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May 27, 2011, 2 p.m.

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

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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.”

POSTED     May 27, 2011, 2 p.m.
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