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June 8, 2009, 10:03 a.m.

Charging (a lot!) for news online: The Newport Daily News’ new experiment with paid content

The Newport Daily News kept waiting for someone else to figure out how to make money giving away news online. But with no obvious solution in sight, its leaders have decided to try an answer of their own: charging for access to the news.

Lots of newspapers are considering similar options. What makes Newport different is that they’re charging more to read the paper online than in print. Quite a bit more, in fact. The idea: Charge enough for the online content that the paper-and-ink product looks a lot more attractive. Don’t undercut your primary product with a free alternative that doesn’t make you money. And provide an online edition for those customers who have a compelling reason to pay for content.

“Our goal was to get people back into the printed product,” publisher Albert K. Sherman, Jr. told me. He said some readers, when hearing about the plan, asked “why would they pay for it on the Internet when they can go buy the printed paper? And that’s perfect — that’s what we want.”

The 12,000-circulation Rhode Island newspaper is old school — it still publishes afternoons on Mondays through Fridays, with a morning edition on Saturday. Last month, the newspaper announced a new three-tier pricing structure for subscriptions. Want home delivery of the print paper? That’s $145 a year. Want home delivery and online access? That’s $245. And if you want just online access — to an electronic edition that duplicates the appearance of the print product — it’s a whopping $345.

“It’s a three-tier pricing structure,” says Sheila L. Mullowney, the newspaper’s executive editor. “And it will be a print-newspaper-first strategy.”

Will it work? It’s too soon to have much evidence; the News is offering a 30-day free trial for the electronic edition, and all users are still in that window. In the first two weeks after the electronic edition became available, it averaged about 1,500 visitors a day, but that dropped to 500 on June 1 when the paper started requiring free registration to access the online version. How many people will be willing to pay is still unknown; Sherman thinks it may appeal to people who have a strong interest in Newport news but live outside the newspaper’s circulation area.

The News brings some built-in advantages to this model. Its competition is limited; the much-larger Providence Journal‘s reduction of statewide coverage has made the News the only organization providing significant coverage of Newport County. And Sherman has not trained News readers to expect full and free content online; the paper has always provided only a limited selection of its stories on its web site. (Even after the pay wall goes up, the News still plans to put some free content on the site, like blogs, obituaries, wedding announcements, and photo galleries.)

The News’s situation has been helped in a number of ways by troubles at the Providence Journal, the longstanding statewide newspaper; when the Journal gave up a printing contract for a Spanish weekly, the News picked it up. (The News also owns several weeklies, magazines, and annuals such Newport Wedding Magazine and Home and Lifestyles.)

The News is betting that, for a newspaper its size, its journalism and its relationships with advertisers work best in print. Sherman says that online ad revenue never made much of a dent in their bottom line, and that keeping print advertisers happy with what the News offers is a much higher priority.

“The people we hired to sell advertising on the Internet just never did very well.”

Sherman, whose family has owned the Rhode Island newspaper since 1918, said “we’ve wanted for years for someone to come out with the new model” that his paper could emulate. He expected it to come from a bigger paper with more resources than his. But now it’s his retro model that’s attracting attention.

“I’m sure the Providence Journal is watching this with great interest,” he says.

POSTED     June 8, 2009, 10:03 a.m.
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