Yesterday on the Online News Association‘s discussion list, the editor of a 37,000-circulation daily newspaper asked to hear:
“…from folks who have tried something in between free and paid regarding your online content, such as holding back some print content from online; charging for ‘premium’ online content; giving access to some online content only to print subscribers. If you’ve done anything like this has it produced revenue or slowed print circulation erosion?”
Though I’ve not run a newspaper website in more than a decade, I today replied because I’ve spent more than a dozen years studying online paid content strategy and cases and had for several years been a columnists about the subject.
Here’s the information I provided:
None of those tactics will markedly raise revenues or slow print circulation declines, because none address the underlying change that has occurred in news economics during the past dozen years. If anything, those tactics will simply reduce a newspaper site’s online growth while failing to stem print erosion.
What’s radically changed during the past dozen years is the balance of the supply & demand equation. It’s shifted from scarcity to surplus for consumers. A dozen years ago, a consumer’s only source of detailed (i.e., text) information about international, national, and local news, business news, and sports was his local daily newspaper and perhaps one or two neighboring or regional daily that were locally distributed. Today, that consumer has online access to every newspaper and news magazine in the world. This access means that getting a printed edition of his local daily is no longer as valuable to him as it had been. So, printed edition circulations decline. And it should be no mystery that the declines have accelerated into multiple percentages annually now that most American consumers have broadband (‘always on’) access.
Further lowering daily newspapers’ value online, their traditional print package of news ‘unpackages’ online simply because consumers now have online access to every newspaper and news magazine in the world. A consumer interested in international news is more likely to access NYTimes, Guardian.co.uk, or the text versions of CNN.com, MSNBC.com, or news.bbc.co.uk, than his local newspaper’s website. A consumer interested in national news is more likely to access NYTimes or Washingtonpost.com, or the text versions of CNN.com or MSNBC.com, than his local newspaper’s website. A sports fan is more likely to access ESPN.com or MLB.com than his local newspaper’s website. The remaining value of most local newspapers is reduced to its local news content. Thus even the consumers who might still pay 50 cents daily for a printed edition won’t pay that same amount for access to that traditional package of news content online.
Unfortunately, most newspaper publishers continue to operate oblivious to these changes, as if their product is still a scarce commodity and as valuable as it was a dozen or decades of years ago.
Contrary to most publishers’ laments about online, consumers are willing to pay for access to local daily newspaper content online. The problem is that the price consumers are willing to pay (i.e., the economic value of that content) is so much lower than the price publishers want to charge that there are hardly any sales and hence no market. Five years ago, a survey by researcher Mike Donatello (formerly with NAA, Washington Post, Borrell, and now with
And now that most consumers have broadband and can access the video reports of television and cable networks as easily as they can access the news texts on those major broadcasters’ sites, I’d estimate that the medium amount most consumers are willing to pay for access to local daily newspapers’ content online is even lower than the $1 per month that Donatello’s research reported five years ago.
So much for theory, what about practice? Currently, 35 of the 1,452 U.S. daily newspapers charge for access to either all or a portion of their online content. Only three of the 35 have more than 100,000 weekday circulation:
* One is an exception because it is a business newspaper, The Wall Street Journal (if you think the WSJ is a general-interest newspaper, check out its sports coverage). In nearly a decade, WSJ.com has gained 761,000 subscribers who pay to access content that — whether in print or online — is overwhelmingly tabular data or company reports. This business journal is an exception that shouldn’t be part of a discussion about general-interest newspapers charging for online content.
* The next largest is The New York Times, whose TimesSelect program charges for online access to the paper’s archives and columnists. Its corporation touts how TimesSelect has gained approximately 713,000 subscribers in the newly two years since the program’s launch. However, that corporation’s 1st Qtr 07 financial reports note that only 30 percent of those 713,000 pay; the vast majority of TimesSelect subscribers get free access because they’re either students or print subscribers. TimesSelect and its 214,000 paying subscribers may nonetheless sound like a successful program and a large number, until you correlate it with NYTimes.com’s 13,372,000 registered users. In nearly two years, the premiere daily newspaper in the English language has been able to covert a mere 1.6% of its website’s users into paying subscribers. How would a newspaper with less stellar content do? How many people are 1.6% of your daily newspaper website’s unique users?
* Next largest is the Arkansas Democrat-Gazette, which provides only headlines for free online. I’ve not seen any paid subscribership figures for it. In an essay last week, Publisher Walter Hussman claimed that offering no full content online for free has kept his printed daily’s circulation from declining as much as other newspapers last year and actually helped it grow (1.24%) during the six months ending this March 31st. I however note that more than 400 U.S. dailies that offer free online content declined less last year than his newspaper did and scores more had higher growth than his did by March 31st.
The remaining 33 U.S. daily newspapers that charge for access to either all or a portion of their online content are all under 40,000 weekday circulation. None reports more than 2,800 paying online subscribers and the median was approximately 1,200. There is no consistent trend among the 33 whether or not online charging has slowed print circulation declines.
What I didn’t add to my Online News Association discussion list reply was:
No means of charging online for any slice or dice of the traditional printed newspaper content will work. The solution is to discern why the readership of printed editions has decline for more than 30 years and formulate what other type or package of content that will create demand from them online and in print. Because those declines have been occuring far longer than consumers have had online access, the cause must be reasons other than just the change in supply & demand equation that consumers’ online access caused. Much as fewer consumers are willing to pay for traditional newspaper content in print, far fewer are willing to pay for it online.
The key to the solution is that newspapers onine should stop trying to provide just their traditional content as its package for print. Sending exactly the same content (edition) to everyone doesn’t satisfy everyone. Moreover, most local newspapers have become solely focused on local enterprise and local investigatory stories and at the expense of the more quotian and thorough local coverage (what we now call ‘hyperlocal’ coverate) they provided up to about 30 years ago. Check their archives. I’ll write more in the future about both more articulate delivery of stories (what some called ‘customized editions’) and the need for more hyperlocal coverage. —Vin Crosbie