MEDIA: BEHIND THE HYPE - Broadsheets lead the move to digital newspapers

Interactive ad deals will give publishers another revenue stream.

The days when a newspaper was only something printed on paper that dropped through your letterbox are long gone.

In a world of dwindling reader loyalty, where circulation is everything, the cut-throat battle to boost sales has forced papers to embrace the internet boom, to the extent that the majority now have their pages on the worldwide web.

But The Guardian, The Observer The Daily Telegraph and The Times are raising the stakes even further by launching digital editions - an idea that was roundly laughed at several years ago.

The Guardian's innovative offering, which went live through a public beta test in November, promises to "combine web-based delivery with the look and feel of printed newspapers".

Each edition represents an exact replica of the printed version by using graphic images that allow the reader to seamlessly flick through each page in that day's paper.

At a proposed cost of £99 a year or £10 a month, with The Guardian reserving the right to change the price when it suits, it will form an important revenue stream for publishers.

Simon Waldman, the director of digital publishing at The Guardian, claims the downloadable digital version has already been well received by several thousand trial subscribers, who have been enlisted to help the paper to iron out the creases before the official launch.

"We sensed there was a need to combine what is available on the web with a print-based format," Waldman says. "A digital edition is part of the evolution in the relationship between the paper publishing industry and the internet. Also, a lot of what happens in a newspaper is to do with the layout, design and story ordering, which traditionally gets lost on the web."

A substantial proportion of the revenue from the digital offering will be generated through advertising, although Waldman admits this base is relatively small at the moment. But with future opportunities to offer interactivity, including links to advertisers' websites, he has no doubts The Guardian is laying the foundations for a broad revenue base.

For media agencies, the digital paper could herald the arrival of more complex deals, but press directors remain sceptical about its possible effects.

Clare Seagar, an associate director at MediaCom, says: "Newspapers are often accused of being slow to react, so it's great to see them doing this. However, I don't think that there will be a huge impact immediately, partly because the on-screen experience can never be made the same as reading a paper because of the physical nature of it."

One glitch that has yet to be resolved is whether or not such electronic publications will qualify for the Audit Bureau of Circulations figures.

The jury is still out on whether the ABC will bow to pressure from the media industry to agree to include electronic journals in future ABC certificates.

Such publications will not be incorporated in headline ABC figures until more research has been completed.

But Waldman claims the first objective is to help The Guardian's user base to be happy with the product.

As people adapt to obtaining more and more information from the internet, these editions may fill a useful void. However, it is hard to see how digital newspapers, with their identical content to the traditional printed dailies, will provide a long-term solution to the deep-rooted problem of declining newspaper circulations.

There also remains the issue of expecting people to change both their reading and purchasing habits if digital newspapers are to succeed.