TNGCWA Local 30403

Robert Andrews

Even if newspapers migrate every print reader to paying online, they will still face big losses, according to one analyst.

Annual income per paywall subscriber on TheTimes.co.uk and WSJ.com is just a quarter that from subscribers to UK quality dailies’ print editions, Enders Analysis’ Benedict Evans observes in a new note.

Switching off the presses, after a hypothetical future print-to-digital tipping point, might save newspapers 25 percent of their total costs—but this is not enough to make up the gap from the smaller online income, Evans says.

Even adding iPad income to web paywall revenue would only total half the income newspapers are currently making from print.

This is essentially the quandary of trading physical dollars for digital dimes. Publishers like Rupert Murdoch may be starting to conceive of a time, at least in theory, when paid tablet and web editions become popular enough to consider switching off print…

The problem with that, these numbers would suggest—even if all digital readers pay, publishers may need to double annual income per online customer to get there (ie. hike TheTimes.co.uk from £2 to £4 a week, and the iPad edition from £9.99 a month to £19.99).

How’s this for a corollary?—If that sounds bad, imagine the situation for publishers whose websites are not starting charging.

But at least those refuseniks can hold on to existing advertising, which an increasing number of them are considering to be sub-scale all the same…

One ad buyer from media agency MEC tells Independent.co.uk that advertisers have responded negatively to TheTimes.co.uk’s paywall: “We are just not advertising on it. If there’s no traffic on there, there’s no point in advertising on there. Online, we have far more options than just newspaper websites – it’s not a huge loss to anyone really. If we are considering using some newspaper websites, The Times is just not in consideration.”

Newspapers have faced a similar problem before, Evans says – to counter print circulation decline, publishers have added 20 percent more pages in the last decade, allowing the quality dailies to drive up cover prices by 112 percent in real terms.

“But inflating the paper will no longer work: deflation is now the agenda,” Enders’ Evans says, noting recent newsroom downsizing. “What would a great newspaper with 200 journalists look like? Delane ran The Times as ‘The Thunderer’ with 16 pages – a deeply unfair comparison, but perhaps a relevant one.”

Separate recent estimates by myself and by University of Central Lancashire journalism researcher Francois Nel had both found TheTimes.co.uk’s paid strategy could significantly reduce Times Newspapers’ losses, but not entirely.

Reflections of a Newsosaur
source: http://newsosaur.blogspot.com/

Musings (and occasional urgent warnings) of a veteran media executive, who fears our news-gathering companies are stumbling to extinction

The local news sites being developed by Yahoo, AOL, Huffington Post and a growing number of other online players will dash the hopes of most newspaper publishers of charging for access to their online content.

While newspaper executives have agonized for the better part of two years about whether and how to charge for their costly-to-produce content, every indication is that the portals, local broadcasters and other media companies have no intention of asking anyone to pay for access to the increasingly ambitious local sites they are building.

With a fast-proliferating number of respectable local sites giving away news to build traffic for their ad-supported ventures, newspapers simply won’t be able to charge for access – especially when their own stories are likely to become freely available within minutes at any number of competing sites.

The local news land rush gained a formidable entrant last week when it became clear that Yahoo is getting ready to launch a major local news site in San Francisco. As reported first here and here, Yahoo spent some $90 million to acquire Associated Content to begin filling its local sites with tons of inexpensively produced content.

Yahoo joins such up-and-running efforts as AOL’s Patch.Com, MSNBC’s Everyblock.Com, Huffington Post (example: HuffPost-New York), and the ever-more-elaborate local sites operated by television and radio broadcasters (example: NBC Philadelphia).

This is not to mention the hundreds of local sites operated by individuals (West Seattle Blog), funded by philanthropists (MinnPost) and backed by venture dollars (Outside.In). In the San Francisco area alone, the Graduate School of Journalism at the University of California at Berkeley has identified more than 250 local sites.

Even the juiciest scoop published by a paper in print or online will not remain exclusive for long. It will take only minutes for a heads-up local news venture to match any story appearing in the local newspaper. The “QuickRead” technique developed by the Huffington Post is but one example of the how easily content can be cribbed:

A Denver Post story about accusations of racial profiling by police was featured prominently yesterday on the HuffPost’s Denver page. A click on the story led to a one-paragraph summary of the article and a link to the original piece (see screen grab below). For many readers, the HuffPost summary would be sufficient, thus depriving the Post of the traffic it otherwise might have earned.

Beyond matching newspaper stories, AOL and Yahoo intend to leverage citizen journalists to fill their sites with inexpensively produced original content. In its initial email effort to recruit writers in San Francisco, Associated Content promised $10 for the first article.

Armies of low-paid writers Patch-ing together copy like this yarn about a federal raid on the office of a Connecticut foot doctor likely will provide enough free local content in many major markets to satisfy all but the most voracious and discerning news consumers.

With newspaper advertising revenues this year on track to come in at less than half the record $49.4 billion achieved in 2005, publishers have been toying with the idea for quite some time of charging for access to their websites.

Given that all but the most parsimonious newspaper pays more than $10 per story, you can’t blame publishers for wanting to recover the costs of creating content by charging for the online news that most of them have been giving away for free for 1½ decades.

However, the few brave publishers who have tried to charge for content have met with less than encouraging results.

Newsday famously got only 35 takers when it initially imposed a fee to visit its site (but it did not care, because it still provides free access to subscribers of the newspaper and the Internet service provided by its owner, Cablevision Systems).

The Valley Morning Star in Harlingen, TX, lost nearly half of its web traffic when it started charging for content in July, 2009, according to statistics published at Quantcast.Com. Although the paper resumed free web access in April of this year, its traffic only recently recovered.

Combine consistently demonstrated consumer resistance to pay with a plethora of plausible free alternatives and there can be little doubt that charging for day-to-day news coverage – even sparkling local coverage – is not likely to be a fruitful path for most general-interest newspapers.

Instead of putting cycles into exercises like charging for access to obituaries, publishers need to focus their marketing power, content-creating resources and ad-selling capabilities on developing unique print, web and mobile products that will be valued by consumers and advertisers alike.

For anyone other than publishers of mission-critical business or government news like the Wall Street Journal and possibly the New York Times, pay walls will not fly. It is time for everyone else to move on to more productive pursuits.

Print can still play an important role in your overall content marketing mix.

 By Joe Pulizzi

Okay…there, I said it.

You’ll find no greater supporter of online content marketing than me, but marketers and agencies are talking up print for 2011. Yes, in the era or iPads and Apps, there is still a role for print. Continue reading »

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