue.

The British papers must also be hoping that Tribute.com remains a phenomenon confined to the US.

- Raymond Snoddy is a media journalist and presenter of BBC Television's Newswatch

30 SECONDS ON ... OBITUARIES

- Legacy.com, founded in 1998, has ties with more than 650 newspapers in the US, Canada and UK and partners with 76 of the 100 biggest US papers. Partners in the UK include The Times.

- The site claims to host obituaries and memorials for more than 60% of the people who die in the US and attracts more than 10m visitors a month.

- Tributes.com, which is still in Beta, is competing squarely with Legacy.com. It enables users to verify deaths through its access to the US social security database of deaths since 1937, get more information about the deceased and any memorial events being held, and leave their own tributes and messages.

- John Thaddeus Delane, editor of The Times, popularised the extended newpaper obituary in the mid-1800s.

- Anthologies of obituaries from The Daily Telegraph have been published with the subjects chosen on themes such as rogues and eccentric lives.