Less Interest In Paid Web Sites

By: Carl Sullivan

Last year, many newspapers were considering shutting off free access to their Web sites — “closing the floodgates,” as at least one publisher put it. But there seems to be less interest in shutting those doors these days.

Out of the 1,482 daily newspapers in the United States, only about 15 are charging for access to their Web sites. A larger number charge for some content on their sites, such as special sections or archives, but general news and most content remains free almost everywhere.

An October report from Borrell & Associates Inc. has gotten a lot of industry buzz. The Portsmouth, Va.-based consulting firm found that none of the newspapers charging for online access has gotten more than 2.6% of its print-circulation base to sign up for the paid services.

“That number got people’s attention and pretty much stopped the industry dead in its tracks on the idea of charging for generic Web site access,” says Gordon Borrell, who previously ran new-media operations for Landmark Communications Inc. (and helped create InfiNet, the hosting and service company owned by Landmark, Gannett Co. Inc., and Knight Ridder).

Furthermore, the study found that none of these papers has been able to get more than 12% of its print subscribers to sign up for the online services even when Web access is free with a paid print subscription. Borrell says none of the papers that moved to the paid model have suffered mightily, but none have surged forward, either.

* The largest daily to try the paid Web model (excluding The Wall Street Journal) is the Tulsa (Okla.) World. Last June, the 139,383-daily-circulation paper began restricting access to its online membership area to print subscribers and to those who purchased online-only subscriptions at $45 a year. Only about 2,300 memberships have been sold to nonprint subscribers and about 23,000 print subscribers have registered for the Web service, says Dilene Crockett, online publisher. Viewing classified ads and some entertainment content remains free on the site.

* At the 108,668-daily-circulation Albuquerque (N.M.) Journal, about 12,000 print subscribers have signed up for Web access. A little more than 1,000 online subscriptions have been sold to nonprint subscribers, mostly people from outside the Albuquerque area.

* In Rochester, Minn., the 42,693-weekday-circulation Post-Bulletin reports that 7,400 subscribers have activated their Web accounts, but only 175 people who don’t subscribe to the print newspaper have bought online-only subscriptions.

* While The New York Times‘ site remains free (with registration), the paper is heavily promoting a paid electronic version that uses technology from NewsStand Inc. of Austin, Texas. The service delivers an exact replica of the print newspaper, including display advertisements, to paying subscribers. So far, only 3,000 have subscribed, and 5,350 “single copies” have been sold. The Times says it’s getting about 60 new subscribers a day.

The Pay’s the Thing

Consumers’ resistance to pay for online content remains extremely high, says Greg Harmon, director of interactive services for Dallas-based Belden Associates. Belden’s ongoing survey of newspaper readers finds that less than 10% are willing to open their wallets for Web news. “I don’t think we can make this point too often, especially to senior managers,” Harmon says. He suggests papers move incrementally to the paid-content model.

Nevertheless, the Post Register in Idaho Falls, Idaho, stopped “giving away” content on its Web site, Idahonews.com, two years ago. Three weeks ago,the 24,001-daily-circulation paper took things a step further when it began to require that even print subscribers pay an additional charge for online access. Subscribers to the print edition must pay $3 a month for access, while nonsubscribers pay $6.

About a week after the new policy went into effect, around 75 print subscribers had signed up for paid online access. And the site has 175 paying members who don’t subscribe to the print edition.

Not exactly earth-shattering numbers, but Roger Plothow, vice president and general manager, says that’s not the point. “Even for those newspapers that are now seeing profits online, I believe they come at too high a price — the devaluation of [the newspaper’s] unique content,” he says.

Plothow acknowledges that his employee-owned paper in a smaller market has the luxury of doing things differently. But what he doesn’t understand is why the big newspaper chains don’t experiment more. Instead of adopting chainwide strategies, why not let a paper or two try variations of the paid-subscription model? Indeed, there hasn’t been a whole lot of business-model experimentation as of late.

All of these newspapers with paid models report modest increases in print circulation, but admit that it’s impossible to attribute those increases solely to establishing tollgates on their Web sites. The terrorism-related news of the fall seemed to boost print circulation just about everywhere, and, in Tulsa, a new circulation director has started a number of new programs to attract subscribers.

Still, this small band of pay-for-it proponents are true believers. “Are we a success?” Albuquerque’s Friedman asks rhetorically. “Well, we haven’t had any layoffs, and we’re getting the same advertising revenue that we were before.”

In Rochester, visits to postbulletin.com initially dropped 35%, but the paper found that most of those visitors lived outside the newspaper’s core market area. “That means they weren’t of great interest to our advertisers, anyway,” says Jon Losness, general manager and editor. He stresses that it’s too early to determine which business model will win out for newspapers in cyberspace.

Still, the Borrell report recommends against wholesale restriction of newspaper Web sites, and instead recommends that newspapers consider registration and charging for pieces of their content — anything that’s niche and can’t be found elsewhere.

“Many publishers are now saying, ‘Let’s not close off our site entirely — instead, let’s find niche content for niche demographics that we can put a subscription price on,'” says Phil Calvert, vice president for business development at Clickshare Service Corp., the Williamstown, Mass.-based company that is providing e-commerce technology to about two dozen newspapers.

One of Calvert’s clients, the Standard-Examiner in Ogden, Utah, is building a tiered pricing system for nonprint subscribers and Web users outside its geographic area. “We’re not shutting the barn door on free content,” says the paper’s publisher, Scott Trundle. Instead, he explains, the paper will experiment with “premium and customized content based upon a consumer’s ability and willingness to pay.”

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