Charging for Web News in Texas

By: Steve Outing

In one of my year-end columns, I looked back at my predictions of a year prior to see how I did. In that column, I noted that the San Antonio (Texas) Express-News still had one of the few subscription-access-only World Wide Web sites in the newspaper industry. That wasn't entirely correct, in that the Express-News site contains much free-access information, although it does restrict access to most of its news content. Nevertheless, the paper's Web site is a bit of an anomoly in the newspaper Web publishing world.

"I think I would characterize us as industry pioneers, rather than as trend-buckers," says Jonathan Donley, the newspaper's online services manager.

The paper operates as a local Internet service provider, selling access accounts bundled with subscriptions to the Web site's news content. It also sells access to the Web site sans ISP access for $4.95 per month (for newspaper print subscribers; others pay $6.95 a month). Offered for free to anyone stopping by the site are the classifieds and advertising areas; discussion forums, bulletin boards and live chat rooms. The paper also has a standing invitation for any special-interest group to open its own free forum on the site. It runs newsfeature packages and special reports outside of the subscriber area. And its Gateway San Antonio package -- of city calendars, directories and event information, and a syndicated user-customized TV schedule package -- is free.

Behind the curtain

The debate about where to "draw the curtain" and put a subscription price on some Web site content has been going on for a while now, led in the newspaper industry by Knight-Ridder with sites like Mercury Center and Philadelphia Online that have experimented with blocking some content from non-paying visitors. The Express-News does appear to have drawn the curtain closer than most (with the exception of entirely subscription-restricted sites like the Wall Street Journal).

Donley says the motivation for charging Web readers a fee to access most of the site is simply because the venture must be profitable. "The reason we charge for our local news product -- along with the premium syndicated features that we've added -- is the same reason we charge for the newspaper. Ad sales alone don't cut it," he says.

"We determined early on that we didn't want to give our core news product away ... rather that we would develop it as a supplementary and eventually an alternative delivery method for news and information services. We believe we offer a valuable service worth a premium price, and thousands of subscribers agree."

Donley believes that newspaper Web sites eventually will come around to his paper's way of thinking. "I interact with many other newspaper online services," he says, "and most are under pressure to develop revenue in the not-too-distant future. They will eventually make money, or they won't exist. Most are setting into place the infrastructure for multiple revenue streams, including subscriptions, because there is no single reliable revenue source. And many privately tell me they plan to charge for subscriptions, but just don't know when and how to impose the policy."

Donley thinks there's a "cyb-urban myth" going around that advertisers can pick up the tab for everything on a Web service, "but when and if that is true, if may only be true for Web sites with national audiences," not local ones like the Express-News'. The newspaper is looking for revenues from subscriptions, archive retrieval, advertising, classified "forced buy" (or upsell), various Web support and production services, and Internet access. (Of the access business, Donley say the paper originally became an ISP because its circulation area was underserved for Internet access. "This is much different now, and we might not make the same decision again.")

"The bottom line is that we actually began making money late in our first year of service. (It's) nothing to brag about, but (we're) not sitting in red ink, either," Donley says.

Trial and error

The Web site staff sets the "curtain" on a trial and error basis, in close consultation with the advertising staff. "It's a balancing act," Donley say. "We want subscribers to feel they are getting their money's worth, but we also need to have enough high-traffic areas that our sales staff can sell space. We offer our entire classified dump online as a value-add to ad buyers, so that's public. Tourism and visitors areas likely to draw national audiences are outside the curtain because they are prime advertising areas."

Inside the pay curtain are such features as a syndicated weather package that includes the only online Doppler radar updates available for the San Antonio area; the ability to see top stories from the paper during the evening before print publication; and a searchable database that contains the text of every San Antonio police report.

In one form or another, Donley believes that charging for content on the Web is inevitable. "We believe that in one form or another, this is the future of our industry ... at least as an alternative. We don't intend to be an ISP forever. This was just a fortuitous window of opportunity for us. In the end, all we have to make money on is our core product and the expanded ways that the electronic medium allows us to repurpose it," Donley says.

"We're just winging it, just like everybody else. We're in the middle of migrating to more powerful equipment and news-handling programs, and designing an aggressive marketing program to replace the low-key approach we used during our start-up year. The trick is to make enough financial progress to carve new media a permanent niche in our company's mission. So far, it's working."

Contact: Jonathan C. Donley, caerc@express-news.net

Newspaper sites come out on top, mostly

American Journalism Review and Newslink have announced the top 50 Web news sites in their popularity poll for 1996. The survey is based on voting by nearly 33,000 individuals who visited the AJR/Newslink site. Newspaper-operated sites did quite well, as the list below shows. (Newspaper Web sites are in boldface.)

The top 50 vote-getters, in order: CNN Interactive, Washington Post, USA Today, New York Times, NandO Times, Wall Street Journal, Los Angeles Times, San Jose Mercury News, Jerusalem Post, Washington Times, ESPNet Sports Zone, Reuters News Media & My Yahoo, The Times of London, Detroit News, The Telegraph of London, Canadian Online Explorer, Tidbits, Sacramento Bee, Edupage, Honolulu Star Bulletin, Christian Science Monitor, Russia Today, Las Vegas Sun, Toronto Star, MacInTouch, C|Net Online, Tampa Tribune, MSNBC, Detroit Free Press, Pathfinder, News Current, Ft. Worth Star-Telegram, Kansas City Star, ZDNet, Environment News Network, MacWorld, Fox News, Chicago Tribune, New Jersey Online, Star Tribune of Twin Cities, Financial Times, Philadelphia Online, News.Com, PointCast, PoliticsNow, HotWired, Irish Times, Milwaukee Journal Sentinel, ClariNet e.news, and Tamnet.

E-mail is so cheap, why charge?

Azeem Azhar of The Economist (London) new media department writes as a follow-up to my Monday column about the Christian Science Monitor's upcoming e-mail edition:
"It's good to see some other publishers take the mantle of e-mail publishing. (But) I am surprised that the (Monitor) has had to go down the route of charging for its e-mail service. We found that our e-mail service does not cost enough to run for us to even consider billing subscribers at present. With nearly 60,000 recipients, Politics and Business This Week represent an attractive audience to advertisers, without imposing heavy distribution costs on us. The Internet really is a cheap publishing medium."

Contact: Azeem Azhar aja@economist.com

Steve

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This column is written by Steve Outing exclusively for Editor & Publisher Interactive three days a week. News, tips, and other communications may be sent to Mr. Outing at steve@planetarynews.com

The views expressed in the above column do not necessarily represent the views of the Editor & Publisher company