local media insider

An interview with Kurt Lozier, SVP Dow Jones Local Media Group

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The following interview is edited from this week's interview with Kurt Lozier, SVP of Dow Jones Local Media Group, which is currently testing paywalls in eight small markets.


LMI: Looking over the data, I find it remarkable that 50% of print subscribers have chosen to pay more to read news online.


Lozier: The take rate was higher than we thought. Everytime I read about (publishers) launching a site who say current subscribers get into for free, I want to grab the phone and call them. If you just give it to current subscribers, you don't know if it has value. Our new core product is print plus online.

LMI: Most of your online sales are via up-sells via the print renewal process?

Lozier: Yes. We send out an explanation via easy pay or on their invoice that says, thank you, your renewal is here, and the new standard package is the print plus online combo option. If you prefer to stay with a print only product it's lower, but not a lot, maybe 33 cents per week (the online charge is a 10 to 20% increase - depending on the market). What we think we are seeing is that people take the combo product so they have access in case they need it.

LMI: Wouldn't these people would have simply paid for a price increase, anyway?

Lozier: We talked about that. Maybe that's a true stayment but you have to consider the fall-off. We saw a less than typical fall-off in subscriptions than if ...you just say " I love you but now you have to pay $40 more for the year."   We are showing  people that they have more value by getting access to the digital site, They have it in their back pocket at all times... or they can stay with the old subscription. There is a benefit in offering people a choice.

LMI: Not like Netflix?

No, not at all. Even the word Netflix has become synonymous with paid subscription disaster. 

LMI: What is your penetration for online-only subscriptions?

We are actually running different pricing tests in each of the markets, still gathering data. We run a high of 9% penetration and a low of 1% (online-only subscribers as a percentage of total circulation).

And as a percentage of site visitors?

Lozier: We don't track that. It might be more of a leading indicator to talk about subscriptions or conversions as a percentage of registrants, since visitors coming through search are not really significant.

LMI:  What were some of the most difficult issues you faced? 

Lozier: When you are trying to create a digital business and do things with what are digitally accepted practices today - and you are dependent upon a legacy business sytem - its going to take a lot more work than you thought. It doesn'tmatter if you have Aweber or ExactTarget (what is difficult ) is how do you get the data out of the legacy circulation system. Our system is 20 years old and we are going through the process of replacing it.

LMI: You are rebuilding the engine while launching the rocket.

Lozier: Exactly.

LMI: Since you now have 250,000 registrations, are you planning to use registrations to build other products such as deals?

Yes, but carefullly. Our deals site is www.LimeLightDeals.com and we’re in the process of launching in all our markets by mid-October.

We are going to use the list sparingly to require an opt-in. We know of other media companies that took their whole 100,000 ist and dumped them in to the email database and got into all kinds of spam issues. It's too painful getting blacklisted by the ISP's. 

ExactTarget does give you deliverability reports and comlaint levels by ISP, so that you know if you are having a problem with one ISP or another. Typically what you see is if too many people hit the spam at Yahoo, Google or AOL. If we start having a problem with one of the ISP's we see wha't happening. Once you cross that critical threshold, they will cut you off completely and then you have to work like hell to get them turned back on.

LMI: Do you think that now,  other newspapers groups will follow your lead into paid access?

Lozier: Well, MediaNews is also pulling the trigger. In my estimation there is a fully supported digital advertising business and digital subscription buseinss that can work together very nicely. ...We've lost 33% of the pageviews and 10% of the audience. but the more important thing, is that we took the majority of the hit in our photo gallery... We've been able to increase display revenues and prices because we are reaching sell out in some markets.

LMI: Do you think digital revenue initiatives ultimately will be enough to replace print advertising declines?

Lozier: That's the $64,000 question. I've been working on some models - but keep in mind that this is still just my belief - that show there's not a dollar-for-dollar replacement, but you may be able to keep similar margins. Today you might be a $200 million print-centric media company producing 12 to 15% margins, pulling out $25 to $30 million. In the future you may be a digital company, half the size pulling out the same $25 million. But it may not be a newspaper company, it will be a digital company.