Editor’s note: This article is reprinted from News & Tech, June 2009. These and other new revenue model ideas for the news industry will be discussed in depth by industry leaders and nationally recognized speakers at the Midwest Newspaper Summit on Sept. 17 in Dubuque, Iowa. Find out more at http://www.newspaperevolution.com.
This time, it’s serious.
In a bid to attract meaningful online revenues, newspapers are going back to the drawing board.
Indeed, the drive for change is reaching fever pitch: In recent weeks, publishers such as Dow Jones, The New York Times Co. and MediaNews Group have all touted plans designed to encourage readers to pay for news and information online.
In Dow Jones’ case, it will be through an as-yet-undetermined micropayment scheme, according to DJ Editor-In-Chief and Wall Street Journal Managing Editor Robert Thomson.
Dow Jones declined to comment on the development, first reported by The Financial Times. But the initiative, through which readers can buy an individual story, would be a first-of-its-kind model.
Meantime, MediaNews Group, which publishes 54 papers including The Denver Post, San Jose (Calif.) Mercury News and St. Paul (Minn.) Pioneer-Press, said it’s exploring a model to rein in free content and instead develop paid subscription models. “We cannot continue to give all our content away for free,” wrote MNG Chief Executive Officer William Dean Singleton and MNG President Jody Lodovic in a memo.
The publisher, they said, is working on a plan that includes the deployment of new products and sites aimed at helping MNG stem the losses fueled by the drop in print classified revenues and “offer a compelling new experience for a younger (non-newspaper buying) demographic.” Real value “We are not trying to invent new premium products, but instead tell our existing print readers that what they are buying has real value and to our online audience (who don’t buy the print edition), that if you want access to all online content, you are going to have to register, and/or pay,” they said.
The plan also calls for the establishment of differentiating newspaper and regional news sites that will be managed to highlight breaking news. The news Web sites will include abbreviated stories from the newspaper sites but also include user-generated content. “This site will be focused on a younger audience as well as other targeted audiences based on demographics which are attractive to our current and potential advertisers,” the memo said.
Finally, MNG will focus on developing five or six niche vertical content channels to support targeted advertising, many of which have reverse publishing opportunities.
The memo didn’t say when MNG would launch the initiative, but The Denver Post said test marketing could begin before the end of the year.
These plans come as newspapers nationwide re-investigate how — and if — they can make money online. Although online ad sales at U.S. newspapers had been growing at double-digit percentages over the past few years, in 2008 revenues actually fell by almost 2 percent, to $3.1 billion.
And although more people read newspapers online than ever before, those eyeballs aren’t translating into dollars. To bridge that gap, papers are trying to build revenue models that exploit their local brands.
Keep tabs on Tinseltown The Los Angeles Times, for example, is leveraging its Hollywood heritage, said Juliana Jaoudi, vice president of interactive sales. The newspaper (daily, 723,181; Sunday, 1,019,388) has bulked up its online entertainment offerings, she said, ranging from The Envelope.com entertainment awards coverage to pop-culture blogs such as Idoltracker, Daily Dish Rag and Hero Complex.
The blogs, and the recently introduced Company Town business-of-entertainment blog have all created deeper reader engagement and built stronger advertising relationships with movie studios and TV networks. The goal, Jaoudi said, is “to make sure we deliver the most relevant content to our readers, no matter if it’s our original reporting or linking to another online outlet as part of our aggregation strategy.” “Delivering the most relevant news and lifestyle information translates to revenue because you are going to attract lots of consumers to your Web site,” she said.
Jaoudi wouldn’t disclose how much the Times is reaping from its entertainment focus, nor would the Times comment about claims made earlier this year by Times Editor Russ Stanton that the paper’s online ad revenue is enough to cover its entire editorial payroll. But Jaoudi said latimes.com now extends the Times’ reach by 22 percent, up 8 percent from a year ago. And duplication between print and online readers over one week is now 775,000, a 13.5 percent increase over the past six months, she said.
Varied approach The New York Times is taking a multipronged approach to further build its online revenues. The paper is reportedly close to making a decision regarding how it will charge readers to access its online content, according to The New York Observer.
Times Reader 2.0 brings full multiplatform accessibility and delivers popular New York Times features. The Observer said The Times is mulling options that would include either a membership system or the establishment of a framework that would enable readers to peruse the Web site freely until they hit a predetermined limit, after which a fee would be assessed.
A decision is expected this month. The Times is also beefing up its Times Reader, this time basing the 2.0 version on Adobe Systems Inc.’s cross-platform Air software. The foundation lets users download content without requiring a browser front-end and gives readers a more intuitive reading environment, according to James Dunn, NYT’s director of marketing for digital subscription products. “It’s really simple, it’s intuitive and it doesn’t have a lot of bells and whistles on it. It just delivers what it needs to do in an easy-to-use format,” he said at this spring’s Digital Publishing Alliance meeting in Columbia, Mo.
The Times is offering two versions of the reader. The first, available free of charge for a limited time, offers users access to articles appearing in the front, business and most e-mailed sections. A paid subscription, providing access to all content, will cost $3.45 per week.
One key feature is a newsfeed that downloads every five minutes into a “Latest News” section front. Breaking news headlines also appear at the top of the Front Page section. The new reader also supports video and an interactive version of The Times’ popular crossword puzzle.
Dunn said The Times conducted research to determine how people use the paper. “Home-delivery subscribers are consuming our content via a number of platforms to fit their lifestyle,” he said. “The Print form is immersive where readers spend 30 minutes in the morning, then they check for mobile updates throughout the day and they go on the Web while at work.”
Going local Smaller papers are also actively redefining how they mine new online revenue streams. At the Statesboro (Ga.) Herald, Publisher Randy Morton said the 8,000-subscriber paper swapped out multimedia journalism for video production after initial efforts didn’t reap anticipated benefits. “It didn’t add a lot of commercial value so we decided to do like a lot of folks did in the past and try a produced video show,” he said.
Today, 15 months after it kicked off its first program, “Studio Statesboro” is a success. “It’s a great way to get local video on our site and monetize it,” Morton said of the program. “We’ve been able to recoup our initial cost and now we’re solidly in the black in making money with our studio.”
The paper rotates three commercials from five sponsors in the daily 8-minute broadcast. This month, the Herald expanded its online programming with a live daily news program and plans to offer an hour-long talk show that will be simulcast by a local radio station, Morton said.
Other future programming includes a swap, buy or sell show and a live music radio program. “We want our readers on the site 24/7 from when they are eating their breakfast and reading the paper bright and early, listening to the morning show on the radio and viewing the site during the day,” said Morton.
“Video has been our No.1 growth area in revenue for the past year and it still continues to be. “The ability to generate revenue streams in a variety of ways is something we’ve tried very hard to do,” he said. “But the most successful thing we’ll be doing next year is something we haven’t thought of yet. Our problem is not coming up with revenue ideas but finding the time and resources to nurture them.”
Making money Multimedia and persuading readers to pay for content online aren’t the only tools newspapers are investigating to pump up their bottom lines. The Odessa (Texas) American has grown click-throughs on its Web site by 65 percent after rolling out e-mail software from Verican. The newspaper is using Verican’s e-mail Edition software to send out e-mails twice each day to its subscribers, said Sean Maggio, the American’s interactive manager.
The (Hopkinsville) Kentucky New Era, meantime, is generating four times as much revenue from online contests than it did from its print-only version, using Advanced Publishing Technology’s contest software. APT said papers using its app have posted more than $500,000 in additional revenues through EZ$Contests and EZ$Fantasy Racing.