Three newspapers use defensive paid access strategies
A few newspapers sites with paid access have experimented with highly defensive pricing strategies. These experiments show how people adapt to pay walls for local news, however, are designed to discourage rather than encourage online only subscriptions and traffic.
Case study 1. Newport Daily News: Raise online prices higher than print
Challenge: In mid-2009, Newport Daily News started seeing print subscribers cancel, as they utilized their free site Newportdaily.com. The options were to "either charge or shut the site down."
Solution: Begin charging more for internet access than print. The Newport Daily News made industry headlines for this aggressive pricing structure — by far the highest fees among our researched sites. NDN.com is a stand-out in that it charges more for online subscriptions than for the newspaper. At a hefty $345 per year, the site has 200 subscribers so far. GM Bill Lucey says, "For the site to be cost effective, you need a higher subscription price — the ad revenues aren't there to support it."
The site also offers less content than the paper, with all but obits and classifieds behind the pay wall, but they believe it’s enough to keep subscribers from canceling.
Results: Newspaper executives say they are happy with the effort so far, seeing it drive newspaper circulation back up. There has been little effect however on subscriptions. Instead publisher Buck Sherman notes that single-copy sales are up 8% to 10% — 200-some additional sales per day. Bill Lucey adds, “Now we can discount online and target different groups of subscribers." The company discounts online-only out-of-town subscriptions. Traffic, which dropped during the transition, has been climbing steadily though hasn’t yet reach pre-paid levels.
Greg Swanson of ItzBelden isn't convinced this approach is solid. The “cost” of this approach is a low ITZBelden Index score (proportion total page views to the daily circulation, a key measure of engagement) and low traffic relative to enterprise scale. "This site has effectively abandoned ad sales opportunity and is pursuing a sort of anti-Web”strategy that is nearly wholly focused on protecting print."
Case study 2: Idaho Post Register
Challenge: One of the earliest sites to charge for content was the Idaho Falls, Idaho Post Register. When the web site was built in 2001, Plothow notes, “No one could answer the question, ‘What is the business model for online?’ They called me unsophisticated and out-of-date” for my decision to charge for access.
Solution: The Post Register model is simple, and has not substantially changed. Readers find pay walls behind stories that are teased on the front screen. The monthly charge of $6 is about half the print subscription price. No additional content is published online and Plothow considers the web another distribution option for the newspaper, rather than a separate form of media or business.
Results: The Post Register has 632 online only subscribers, or 3 % of its daily paid circulation of 22,000, in addition to print subscribers who have access to the site. The cost of the model is traffic, a hard commodity to value. Still, the site’s ITZBelden index score (the proportion of page views to paid daily print circulation) is very low and the site traffic range lower than the enterprise scale.
Case study 3: DailyRecordNews.com
Challenge: Located in tiny Kittitas County in Central Washington, the Daily Record News also had to decide whether or not to charge for content when it launched its web site five years ago.
Solution: The DailyRecordNews.com charges for access to an e-paper. Their website provides very limited content and, beyond viewing some headlines for free, users must pay for the e-edition to see full stories. Pioneer newspapers, owner of the site, is developing marketing strategies to increase reader awareness of the content available in the paid sections. Today they are also working to display more content on the website. Online subscribers pay $5 a month, $60 a year, while daily paper subscriptions cost $11 per month.
Results: With a daily circulation of just 5,500, the Daily Record has a small base of 115 online only subscribers, about a 2 percent uptake, with page views of 450,000 a month. "It’s a waste of time to drive ABC rates up with the e-editions." The company is considering moving away from the e-paper model and creating a more traditional news and information website.
Lessons learned: Defensive strategies have been effective in protecting declines in print subscribers in some small markets. However the strategy does not produce new revenues or address the long term trends that show increasing reader preference for obtaining news on other platforms.
The author, Alisa Cromer is publisher of a variety of online media, including LocalMediaInsider and MediaExecsTech, developed while on a fellowship with the Reynolds Journalism Institute and which has evolved into a leading marketing company for media technology start-ups. In 2017 she founded Worldstir.com, an online magazine, to showcases perspectives from around the world on new topic each month, translated from and to the top five languages in the world.
