Newspaper Web Archives: The Pricing Quandary

By: Steve Outing Web archives developed by individual newspaper sites that charge Internet users for downloading archived newspaper articles are a promising revenue stream, obviously. But there's some debate about how much to charge consumers.

A minority of newspaper Web sites let consumers search for and download past articles for free. Another group -- including USA Today and all of Knight-Ridder's newspapers -- charges $1 per article. And some newspapers feel that their archived content is worth a premium price: The Boston Globe, New York Times and Wall Street Journal charge $2.95 per article; the Washington Post will soon start charging $2.95 as well. Others fall somewhere in between, like the Los Angeles Times Web archive, which charges $1.50 an article. The Baltimore Sun will launch its service soon at $1.95 per article.

I've written about newspaper Web archiving issues in recent weeks in this column. And I've stated the opinion that many newspaper companies are setting their prices too high for Web archive services. My view is that individual newspaper archive services on newspaper Web sites should target a consumer market, and thus be priced considerably lower than multi-publication archive database services like Nexis/Lexis, Dialog, et al. The latter services serve serious business users and researchers, who are less price sensitive than consumers and won't abandon those services because they need to search across multiple publications. In a December column about the "ideal newspaper Web archive service," I suggested that 50 cents an article is an appropriate price to attract consumers, parents, students and teachers to a newspaper's Web archive service.

Downward price pressure

I haven't found much agreement for such a low price, but the trend nevertheless will go down over time, suggest many of the archive experts and online newspaper managers I interviewed for this column.

A couple of key factors currently prevent publishers from lowering their prices too much:

1) Web archival system vendors, like Knight-Ridder's MediaStream, promote prices per article no lower than $1. A newspaper using that company's NewsLibrary system as its Web archive must give 40% of its per-article revenue to MediaStream, with a minimum of 40 cents per article. While a publisher could go under $1, it doesn't make much financial sense.

2) As Bill Densmore of Newshare Corporation explains, credit card charges at this time also make it difficult to get the price point down. "My guess is that (it) is somewhere in the 50 cents to 75 cents range," he says. "If you process a credit-card sale, the underlying fee is probably 25 to 30 cents per card authorization, so the person doing the pricing is going to say to themselves: 'This is crazy. Half of what I'm charging is going to our bank and to VISA.'" What's needed, obviously, is a payment mechanism that aggregates many small charges without having to send each one through the credit card authorization/payment gateway. (Densmore is trying to bring such a system to the Internet marketplace.)

At Knight-Ridder newspaper Web sites, the archive charge is now $1 per article downloaded. The chain switched to this 24-hour-a-day price from a time-based system, with a $1.50 charge during business hours and a 25-cent discount rate for evenings and weekends. That was a wise move, because when it comes to an Internet audience, there are no time zones. A user of a newspaper's archive can as easily be in Japan as in the paper's local time zone, so "off-hours" discount rates down make much sense.

Nevertheless, many newspaper companies that should know better continue this practice. The Washington Post, which just launched its Web site archive service this week (currently free during a trial period), plans to offer a discounted $1.50 per article rate from 6 p.m. to 6 a.m. (using its local time zone as a base). The Boston Globe has adopted the same price structure.

Not everyone agrees with my criticism of the time-zone approach, however. Rich Gordon, online services manager at the Miami Herald (a Knight-Ridder paper), which dropped the off-hour-discount policy in favor of $1 flat rate all the time, says, "I was sorry we dropped the 25-cent-off-peak price, because I thought that was a valuable service for kids doing homework, etc."

Support for high pricing?

While logic might suggest that lower prices would increase Web archive usage as more price-conscious consumers become more frequent users, some early experience may not support this. According to MediaStream executive vice president of sales and marketing Joe DiMarino, the Boston Globe's Web archive -- which charges $2.95 per article -- is by far the best performer among his clients. Knight-Ridder sites that operate in similar size cities and charge $1 per article aren't matching the Globe's numbers, he says.

Nevertheless, DiMarino supports the $1 price point and encourages his newspaper Web site clients to adopt it. Part of the Globe's Web archive success may lie with the city's demographics, he suggests, since Boston has a large high-technology sector and many higher education institutions. There are large numbers of users in the area who don't appear to be terribly price sensitive when it comes to using newspaper archive services.

Among Knight-Ridder papers, the San Jose Mercury News -- serving a city with similar demographics -- does well with its archive service. The chain's Philadelphia and Miami papers aren't performing as well, says DiMarino.

The Miami Herald's Gordon says, "I think business users would pay considerably more than $1 -- maybe as much as $2.50. When they want an article for business purposes, they're willing to pay quite a bit. When we (the Herald) changed our pricing structure, lowering the price by 33% during weekday business hours, we saw virtually no change in the number of articles downloaded during those times. Which tells me that business users were not being dissuaded by the $1.50 price."

At Philadelphia Online, the Web site of Knight-Ridder's Philadelphia Inquirer and Daily News, general manager Fred Mann says he dumped a $6.95 flat rate per month subscription for the Philly papers' archive because "I am convinced that we were underpricing our archives with that rate. I think law firms and other businesses around the country were downloading hundreds of articles (from the Daily News and Inquirer) a month for virtually nothing." Now, Philly Online users pay $1 per download, but the service also now searches all Knight-Ridder papers' archives. "A buck a download doesn't strike me as excessive for access to more than 10 million articles from more than two dozen papers," Mann says.

Alternative models

Being talked about a lot but not yet implemented by newspaper sites are alternatives to the per-download fee for Web archives. DiMarino says that many sites he deals with are increasingly looking at the idea of archives as Web site traffic boosters (thus increasing Web advertising revenues). Ad-supported archive services might offer two weeks' worth of a newspaper's content for free, for example. Or a consumer archive service might offer free accounts that give a limited number of downloads before per-download charges kick in. Offering such a valuable service for free is a great way to increase site traffic.

MediaStream also supports newspaper sites selling unlimited-access accounts to schools, libraries and local businesses. An unlimited-access archive account can be sold to a library, for instance, allowing patrons to search and download articles from the newspaper at no charge. Such accounts are restricted to IP addresses of the library computers, and the accounts monitored by MediaStream to watch for abuse.

DiMarino says these type of organization flat-rate accounts, which are increasingly being set up by his customer newspapers, represent an area of newspaper Web archives that begin to compete directly with the Nexis/Lexis and Dialog type services. Such accounts are especially attractive to schools and libraries, which generally need a set budgetable expense and can't deal with fluxuating bills from publication archive services that charge by volume.

Multi-price model

While I've mostly dealt in this column with per-article download fees, the ideal Web archive pricing model should include several options. Single-download charges should be offered alongside monthly subscriptions; discounted rate for a batch of downloads (say, 10 for $5); business subscriptions offering unlimited downloads (for a fairly high fee); school/library subscriptions offering unlimited downloads (for a discounted fee); and maybe even a discounted subscription allowing unlimited or a set number of article downloads during evenings and weekends. (I'm willing to advocate the latter to serve the local parent, student and teacher populations. What I don't support is a time-zone price model that is the only option available to users.)

There are other innovative ideas out there waiting to be tried, as well. An online editor at a major U.S. newspaper site (who asked not to be identified) suggested the following archive models:

Ad supported. Sell several advertisers a year-long package in the archive, and let consumers use the service for free. This is a sure site traffic booster, and a good deal to the advertisers. Subscription upsell. Use an archive account as an incentive to get new subscribers to the print edition of your newspaper. Fare cards. Sell packages of downloads, with the price per download decreasing as the consumer buys more. 100 article downloads might cost $50; 50 articles $35; and so on. Free accounts with limitations on usage. Gives consumers a limited number of article downloads for free (supported by advertising, most likely), after which a per-article fee kicks in. Says this editor, "My personal opinion is that most local newspapers will find that their revenue projections for Web archives are far too high. The New York Times may get away with it because it's the New York Times. But beyond the top tier of major newspapers with national profiles, Web archives are value-added, not a profitable product in and of themselves. ... I hope I'm wrong -- my paper is counting on the money -- but I just don't see the demand. People want the information, yeah, but I don't think they're willing to pay for it."

Correction

In my January 9 column about the Telluride Daily Planet's Web site, I cited an incorrect e-mail address for publisher Tony Daranyi. The correct address is tdplanet@sni.net.

No column on Monday

Due to observance of the Martin Luther King holiday in the U.S., there will be no "Stop The Presses!" on Monday. The column will resume on Wednesday, January 21.

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