With the telecom landscape in constant flux, carriers continue to find unique ways to add to their bottom lines. While the Kindle, Amazon’s wireless reading device , has been touted as a savior for the newspaper industry, it also represents the first example of the long-predicted ad hoc subscription model for Sprint, which provides the wireless access for Kindle as subsidized by Amazon. Sales of the Kindle drove a majority of Sprint’s 394,000 wholesale additions in Q1.

But because Kindle is included in Sprint’s overall subscriber numbers, the carrier will see pressure on its average revenue per user (ARPU) numbers going forward if ad hoc subscriptions become a significant business. We estimate that Kindle may only represent $2 ARPU compared to approximately $56 for a postpaid Sprint subscriber, however.

Another alternative model is the state-sponsored Lifeline Services available through TracFone. These Lifeline Services enable low-income Americans to receive free wireless service with 40 to 80 minutes of use per month, depending on their state of residence, and this model is rapidly becoming a source of growth for TracFone.

The increase in prepaid subscriber share in Q1 is a trend we see continuing well into the second quarter. With the average consumer more concerned with budgets and bottom lines, it only follows that the disruptive unlimited players will continue gaining ground against the traditional carriers across many US markets.

Read additional Telecom insights in Nielsen’s U.S. Telecom Quarterly.

Visit Editor & Publisher for the full list of the top 30 news sites and online newspaper sites.

Hi! I’m Chuck Schilling, Research Director for Agency & Media Analytics, and one of the more recent additions to the Nielsen Online team. For my first of many blog posts, I’m going to focus on what I know best – print media brands. My career path has taken me through the offices of most major print publishers – both as an employee and consultant – so I can say with a certain level of confidence that the economic pressures felt by these once-reliable ad revenue generators are unprecedented.

Back in 1995, there was a bit of an uproar when a major magazine publisher dared raise its ad rates while cutting circulation, boldly attempting to pass on its growing cost structure (increased paper, postal, printing, distribution, renewal costs) to advertisers. This happened at a time when consumer publications were shifting their traditional revenue model from equal shares circulation and advertising revenue to one dominated by advertising. This was also about the same time that a content-starved Internet was emerging as a consumer medium, and dial-up online service providers such as Compuserve and AOL actually paid media companies for the privilege to carry their high-quality content.

Fast forward 13 years and the tables have turned, with print media companies left holding the bag. Why? Well, some of it was their own doing. During the last decade or so, many print companies engaged in subscription practices that grew their rate bases to artificially inflated levels (higher rate bases mean higher rates can be charged for an ad), while simultaneously liberally discounting their higher published ad rates. As a result, much of the industry’s perceived vitality was in fact illusory. At the same time that the primary target audience was being diluted, costs – including those associated with building, updating and maintaining world-class media websites – were on the rise, all of which has led to serious consequences. Recently, we’ve seen drops in circulation, significant layoffs, the shuttering of the Christian Science Monitor’s print edition, the Chicago Tribune’s bankruptcy, and a possible rate base reduction for Newsweek from a circulation of 2.6 million to 1 million – and this is just the beginning according to many industry reports.

On the ad sales front, newspapers have been hit particularly hard. The Newspaper Association of America (NAA) recently reported that newspaper print ad revenues were down 16% for Q2 ‘08, continuing a two year decline. In at least one notable case, this trend has led to an ironic twist in their ad sales proposition. A couple of months ago, we noticed a NYTimes.com ad that offered a *free* print ad for advertisers that bought an *online* ad. True, this example is for a lowly job listing, but it shows how far print’s fortunes have changed in a short while. It was only a few years back when a significantly pricier print schedule tossed in an online schedule as added value.

All is not lost, but the future for those that survive won’t be easy. Besides the necessary game-changing restructuring that must be take place, newspaper and magazine print brands must maintain their high-quality editorial reputations, and convince audiences and advertisers they should pay more for a premium experience. Moreover, these companies have heard it over and over, but now they must take heed – the audience they counted on for ever-increasing circulation levels has changed behavior and flocked to the web as a primary, more timely news source. Overall, two-thirds (67.7%) of all adults who went online in the past 30 days read News online – and we’re not just talking people under 35 years old.

Source: Nielsen Online, @Plan

We here at Nielsen Online are looking to support our branded print (and other) media clients in a number of ways, including looking at ways to measure the importance of a trusted media environment both to a user’s feelings toward the editorial and advertising, as well as the positive associations that benefit advertisers as a result of living in that trusted environment.

More to come!

Despite a continued softening of the economy, several media showed healthy growth in advertising for the first half.  Advertising on Cable TV (+8.1%), Syndication TV (+7.2%), and National Sunday Supplements (+7.2%) saw the largest growth, according to Nielsen.  Spot Radio fared worst among the 19 media categories analyzed by Nielsen (-10.1%). 

Although overall Internet ad spending, when including paid search and online video advertising, was up by 11% during the first half of this year, image-based Internet advertising declined by 6% during the first half of 2008, compared to the same period in 2007.

Among specific product categories, Credit Card Services (+18.95%) and Direct Response Products (+20.48%) showed the strongest ad spending gains, while the Automotive (-.01%), Pharmaceutical (-4.76%), and Motion Picture (-4.64%) categories recorded the largest advertising declines.

The decrease in image-based Internet advertising was driven by a 27% drop in online ad spending by financial services companies, which decreased their spending from $1.5 billion in the first half of 2007 to $1.1 billion during the first two quarters of this year. 

Other industries — entertainment (+47%), automotive (+45%), and consumer goods (+32%) — showed strong increases in image-based online advertising during the first half of 2008.

View the full press release.

View Nielsen Online’s report on first half 2008 online ad spending.

Read coverage of Nielsen’s findings in Wired, Investment News, the Financial Times, Crain’s New York Business, TV Week, Broadcasting & Cable, MediaPost, The Hollywood Reporter, Adweek, and Mediaweek.