You can’t eat page views for dinner.
American newspapers are finding that out the hard way as their disastrous decision based on the “information should be free” mantra to give their content away on their web sites has led to failure. While this has probably been only a minor factor in the demise recently of the Rocky Mountain News, Seattle Post-Intelligencer and Tucson Citizen and the comatose financial state metro blog online of many other papers, it has become a great motivator.
Now, momentum is building the other way … instead of sitting back and wistfully hoping that a high number of pageviews would generate a demand for advertising, which hasn’t happened, publishers are actively looking at a variety of methods to make money online.
“For many years, I have been concerned that so many newspapers tried to charge for access to their brands and content in one medium … print … while giving it away in another medium, online,” says former Wall Street Journal publisher Gordon Crovitz.
“This had the unintended consequence of signaling to readers that the value was less online. Newspaper publishers hoped that online advertising would be enough to support their digital operations and indeed hoped that it would be the growth engine for the entire news franchise, print and online. Alas, online advertising only grew to the trees, not to the sky.
“Now, with online advertising in cyclical decline, news publishers of all kinds … newspapers and magazines but also online-only news organizations … see that it’s hard to support a news department with only the advertising revenue stream.”
Of the various pay possibilities, the most likely to gain widespread use in the future of journalism is …
SUBSCRIPTIONS. The Arkansas Democrat-Gazette, which long has been the only sizable metro paper to charge for its web site, makes readers pay $4.95 a month. Since that’s about 16 cents a day, we’d say it’s far too low. We’d make it a nice round number, easy to remember … $20 a month. That hopefully would bring in a substantial amount of revenue.
But charge what you need to charge to survive … in this sense, a newspaper will become more like a newsletter with a narrow scope but an audience willing to support it. Aren’t many newsletters profitable?
Subscription has the advantage of being familiar … just as you subscribe to receive newspapers and magazines, you would subscribe to gain access to online news.
Crovitz … who is known for turning the Journal around financially and building its pay site to more than one million subscribers, the most successful such effort in the world … expects the subscription method to work the best: “People want full access to their favorite brands without being challenged continuously to make buying decisions.”
In doing so, he had the last laugh over his critics.
“Over the years, there were times when people predicted that readers would never pay to access news online,” he says. “By the time the Wall Street Journal Online crossed the one million paying subscriber mark, the critics quieted down.”
He makes the important point that while it costs a newspaper money to add a print subscriber, it costs little or nothing to add an online subscriber.
“The profitability of online subscription revenue is very, very attractive. Remember that unlike with print subscriptions, which require buying more newsprint, adding press capacity and using trucks and trains to deliver the newspaper, in the case of digital products the incremental cost is almost $0, making the profitability high.”
A very significant event in the move toward a subscription model online occurred with the entry of Steve Brill … the innovative founder of American Lawyer magazine and CourtTV … and his launch of a venture called Journalism Online, set to begin this fall.
Brill wants to build a national site in which newspaper, magazine and online publishers would place their content. Readers would buy “annual or monthly subscriptions, day passes and single articles from multiple publications.”
His partners include Crovitz and cable executive Leo Hindery, so it’s a pretty high-powered effort that may force a breakthrough and create the answer everyone’s been waiting for.
Another way being widely discussed is …