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Hawaiian punch! A paywall showdown in Honolulu

Honolulu just turned into a two-paywall town.

It looks like Honolulu just turned into a two-paywall town. Last week, the Honolulu Star-Advertiser began charging for online content. And it’s a hard wall, too: no monthly allowance for stories like, say, The New York Times offers (though breaking news, AP stories, blogs, photos, weather, traffic, and obits will remain free).

Combine this with the fact that the Honolulu Civil Beat, the web-native site that sees itself as a newspaper-esque competitor, is also a subscription-based news site, and things are setting up for a good, old-fashioned news war in the Pacific.

Consider what Star-Advertiser publisher Dennis Francis wrote in his letter to readers: “No other organization can match the Star-Advertiser’s breadth and depth of Hawaii news, and revenue derived from digital subscriptions will contribute to a continuing investment in journalists and technology.”

The Civil Beat, for its part, also seems up to the challenge. Editor John Temple, dissecting its competitors’s circulation stats earlier this week, concluding with this: “Yes, the Star-Advertiser’s audited numbers are higher than the audited numbers of the Advertiser. But that’s not saying much.” Meanwhile, Civil Beat president and co-founder Randy Ching made his own appeal, asking readers whose side they’re on — #TeamStarAdviser or #TeamCivilBeat. “Why pay for the newspaper,” he asked, “when you can get Civil Beat?”

OH, SNAP!

Fun aside (I’m not trying to gin up a media battle. That’s not our style), the new reality has created an interesting outcome from the news-innovation perspective: Oahu will effectively become a laboratory for studying the effects of a paywall on a single, fairly concentrated market.

The Civil Beat is betting on a digital-only model that shuns advertising, meaning that it’s looking to make up its revenue off subscriptions or by developing other products. (Of course, it also has the benefit of backing from Pierre Omidyar, who has deep pockets and a commitment to making the Civil Beat’s model work.) Civil Beat is already trying to maneuver itself to take advantage of Honolulu’s new media scene: It’s introduced a new $9.99/month subscription offer, which cuts their normal price by half. It’s also touting its adless-ness, its apps, and its recently established D.C. bureau.

The Star-Advertiser, meanwhile, is playing the role of the incumbent — and the advantages it has are largely based on that incumbency. It’s already got advertisers and a subscriber base — one that’s already used to a little bit of change thanks to the June 2010 merger of the Honolulu Star-Bulletin and Honolulu Advertiser — and it’s still very much connected to print. At the same time, though, it’s trying to attach a digital model to its brand. The breakdown of its digital subscription plan follows a tiered system we’ve seen before, with online access for existing print subscribers, a print + digital plan for $19.99 a month, or a digital-only plan for $9.95 a month. But that digital-only access number varies as the Star-Advertiser has adopted a kind of zoned monthly subscription model for online, with Oahu residents paying $9.95, other Hawaii residents paying $4.95, and out-of-staters paying just $1.95.

Interestingly enough, Dennis Francis name-checks the University of Missouri small-market paywall study I wrote about in the spring as an indicator that online paid content is finally becoming a viable revenue stream for publishers. The findings from that study, as well as from places like The Augusta Chronicle and the Columbia Daily Tribune, seems to suggest that digital subscriptions may work better in markets where capturing even a small portion of your audience online will help goose revenues significantly.

And what better way to find out if this idea works than by giving readers two pay sites to choose from? It’s almost too-perfect of a scenario for a publisher: a relatively small, isolated population with a limited number of local news outlets. Obviously we can’t forget that Honolulu — and the rest of Hawaii, for that matter — is like any media market, with a collection of local TV stations and public radio stations (as well as other outlets like The Maui News). In that sense, it’s not like there’s a stark choice for residence between pay site A or pay site B.

But how often do we get to see two media organizations in the same community engaging in something like Journalism Stratego, a real-time experiment with new business models? It’s about as close as we may get in the US (let’s not forget the iron “pay curtain” going on for Slovak media) to the type of experiment editors and publisher are eager to see play out: What happens when all the news organizations in an area put up a paywall?

Image by flequi used under a Creative Commons license.

                                   
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  • http://twitter.com/NancyLauer Nancy Cook Lauer

    A small regional such as the Maui News doesn’t begin to fill the need for news on the more populated Hawaiian Islands. Weekdays, my All Hawaii News (http://www.allhawaiinews.com/) site curates the top news of the day, and includes a few independents and television as well as the small regional island newspapers.

  • http://twitter.com/gsamek Geoff Samek

    “What happens when all the news organizations in an area put up a pay wall?” Someone starts reporting and writing news articles that they don’t charge for. And if no one does I’ll move to Hawaii and start reporting for “free” while supporting myself in all sorts of way’s that aren’t pay walls. Informing the masses is about, you know, the masses, not a small committed group willing to pay. End morning rant about the undemocratic nature of pay walls.

  • Anonymous

    The SA’s quality of reporting is poor, but for myself and I think many others, the comments give and take made up for it until they started charging.  That’s when I bolted.  Civil Beat has much better reporting, but the comments section does not compare.  I would pay for a subscription to Civil Beat if they did what the SA did for comments. 

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  • http://twitter.com/CivilBeat Honolulu Civil Beat

    Mahalo manoamakaainana, your feedback is helpful. This is a note from our editor who left this comment as a response to a similar thought another reader had today.

    “When we began, we believed that on-going conversations about issues would be more valuable to people than comments at the end of an article. The approach also had the effect of minimizing the emotional responses that can make comment sections of news sites so toxic.
    In some cases, when covering stories that weren’t part of ongoing coverage (ongoing coverage merits topic pages), the comments are at the bottom of articles. In others, readers are encouraged to go to the ongoing discussions. We understand that this may be confusing.
    We’re evaluating how this is working and looking for feedback from our readers. So we appreciate you writing about it and sharing your concerns.
    One thing I’m proud of is that we’ve been able to maintain the thoughtful — and civil — tone of our discussions since adopting Facebook commenting, which has made it possible for many more people to participate.”- John Temple, Editor and General Manager, Civil Beat

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  • Anonymous

    Mahalo for the quick response.  I think I understand the reasons for choosing this method for ongoing conversations.  But for me, you are correct, it is confusing; sometimes I can’t find comments pertaining to the article at hand, so I give up.  I would prefer the method the SA has, it seems to be more focused.  Anyway, just my opinion, and keep up the good work with Civil Beat!

    ________________________________

  • Donwallace212

    You’ve narrowed the field of media contenders to set up your Paywall Joust, and in the process helped along the slow strangulation of Hawaii news outlets–an outcome I’m sure you didn’t intend. You ignored the most consistent alternative voice for 20 years: The Honolulu Weekly, which is battling to stay alive after the post-merger StarAdvertiser shut off access to their longtime printer. The HW was then forced to print on another island. (At the time of the merger, somebody began stealing every issue of the Weekly as soon as they were placed in their boxes. Can’t prove anything, but it was and continues to appear to be a coordinated effort.)

    It is also unfortunate that you didn’t understand or care to mention the role played by Midweek, the free shopper’s paper, which is actually the owner of the StarAdvertiser and the source of the greatest pressure on any other alternative media. I am surprised you did not know, or mention, the fact that the 5 television stations all merged 6 months before the 2 dailies did. This was contested, but the FCC just rolled over. If you add these mergers to the mergers of the dailies, the picture of Hawaii’s news media that emerges is grim indeed. It’s a virtual news blackout, and it’s happened so quickly developers, politicians and lobbyists are doing as many quick-and-dirty deals as they can, with the public largely left in the dark or misinformed. That’s what you should be reporting about, instead of the paywall.

    Civil Beat has made no impact since its launch, not helped by a dithering tone and a rather snotty leadership style, typified by John Temple’s boast on his first day that his hiring caused the death of the Star Bulletin. A classless debut that has been backed up by classic Mainland arrogance.

  • Greenerpenny

    It would help if Civil Beat released its own circulation figures.