McClatchy To Experiment with Pay Model, But Carefully

By: Jennifer Saba

McClatchy is one of the few newspaper companies reporting positive online advertising results in a very tough year. In Q4, online ad revenue was up 14.9% and now represents almost 16% of total revenue*. McClatchy CEO Gary Pruitt stressed during Wednesday morning’s conference call that 44% of online ad revenue was online-only.

It’s no surprise, then, that McClatchy is going to tread very lightly, if at all, with regard to online pay models for its Web sites. Given the NYTimes.com said it was moving to a meter model in 2011, it’s a given the question would come up.

Pruitt said that McClatchy is “not ideological” about pay models and is willing to experiment — apparently, soon.* He said McClatchy is going to try out a pay model on one of its newspaper Web sites, suggesting a visitor could hit a pay wall depending how far she navigates into the site.

Pruitt added that McClatchy tends to believe that the overwhelming model on the Internet is going to be ad-supported. “We feel the model isn’t broken,” he said, reiterating McClatchy’s online ad revenue results. “But we’ll learn from everything – we wish them all the luck. If someone cracks the code, we’ll copy it.”

During the call Pruitt also revealed that rates for packaged buys — online and print — are on average down in the low single-digit range. However online local retail rates were holding and are typically higher than national, thanks in part to Yahoo’s BT platform.

Pruitt said that advertising revenue for Q1 is expected to be down in the low to mid-teen percentage range.

And what would a McClatchy call be if someone didn’t bring up the status of the Miami land sale? Pruitt’s response: “We have received $16 million in a non-refundable deposit for the $190 million land deal. The closing deadline is Jan. 31, 2011. If the deal does not close at the time we are entitled to a $7 million termination fee. We’re hopeful the deal closes.”

*In a previous version of this story, E&P reported that McClatchy’s digital revenue represented 16% of online revenue. It also reported incorrectly that Pruitt said he was “ideological” about pay models. He actually said he was “not ideological” about pay models.

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