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Feb. 22, 2013, 1 p.m.
Business Models

Split in two: How The Boston Globe, up for sale, is navigating its free/paid strategy

BostonGlobe.com is increasing subscribers, and Boston.com is finding new ways to make money. But as buyers look at New England institution, how is it juggling its two-brand strategy?

Sitting in his office last week, Brian McGrory, the new editor of The Boston Globe, described the relationship between the two websites — similarly named, often confused, one free, one paid — that his newspaper offers.

“I’ve always thought that the success of BostonGlobe.com was inhibited in a couple of ways by Boston.com,” McGrory said. “One, is this sense that people don’t need to pay for our journalism because they were getting enough of it for free on Boston.com. Two, we haven’t used Boston.com to its fullest potential to let people know what they are missing when they don’t pay.”

That was Thursday. Six days later, the Globe’s parent company, The New York Times Co., announced it was putting the newspaper, both websites, and the rest of the New England Media Group up for sale. Following years of rumor and speculation, the Globe and its New England siblings will be the final parts of the Times Company’s non-Times assets to be sold off. In a statement, Times CEO Mark Thompson said:

We are very proud of our association with the Globe and the Telegram & Gazette, but given the differences between these businesses and The New York Times, we believe that a sale is in the best long-term interests of these properties and the employees who work for them as well as in the best interests of our shareholders.

The Globe that is for sale today is a different paper than the one that was on the block in 2009. Former Globe editor Martin Baron said the paper has continued its deep history of investigative journalism and is making the right bets in multimedia and innovation. “It’s a great group of people and I’m sorry they have to go through this disruption and tumult once again,” said Baron, now executive editor of The Washington Post. “They went through it once already.”

The Globe has produced Emmy-winning online video, was an early adopter of responsive design, and is seeing growth in its digital subscriptions. “It’s a group of superior journalists, they work very hard and they’re totally dedicated,” he said. “They’ve made themselves vital to the conversation in the greater Boston area.”

Perhaps the biggest change to come since 2009 — and perhaps the biggest new factor for potential buyers to consider — is its digital circulation strategy. It’s been more than a year since the paper digitally split itself in two, with the popular and longstanding Boston.com remaining free and a new BostonGlobe.com launching as a paid destination that echoes the print product in form and content.

The digital subscription piece of that model has been a slow climb for the Globe — each quarter has brought additional growth, but totaling just 28,000 paid digital subscribers at year’s end. Whether that’s a good or bad number is up for debate, but it’s hasn’t been enough to generate the kind of new circulation revenue that can make up for the ongoing print advertising decline. At the New England Media Group, of which the Globe is by far the biggest part, advertising dollars have continued to drop, to the point that, in 2012, ad revenue made up only 47 percent of total revenue.

The future of the Globe was already changing before the announcement of the sale, as the company juggled innovation in print and online to find new revenue. Boston.com has become a launch pad for new products, including the creation of an online radio station and selling event tickets. More recently, they’ve begun tinkering with how much Globe content to give away in order to entice new digital subscribers.

In a series of interviews from the last several months, a picture emerges of a newspaper with a strong tradition and local identity that is trying hard to find its footing in the new business of journalism. Now there’s more urgency to that mission. When I spoke with McGrory last week, he argued in very plain terms the past and future of the paper and its city are tied together.

“Think of Boston without the Globe,” he began, “Boston without the Globe is a place where Whitey Bulger is still dealing drugs and committing murders in Southie. It’s a place where pedophiliac priests are still getting transferred from one town, one parish to another. It’s a place where the probation department is still being run like a criminal enterprise. It’s a place where the Democratic speaker of the house is still trading influence. Time and again, the Globe has broke the biggest stories, every day, that are vital to this community.”

Two sites, two personalities

A big key to figuring out the Globe’s future will be to determine the right relationship between Boston.com and BostonGlobe.com. It’ll be from those sites, along with the print paper, that the Globe will expand its brand and its audience, said publisher Chris Mayer. “Diversifying the revenue streams is just creating more of an ability to continue to be steadfast in the way in which we want to support the mission and deliver the core value of The Boston Globe,” said Mayer. “Expanding the number of products is really a part of that.”

“Perhaps we have been a little bit too cautious in terms of making sure we don’t harm Boston.com. Perhaps by being cautious, we haven’t fulfilled the great potential of both websites.”

The state of play between the two sites is shifting. Boston.com is set to be redesigned, and it’s already seen a broad reduction in the amount of Globe content it carries. “I’ll be blunt: Right now, it’s a bit of a muddle between the two sites. There’s not enough of a distinction between what is BostonGlobe.com and what is Boston.com,” McGrory said.

McGrory’s only been on the job since December, when Baron departed for the Post. He said untying Boston.com from BostonGlobe.com and creating a clearer identity for the sites will help make a stronger case for paid content. “There are lessons to be learned there. Perhaps we have been a little bit too cautious in terms of making sure we don’t harm Boston.com. Perhaps by being cautious, we haven’t fulfilled the great potential of both websites,” McGrory said.

Boston.com — which draws around 6 million unique visitors per month, quite high for a regional news site — was always going to play a prominent role in supporting and marketing the new site. With that much traffic pouring through Boston.com, peeling off any of those visits would be beneficial to BostonGlobe.com. At launch, the newsroom allowed five free stories from BostonGlobe.com to go to Boston.com, along with any breaking news and sports coverage. Now that number has been reduced to four, and Globe sports columnists have been cut back. They’ve also tinkered with the free offerings from social media, dropping the number of free links to BostonGlobe.com to two per month, down from five. It’s a move reminiscent of when The New York Times reduced the free stories allowed through its metered paywall from 20 to 10.

McGrory said drawing a line between the two sites means changing the content. The new Boston.com will still have a share of community voices, entertainment, and social media, but the news content will be less Globe-sourced and shorter, with stories rounding out around 100 to 150 words. “There’s a perception that Boston.com is Globe Lite, and a fear on our part that people are saying, ‘Why do we have to subscribe to the Globe if we get Boston.com for free?'” he said. The new framing of the sites would have Boston.com being the “front page of Boston,” McGrory said, while BostonGlobe.com would be a reflection of the paper’s reporting. (That’s actually quite similar to the old framing, but the lines are being drawn more firmly now.)

BostonGlobe.com’s responsive design was ahead of the game, a move that is becoming more and more popular with news publishers. But inside the Globe, the move to two websites meant adapting their workflow for stories, graphics, and multimedia. Jason Tuohey, editor of BostonGlobe.com, said that’s meant taking a less print-centric approach for graphics team: “They’re really pushing the boundaries with multimedia, I think, because they’re creating these interactive graphics from mobile up,” he said. “They’re creating something that works on any device, which is not how a lot of other news outlets operate.”

One example would be the recent 68 Blocks series, where a team of Globe reporters lived in the Bowdoin-Geneva part of Dorchester to tell the story of the neighborhood. The paper amplified that reporting through data visualizations, video, and other multimedia only available on BostonGlobe.com. The series is now available as an ebook, free to subscribers or $2.99 in various formats.

Growing the local audience

“The things that we can deliver that differentiates the reading experience is going to be either what’s happening geographically, or what is happening in this geography that is relevant above and beyond,” Mayer said. The Globe divided the audience for that into two buckets: people willing to pay for a newspaper and those who want news, information, and entertainment mixed with a little social engagement. Mayer said he’s happy with the traffic to both sites, but sees it as the foundation to continued growth. For Boston.com, that means finding new ways to engage with people, on mobile devices, new apps, and social media, he said. For BostonGlobe.com, the goal is exposing more people to the local coverage and unique reading experience of the site. “The product’s a year old,” he said. “What works — in the first year, it’s a way to build awareness and to get people to sample and then subscribe — is going to evolve over time.”

“They’re creating something that works on any device, which is not how a lot of other news outlets operate.”

Another area Mayer wants improvement on BostonGlobe.com is advertising. Part of the sales pitch to readers is its clean, distraction-free reading experience. By limiting the number of ad positions on section fronts and article pages, the Globe hoped to get premium rates for its online ads. Mayer said many advertisers are now looking for more granular audience data as well as tools to evaluate the effectiveness of ads. The fenced-in nature of BostonGlobe.com does provide for some data, as users are required to register to use the site.

But Mayer said they need to improve their ability for targeted advertising and offer new advertising experiences in different products. Jeff Moriarty, vice president for digital products at the Globe and general manager of Boston.com, said the company is developing responsive ads for BostonGlobe.com that would adapt to screen size just like any other piece of content on the site.

As happy as they are with the responsive design, plans are in the works to launch a native BostonGlobe.com news app for smartphones in 2013. Moriarty said they wanted to create native apps that feel built for mobile from a design and utility standpoint, not just a desktop site stuffed into a smaller package. That could mean shorter stories and customization not available in the responsive site, but also using device-based features like geofencing and background downloading of stories, Moriarty said. “It’s really about not dumping the newspaper into an app, which a lot of people do, but rethinking it,” he said. “The other reason for that obviously is to get access to the frictionless commerce of the [app] store.”

Managing the Boston.com brand

For its part in the two-site plan, Boston.com was supposed to play the role of infotainment provider. It’s not exactly a new job for the site, which was one of the early local newspaper portals when it was created 17 years ago. In the new plan, news updates would be short, slide shows, listings, and entertainment would be front and center.

“We’re going to try a lot of new things and see what sticks.”

Boston.com has also taken on the role of experimental money maker. Now visitors to Boston.com can buy tickets to Patriots games, watch live video shows, listen to streaming radio, or find town- or neighborhood-specific news. Another plan in the works is for the site to sell .boston domain names to area businesses. And, thanks to a recent grant from the Knight Foundation, they’re partnering with MIT’s Center for Civic Media to build tools to help connect with readers and report the news.

By experimenting in the open, Boston.com has become even more important to the Globe’s future by becoming a laboratory for new ideas to reach audiences, but also a pipeline for new products. “We’re going to try a lot of new things and see what sticks,” Moriarty said.

They’re also trying new forms of advertising, like the recently launched Insights, which allows local businesses to create blog-like posts that are published on the site. Part Yellow Pages, part BuzzFeed branded content (though the posts don’t appear in-stream with other stories), Insights is another way Boston.com is trying move past traditional forms of advertising to pay the bills.

“As we look at Boston.com moving forward, the advertising opportunities are going to change,” Moriarty said. “The traditional banner positions — though they’re valuable and they work — we need to go above and beyond to really set ourselves apart.”

“Except for the people who want every last bit of The Boston Globe, you’ve got a very robust, free website to this day. Which may explain why the success of the paid site has been relatively modest.”

Even as the sites become more distinct, it’s clear BostonGlobe.com will still rely on Boston.com as a source of both traffic and new subscribers. BostonGlobe.com gets a prominent slot on the Boston.com homepage to promote subscriber-only content.

“Right from the beginning, it struck me as an unusual and creative approach, but I was skeptical as to how well it would work,” said Northeastern University journalism professor Dan Kennedy. “They have had some success, but the skepticism hasn’t entirely vanished.” Boston.com’s news offerings, while lacking the range or depth of the Globe’s, might be good enough for many. If you can get your fill of breaking headlines and Red Sox news on Boston.com, why would you pay for BostonGlobe.com? “Except for the people who want every last bit of The Boston Globe, you’ve got a very robust, free website to this day,” Kennedy said. “Which may explain why the success of the paid site has been relatively modest.”

Kennedy said pulling more news content away from Boston.com could, rather than strengthening BostonGlobe.com, instead send readers to local competitors like NPR affiliate WBUR or The Boston Herald. Overall, Kennedy said it may be too early to judge whether the Globe’s strategy is working.

But the state of the Globe’s double down will likely be a big consideration for any potential owner. Particularly, a new owner will have to determine how much time, and capital, they are willing to invest to see if the two-site approach can succeed long term. McGrory says he believes the paper’s digital strategy is headed in the right direction — even if the mechanics of the sites need tweaking. “I’ve always had strong opinions over the years about Boston.com and, in the last year and a half, the byplay between BostonGlobe.com and Boston.com. Now I’m in a position to exercise some influence on that and its been quite gratifying,” he said. The new Globe, he said, needs to be able to reach people no matter where they are, even if they “are reading us as they stand in line at a Dunkin Donuts.”

“None of this works — none of what we’re talking about works — if we don’t continue here to produce really high-quality journalism that people want to read. We can talk about digital ’til the cows go home. But unless we’re producing material that people feel they need to read, want to read, then we’re screwed on much of the rest of it.”

Photo of Globe presses by Scott LaPierre used under a Creative Commons license.

POSTED     Feb. 22, 2013, 1 p.m.
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