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May 27 2011

18:00

Checking in with the Newport Daily News: Two years after a digital paywall, print is still king

Newport Daily News logo

The Newport (R.I.) Daily News might have been ahead of its time in offering the Frank Rich discount: The newspaper charges a hefty premium for digital-only access in hopes of boosting print subscriptions.

Two years have passed since the Daily News introduced a three-tiered paywall. At the time, executive editor Sheila Mullowney described the move not as a push toward digital, but as the opposite: a “print-newspaper-first strategy.”

That remains the case today.

“The print product is the thing really driving us at this point,” William Lucey, the Daily News’ publisher, told me. “As far the Internet goes, it really has not amounted to a hill of beans yet from a financial point of view.”

That sentiment is borne out in the Columbia Journalism School’s recent report on the business of digital journalism, which digs into the data:

The paper’s site, newportdailynews.com, gets around 80,000 visitors a month. Especially with online ad rates “dropping 20 percent a year,” that’s not enough to sustain the operation, which includes a newsroom of 22 people, Lucey says. Indeed, online ad revenue accounts for only 2 to 3 percent of total advertising for the paper.

After the change was put into effect, “our single-copy sales went up about 300 a day” — a bit less than 10 percent of overall single-copy sales. As the economy improves, “print is coming back. February [2011] was up 35 percent over last year” in ad sales.

As the Daily News has tweaked its price, it has preserved the print-first ethos. Earlier this year, the paper dropped its print+digital subscription price from $245 a year to $157 — a dollar more than the print-only price. A digital-only subscription, on the other hand, costs $345 a year.

The A.H. Belo-owned Providence Journal, the Daily News’ larger rival, has since announced its own paywall, expected to launch in the second half of 2011. Readers of that paper will have to pay for “original and proprietary content.”

It will be interesting to see whether the ProJo’s wall affects the Daily News. Last month I posed a far-flung hypothetical: Would readers pay for news if there were no free alternatives? In Slovakia, nine media companies are experimenting with a unified paywall — pay once for access to all — in an effort to reset years consumer assumptions about free content.

Rhode Island would seem to be (to an extent) a Slovakian analog in the United States. It’s a small, relatively uncompetitive, relatively isolated media market. Take Aquidneck Island (which is officially named, confusingly, Rhode Island), home to the 12,000-circulation Daily News. There’s some competition, sure: An ad-supported blog called Newport Now launched three months after the News’ paywall rose. And a year later, AOL’s Patch made its made its foray into Rhode Island with sites in Newport, Portsmouth, and Middletown — the whole of Aquidneck.

Still, once the ProJo paywall launches, we’ll have an interesting case study: If the only two papers covering Aquidneck are charging for access (and the ProJo hardly covers it like it used to) will citizens be more inclined to pay for online news?

The other question might be: Will that matter? In a piece examining “the uncertain future” of Rhode Island’s journalism scene, media critic David Scharfenberg described the dearth of social networking initiatives, inter-outlet collaboration, and other badges of innovation among the state’s media outlets. “What’s troubling about the Rhode Island mediascape,” he wrote, “is how slowly the players have moved to embrace this project — in an era when speed is nothing less than a matter of survival.”

But it could be that survival is a matter of sticking to roots, not branching out. If you view small newspaper publishing as a business, which it is, there’s still money in print. And it’s not as if the web has suddenly created a global audience for local news about Woonsocket, R.I. (No offense to Woonsocket, “a city on the move!”) Paywall or no paywall, the Daily News’ financial worth may lie in atoms, not bits.

And little Aquidneck Island not alone in that. “There still is value in print, no doubt about that,” the general manager of The Columbia (Mo.) Daily Tribune, has said. ”We shouldn’t be apologetic about it, we shouldn’t be embarrassed by it.”

September 30 2010

20:30

Double, double: More on the Boston Globe’s new two-site strategy

Big news today: The Boston Globe is planning to launch a subscriber-only website that will coexist with its current, free site. The new BostonGlobe.com, which is currently scheduled to launch in the second half of 2011, will feature premium content, in the sense of both quality and cost. And the current Boston.com — expected to be focused on “breaking news, sports, and weather, from a variety of sources, as well as classified advertising, social networking, and information about travel, restaurants and entertainment” — will become, essentially, a hyperlocal site for Bostonians.

In other words, the Globe is doubling down on, yes, doubling down. Take your mass-market audience and leverage it via a strategy that rewards mass itself: advertising. Then take your niche audience and leverage it via a strategy that rewards audience loyalty: subscription. (BostonGlobe.com, for its part, will likely feature advertising, as well, though the specifics are as-yet undetermined.) Or, as Bob Powers, the Globe’s VP of Marketing and Communications, told me when I spoke with him this afternoon: On the new BostonGlobe.com, “we’ll look more to the consumers to fund the journalism.”

The Doubleminty strategy is, in some ways, simply a logical extension of The New York Times’ soon-to-be-implemented metered paywall system: While the Globe’s sister paper is trying to serve both its broad audiences — the mass/casual and the niche/loyal — with the same property, the Globe is simply serving them by severing them: by creating two different destinations. Today’s announcement is the result, in part, of the paper’s studies of both market research (surveys of both heavy users of Boston.com and the market as a whole) and analytic traffic patterns (where people were going on the site, and which sections, in particular, were driving traffic the most). “And what we found,” Powers says, “is that there were different audiences: one looking for breaking news, things going on in the city, that kind of thing — and the other looking for the Globe and its high-quality journalism.”

Speaking of that journalism: Who, exactly, will be providing it? The obvious drawback of a site-bifurcation is that it gives you yet another hungry beast to feed. On the paid site, in addition to the content that fills the pages of the print product, there will also be slideshows, photos, interactive features, updates, and other such products audiences have come to want and expect on the web. The thought at this point, Powers says, is that “the same journalists, reporters, and editors will be producing the Globe online that produce the Globe — and generate content for Boston.com — but we haven’t figured out exactly where we need to add online skills and human resources.” And though “we’re prepared to invest in that,” he says, “we want to analyze it a little bit more.”

In part, the double-site plan could be seen as a “retention and switch strategy” for the Globe, Ken Doctor, the Lab’s resident economics-of-news expert, told me. Many papers’ recent experiments with merged revenue streams, Doctor says, are modifications of the one employed by the Arkansas Democrat-Gazette — one ultimately aimed not at stopping print losses, but simply at slowing them. Newspaper companies still get a whopping 85% of their revenues from their print products (advertising and circulation), Doctor points out — “so if you can even slow that loss as you’re transitioning, that’s a good thing.” (Subscriptions to BostonGlobe.com will come free with the paper’s print product.) And BostonGlobe.com, which is being presented as basically a bells-and-whistles version of the print product, could help with that — while Boston.com “gives them the capability of doing, in an easier way, what everybody wants to do: maintain a robust digital advertising business.” The approach, Doctor says, “clears a path to keeping a robust, free site that has a big audience that they can monetize through advertising.”

The double-down’s other potential payoff? A killer app that is, literally, an app. BostonGlobe.com may well represent, Doctor suggests, a middle ground on the way to another, even more removed, destination for Globe content: an iPad or other app. “To the extent that the tablet becomes a switch medium,” he says, “you establish a price that gets reader revenue in the digital world” — allowing for experimentation with, and thus ostensibly refinement of, pricing architectures. You could read the site bifurcation, in other words, as a stepping-stone strategy: a way to help the Globe navigate toward a more tablet-centric world.

Which, though it could prove rewarding, is also risky. One of the commodities hanging in the balance here is also one of the most valuable to a news outlet: its brand. Particularly for the Globe, which has spent years building up its name, there’s the chance that a two-site strategy might solidify into caricatures — The Good Site and The Bad Site — with the latter, in particular, ultimately harming the reputation of the sites’ parent organization. When I asked Powers whether that was a concern during the Globe’s decision-making process, though, his reply was emphatic: “No. In fact, we think that by separating them out, they’re going to strengthen each — that there’ll be greater clarity of what each really stands for.” These aren’t two sites, as he puts it; they’re two brands. And that distinction could make a big difference as Globe staffers strategize about the sites’ content — and about the extent to which it will, and won’t, be complementary.

It’s in large part to allow time for such crucial decision-making that the new site’s launch date is set so far in the future. And that’s probably a good thing. The Globe is owned, of course, by The New York Times Company, and the web-bifurcation experiment, however it works out, will have bearing not only on the Globe itself, but also on other metro papers, among them its (big) sister in New York. (By the time BostonGlobe.com is launched, if all goes according to the paper’s much-publicized plans, the NYT will have erected its paywall.) Its results will offer lessons for magazines, too: The National Journal, it’s worth noting — the Great JournoPoacher itself — plans to implement a similarly divide-and-conquer-focused approach to its web presence. So in doubling down, to continue the metaphor, the Globe is betting big. And they know it. “We’ve got a lot of details to figure out,” Powers notes of the new strategy. “But we want to get feedback, as we develop it — and test what people want.”

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