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.
Oh, my. Well, at least I get front row seats.
A web strategy that involves driving people off the internet and back to paper…Is it really the year 2009?
Speaking as the citizen-journalist competition: The Daily News may not think they have a monopoly, but there are several hyperlocal sites providing coverage of Newport County — http://ri12.blogspot.com/, http://bayridgeatforestave.blogspot.com/, and my own harddeadlines.com. Speaking for the latter, suddenly my 160 unique visitors/day looks a lot bigger when compared to just 500 for a site with a cost base several orders of magnitude larger.
And at the risk of being branded a snarky blogger, let me just point out that my relationships are with the community, not a group of advertisers.
-John McDaid
In business school we learned the difference between WAGS (wild-ass guesses) and SWAGS (systematic wild-ass guesses). This ploy looks like a DAG to me, one that only an outfit that still thinks it’s a monopoly — and insists on bullying like one — could possibly come up with.
So what happens to the young people 20-30 that will never pay for the online access and will never buy the paper?
What happens to Andre’s young people is that they become middle-aged people 40-50 whose overstrained eyes can no longer take staring at a screen for ten hours a day, and who therefore have returned to doing most of their reading from print.
That is, if they read anything at all.
This is incredibly short-sighted. This newspaper is purposely trying to shove people back to a product the readers don’t want and that doesn’t suit their modern-day lives. This is arrogance by a newspaper that is only thinking about the near future, and this action will severely hamper the long-term future of the newspaper. As I watched the video interviews, I kept waiting for them to stop, look at the camera and say, “Oh, we’re just kidding. We’re not that arrogant.”
Andre, those readers will go over to the Projo or to J McD’s blog – which is excellent. I’m too lazy to check out my blog stats, but I know I put a hurting on the P-Times, my local fishwrap. My pape is sooooo bad that I actually have another person blogging on The Bucket Blog. He too was thoroughly cheesed at lack of good coverage from the local. It’s only a matter of time.
Just to prove that I am, in fact, that snarky blogger living in his parent’s basement:
Jim, you’re old.
Well, gee. I think a publisher that does not understand that some people really do not want fishwrap is declaring war on their customers, or at least a class of them. “You see — you youngins are not sophiphistocated enough to appreciate all the love we put into turning green forests into mushy pulp so you can read perhaps ten percent of the paper, only to landfill or recycle the rest.”
Honestly, there must be better ways to pay for all this — ways that still drive accessibility (meaning barrier to access content) without horrendous cost to the consumer. I think the problem is that most legacy organizations used to the false-monopoly of inflated print-ad margins are totally incapable of doing even a half-intelligent job monetizing all online advertising opportunities.
I am departing this industry (for now) involuntarily, so I am taking a look at my local (metro) paper through the consumer’s lens. I will read online, but I do not want to pay to have someone in a gross-polluting vehicle drive around my neighborhood so I can get a paper in my driveway that is conveniently thrown into the recycle bin. What I really wanted was Sunday-only, but I’m forced to 4-day. Product agendas that have nothing to do with the consumer’s needs should be punished by the market, and will be. My wife plans to cancel her subscription to the paper this week.
The only plus-side to the downturn is that fewer trees are killed.
Won’t work. Here are 9 ways to save newspapers, though. http://bit.ly/2Smfr.
I can see immediately why the online advertising isn’t working. The site needs a redesign in a bad way. It looks like they launched in the ’90s and never went back. No updating content. Bad user interface. Let me guess, those online ad sellers have no support from their advertising department in leads. I’m even going to bet there probably wasn’t even collateral to help them sell.
Newspapers have to distribute content in both mediums. This paper is doing exactly what the auto industry has done for years, creating products their customers don’t want and forcing them to buy it. How’s that working for GM, Chrysler and Ford?
I’m one of those over-50 people with middle-aged eyes. I find newsprint very difficult to read, unless the lighting conditions are perfect. On the other hand, my MacBook Pro has beautiful, readable, ADJUSTABLE-SIZED fonts. Match that with your printed paper. Why should I have to deal with recycling your stupid dead trees, just because you can’t get your business model right?
It won’t be long before we know whether he succeeds or not, and I will be looking for a follow-up from Nieman Lab. And if he does, are all of you naysayers above willing to admit that you were wrong?
Rudolph,
I definitely will be looking to follow up on this story, both at the end of the summer and perhaps by year’s end.
The comments here speak for themselves, but I suspect a lot of small dailies and weeklies will look at this approach with great interest. The question will be how one measures success. If the Daily News sells few online subscriptions but print circulation and ad revenue hold steady over time, they may see that as a positive outcome, given their focus on print-first. What will be most interesting, perhaps, will be to look at who will pay the premium for online only – individuals or organizations, and for what purpose?
If the News sells a lot of online-only subscriptions, I think everyone will be surprised; that will certainly warrant attention.
Anyway, given the many comments here that predict disaster for the Daily News, I believe the updates may hold some interesting perspectives.
Ted
Have they any thoughts on why their no doubt vital, unique and irreplaceable content only adds up to a pitiful 12,000 circulation as it is?
Here’s a clue: our newspapers were never as important to people as local monopolies made it appear. They were buying a package — containing much more than just “news”.
But when I can now get my weather, TV guide, film reviews and trailers, music, video, maps, books, photos, games, reviews etc on a single mobile device — there’s not much value left for me in a piece of paper.
Something is happening, and you don’t know what it is….do you, Mr Sherman?
Well done Albert Sherman! The somewhat hysterical comments from the Digital-is-everything brigade must surely hearten you. When they have to descend to childish abuse it is a clear indication that they fear that newspapers may have found a response. I hope, for all our sakes that you have the success you deserve.
If you want to drive people back tot the printed page… get off the internet. You don’t HAVE to be on there.
Joseph S.
Users are not going to be driven anywhere. They will go to get what they want to the most convenient place to get it. The issue is to connect the print to the web in one seamless user experience. Like most things in the world it’s never either/or it’s always and/or.
I’ve got a newsflash for anyone on here that thinks the internet is the future for newspapers…. IT’S NOT! Let me say it again… IT’S NOT. Whew, now that I got that out of the way let me explain. Anything a newspaper can come up with online can and will be made in someones house with 1-3 people. The ad rates for these operations will HACK newspaper rates to a point newspapers can’t compete. For the last 15 years newspapers have tried and tried and tried to make the digital revolution a reality. The only thing they have done is give every reason in the world NOT to buy their core products. We have trained people for the last 10-15 years that all of this content we create is free. This may sound like a shocker but the real revolution for some papers is pulling the plug.
Web reality check.
Most people won’t pay for web content. Example: Charge 1 dollar a month for Myspace and Facebook and those sites will be ghost towns.
No one pays for news online: We’ve trained them not to pay for it and there are too many sources where news is free including home built news services.
Advertisers hate advertising online:
Anyone that has half of an insight on web surfing knows the attention span of an online user is as much as a 3 year old. Even the term “web traffic” isn’t having the punch with advertisers as the industry thought it would.
Mobil news.
I can’t think of any ad I look at less than a mobil news ad. I wonder if the advertisers know that? Of course they do. That’s why advertising revenue on a mobile device wouldn’t cover 1/2 the pay of the person maintaining it. AP mobile offers mobile news for free with your local news on it, with you logo on it if you’re a subscrber. How can you compete with that?
In closing, just like print the products we create can’t just be “cool products.” They have to make money. Maybe news organizations need to reinvent the newspaper. Maybe it’s more niche products than a single big newspaper. The web can be a useful too to push these new directions newspapers create. But “the web is our future” is starting to become more of an ego issue for newspapers than a solution.
Oh, Buck, old friend! Take it from me that this is a disastrous strategy.
This is a facinating concept and I and, I guess, fellow newspaper editors throughout the world will be keeping a close watch.
We’ve all made rods for our own backs by loading more and more exclusive local content on to our websites, free for anyone who cares to look. Most realised long ago it was a mistake but no one has yet come up with a viable way to reverse it.
The Newport News probably has a better chance at making this work than, for instance, a paper like the Washington Post because its strength is in its local news, targeting a local audience. Every readership survey I’ve seen shows an overwhelming demand for exclusive local content, covering the issues that have a direct impact on the daily lives of the readers in their own communities. That readership package includes the ads, for products and services in their area.
So if the Newport News has strong, exclusive local content available only in the printed paper (or on line at an inflated price) it may have found an answer to the problem we’re all facing _ how to remain profitable while generating enough revenues to sustain the news gathering.
Some of the posts to this get right to the heart of the problem facing all newspapers _ they expect to get all the news they want to read on line free as of right. Logic says that can’t continue. Journalists are paid to cover the local issues that you want to know about. If there’s not enough revenue generated to keep them employed the issues won’t get covered. So news has a value.
The real question here is how much value readers of the Newport News place on that exclusive local content.
John McDaid http://www.torvex.com/jmcdaid/?q=blog/1 & I run the two local Newport Co. blogs. John got his start when he was providing local coverage of the School Dept. when no one else was.
Local papers need to do what they do best- provide local news. What we actually get is some news and lots of fillers.
Monday the daily snooze, oops, “Daily News” is pay only for news. Will any of these efforts make a difference? Doubt it. Local news in various formats. Works for me.
They could actually try lowering their high ad rates for more business.
500 hits/day. Heck, John & I get half that with no overhead. They are not fond of the Internet, let alone bloggers. Does it matter? Seems rather short-sighted to me.
They do have print competition, though. A free weekly with some news, cheap ads, & a strong online presence. http://www.eastbayri.com
Does any of this make any difference to me? Online site is expensive & clumsy- a no-go for me. Will I buy it more often than I do? Probably not.
Why wold a small publisher do this when they have to compete with free content from boston.com, projo.com, the herald and local bloggers. I guess they like unemployment.
I agree with Newport. We are producing strong, local content and being asked to give it away. How can that be a business model? Bloggers, go to it. That is just more blather.
To Richard, who writes:
“Have they any thoughts on why their no doubt vital, unique and irreplaceable content only adds up to a pitiful 12,000 circulation as it is?”
Gee, I don’t know … maybe because they’re in a relatively small market? Newport’s population is about 25,000.
What kills me about bloggers, though–and I am one–is that, much too frequently they rely on the local, exisiting and, likely, dying newspaper for their own information. I’m out of Kansas City here and one blogger in particular (“Tony’s KC Blog) daily uses the paper’s news and sources for his own blog, yet he trashes that same paper repeatedly. It’s insane.
What newspapers need to do, hopefully, is 1) either keep on staff or hire back good reporters who can and do attack local issues hard, especially local government, etc. With harder-hitting news, they have a better and more valuable, important product to put out. As it is, most all these news organizations are slashing their staffs and cutting back the paper and reporting but expecting everyone to continue to want the shoddier product they’re putting out. Again, for a local example, see The Kansas City Star.
2) Have a much better product online–one that a) reflects how the paper looks, for starters and b) is easy to work with and search. Once again, for an example of how NOT to do an online newspaper, see The Kansas City Star at http://www.kansascity.com.
We need to trasition to clean energy–I know, different subject–hopefully, as soon as possible and with photovoltaic cells and transition to online newspapers and reporting so we can, as said above, stop leveling forests, to create this mush so we can spend 20 minutes with it and then throw it in a landfill.
Simple as that. (Tongue firmly planted in cheek).
Mo Rage
The Blog
another note:
It’s the same with newspapers as it is with old gentlemen who wear suits to the office. (I used to work for a men’s clothing store).
Every time a hearse takes another senior to the cemetery, it’s one less person who will read the newspaper.
The younger the person, the more they use the computer and the less they need, want or read the paper. Get used to it, ladies and gentlemen.
This experiment may work for a little while but it’s like the pilot who turns his engines off on his plane, mid-flight–pretty soon the plane starts going down.
Mo Rage
The Blog
PS. And I don’t trash newspapers in person or on my blog.
Newspaper truths:
1) We will be weaker–mightily–without them, as a society and citizens and
2) They are dying, in their present form and what used to work, isn’t and won’t.
Accept these as truths, if you work for a paper, and go forward from there. If you deny either of these–and I think too many people in this industry are–and you will be one more of the dinosaurs yourself.
As The Eagles sang in one of their songs: “Get over it”.
Mo Rage
The arrogance lies with people who believe they are entitled to have their news for free.
Mr. Sherman: Go for it. It’s a worthwhile and, in many respects, gutsy experiment. Tell your critics to go pound sand. They are not your customers anyway, so who cares what they think?
I teach journalism, and run a web magazine, so I applaud the Newport Daily News for taking a crack at a creating paid web product. Alas: by aggressively overpricing it, the paper sends a “welcome, stranger” message to short-term or occasional visitors like me. I’m an out-of-towner in Newport for a single stormy winter’s night, and would gladly pay the normal cover price to catch up on the local news online. But, $5 for a single read? Sorry! If the News dropped its daily price to 50 cents or a dollar, I’d gladly fork over a the requisite micropayment next time I’m in town.