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January 06 2011

19:00

Dallas Morning News publisher on paywall plans: “This is a big risk”

In talking about the Dallas Morning News’ plans to begin charging for digital content next month, Jim Moroney is surprisingly candid about the decision and the economics of the industry. When the publisher of the News told his staff about the decision, he said they must be prepared to be ridiculed and vilified for putting their content behind a paywall.

“This is a big risk — I’m not confident we’re going to succeed,” Moroney told me. “But we’ve got to try something. We’ve got to try different things.”

Beginning February 15, the News will beginning charging for a majority of its content across its soon-to-be-redesigned website, its iPhone app, and a forthcoming iPad app. Print subscribers will get full access to everything for $33.95 a month, while those who eschew the paper can buy a subscription to the website and apps for $16.95. What’s unclear at the moment is how exactly the digital subscription will work given that Apple’s app store doesn’t allow for subscriptions (at least not yet, but that could be changing soon).

The move is not entirely a surprise given that other large metro papers, The New York Times and the Boston Globe, are developing paywalls. It’s also less of a surprise since A.H. Belo, parent company of the News, said in 2009 that it was considering switching some of its papers to paid sites. (A plan for the Providence Journal to go all-pay appears to have been changed or pushed back.)

What will readers have to pay for? Dallasnews.com exclusive reporting, for one thing, including its scoops on the biggest show around, Dallas Cowboys football. Free stuff will include breaking news, wire stories, obits, and blogs (which, curiously, could include sports coverage of the Cowboys).

Moroney is pragmatic about the paper going to a paid model. “It’s not an over-the-cliff strategy,” he said. “If this works, great, it’ll be fantastic. If it doesn’t, we can go back to providing access at a lower price or free.”

It’s an experimental approach that marks a shifted attitude toward paid content. In 2009, Moroney was one of several newspaper executives to testify at a Senate hearing on the future of newspapers. As he put it at the time, “If The Dallas Morning News today put up a paywall over its content, people would go to The Fort Worth Star-Telegram.”

Now, though, as he sees it, the News and other papers have no choice but to change. “I don’t see impression-based advertising, the thing that paid bills for newspapers for so long, as supportable in the long run for a newspaper,” he said in our phone conversation. Moroney said he expects that pageviews will drop by half once the paywall is up, which is no small consideration given that the News has roughly 40 million pageviews a month. But even with growing pageviews and modest gains in online ad revenue in the industry, CPM prices are still low and ad inventory is up, Moroney said. And as he told Ken Doctor in a Newsonomics post last August, the days of newspapers living off the old “80/20″ rule are long gone.

Over the last few years, the News has reined in its circulation from far-flung areas (sorry, readers in Arkansas and Oklahoma), cut back third party copy sales, and increased its home delivery price, all with the idea of turning the Dallas Morning News (in all of its forms) into a product that makes money off specific, targeted audiences — rather than one that makes money on volume, Moroney said.

What the paper hopes will make the difference is a tiered system of access, from individual apps to the digital-only bundle and the full-blown subscription. In debuting an iPad app, it made sense to make all the paper’s digital offerings paid, Moroney said — otherwise, why would someone pay for an app when they can access DallasNews.com on a smartphone or tablet’s web browser? That becomes especially true as more publishers build HTML5 sites that can offer an engaging app-esque experience. “You have a website you can access with a browser that has the same look and feel of an app. How can you expect people to pay for one,” he noted, and not the other?

In its research to prepare for the site, the News found that there was willingness to pay for access to the site or various apps. While, because of the relative newness of the iPad, Moroney said he takes the data with a grain of salt, it was still positive enough to encourage the paper to create a paid strategy for its digital products.

“I don’t think we can wait,” Moroney said. “The business has enough uncertainty around it.”

September 14 2010

04:01

Five important mobile app findings for news orgs

A new report out today gives news organizations reasons to start thinking mobile apps (if they haven’t already). The Pew Internet and American Life Project partnered with Nielsen to survey cellphone users on their app habits, finding that about 43 percent of cellphone users have an app on their device, though only about 24 percent actually use them. With smartphone market share expected to accelerate its rapid growth, app usage is also sure to increase. Here are five data points from the Pew-Nielsen report that stood out to me as noteworthy for news organizations:

Young people like apps

Struggling to get those young consumers? They’re the single most app-friendly bunch. About 47 percent of 18- to 29-year-olds said they’ve downloaded an app, compared to 39 percent of 20- to 49-year-olds and just 14 percent of 50-plus. That’s important, particularly when paired with a previous Pew finding that showed that young people have taken to giving mobile donations. That’s a good mix for nonprofit news organizations. (Though even with Apple’s newly explained rules, in-app donations aren’t allowed on the iPhone.)

People who use apps consume news online

Apps could be a good way to hang onto your audience, letting them follow you onto another platform. The report surveyed app users about their online activities, revealing that they are more likely to be online news consumers than are non-app users: 90 percent of app users consume news online, compared to 75 percent of non-app users. Also, they are more likely to visit a video sharing site, 80 percent versus 66 percent.

News apps do relatively well

Sure, puzzles (36 percent), Facebook (42 percent), and Google Maps (35 percent) are wildly popular with app users, but look down the list and it’s clear that news isn’t insignificant. Asked which apps they used in the last month, 9 percent of users said CNN, 8 percent USA Today, 7 percent New York Times, and 7 percent Fox. Other local apps for food and entertainment pull in similar percentages, perhaps a good indicator for local news organizations.

People digest apps in small doses

The study found that most users who use their apps daily do so for less than 30 minutes. Asked for context, 71 percent said they use their apps when they’re alone, 53 percent while waiting for someone or something, and 36 percent while commuting. It seems like people want a few moments here and there with their apps, an environment where a good headline or a snappy lede is particularly important.

People will pay

Of all the apps downloaded in a typical month, more were paid than free. That’s good news, though the largest category, 28 percent of all downloads, was still only in the $1-$1.99 category. Another 17 percent of all downloads were in the $2-$2.99 range, 17 percent in the $3-$4.99 range, and 23 percent were $5 or more. Though small amounts, they’re still more than zero — the amount many have proven willing to pay for content on the web.

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