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July 10, 2014, 12:46 p.m.
Business Models
LINK:  ➚   |   Posted by: Joshua Benton   |   July 10, 2014

In yesterday’s paper, The Dallas Morning News announced it was ending its experiment with a “premium” site. We wrote about it back in October, when it launched. (The premium strategy replaced a more traditional paywall, albeit one that had hard categories of free vs. paid stories, not the metered approach most American dailies have taken. And to get my disclosure out of the way, I worked at the Morning News for eight years and root for it still.)

The idea was that, rather than shut a lot of good content off from the free web, maybe you could increase digital revenue by creating a “premium” experience — a nicer look, getting rid of ads — and charging people 12 bucks a month to access it. As the DMN story notes, the premium experience was also “launched with promises of personalization and loyalty programs to come later,” which never really materialized.

I appreciate the Morning News’ willingness to stray from the newspaper norm in seeking revenue. It was an early leader in wringing more revenue out of its most loyal print subscribers; it’s tried out multiple approaches to a free targeted daily product; that paywall strategy went against the grain. But you could see this result coming a Texas mile away. The premium site was not some beautiful, immersive experience — it was aggressively ugly and a pain to navigate. I found it actively worse than the non-premium site, and far from good enough an offering to drive payment. From last fall:

For some more background and details, see this blog post from D Magazine, which features a good insider-juice-laden comment from Dallas journalist Eric Celeste, which I’ll just copy-and-paste here:

• It’s hard to know what lessons were learned by The News because so much of what went wrong here was a result of disorganization instead of strategy. The central question the premium site tried to answer — would people money for a better web experience (what they internally called a “velvet-rope experience”) — was never answered because that experience never materialized. This was partly due to the suicidal timeline the project employed (which caused all other digital projects current and future to be neglected) but also because some elements were never rolled out. The experiment was supposed to have three components (what Dyer would often call “three legs of the stool”): 1) a better looking site; 2) one with little-to-no ads; 3) one that offered significant subscriber perks. The third part — which was Dyer’s responsibility — never really happened. [I’d argue the first never happened either. Dyer here is chief marketing officer Jason Dyer. —Josh] They imagined offering Christmas card photos taken for you by Pulitzer-winning photogs, or game-watching parities with beat writers. They ended up offering T-shirts. That was part of the problem. The other:

• The marketing/sales folks who were effing this cat never got newsroom buy-in. Top newsroom folks were against the premium site from Day 1. Once the premium site went live and starting siphoning traffic (not much, but some) from the basic site, the newsroom freaked. Understandable, since you were diluting the newsroom’s only real measure of success. And even if you think big gray corporate newsrooms need disruption, you’re not going to convince them when your efforts fail spectacularly. The number of non-subscribers who actually came to the premium site, looked around, and said, “I’ll pay for this” was “a fingers-and-toes” number, I was told today.

• The News is not thinking right now about how to squeeze more money out of subscribers. It’s just trying to find a way to reach a mobile audience so it can THEN figure out how to then monetize it. The mobile efforts to which Dyer refers is just a mobile version of the premium site — I know, I know, at least this time everyone will get it for free. But there is a comprehensive, integrated (advertising/newsroom/marketing/subscription) strategy being put in place for a mobile-first platform that should start rolling out this fall and continue for a few years. It’s another valiant effort by the DMN to be nimble, to figure this new-media landscape out before it kills them. But first …

• They have to do what Dyer wrongly says they’ve done: Take valuable lessons from their failures. The DMN learned NOTHING from this it didn’t already know. The paper learned it with its paywall, and its tablet app, and when it tried to charge for high-school scores: People won’t pay for content that is ubiquitous, and the newsroom will (perhaps rightly) sabotage any effort that doesn’t get its reporters the biggest audience possible.

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