Leading Voices
Why A New (And Unusual) Pricing Strategy By A Rhode Island Paper Will Fail
Jim Brady was executive editor of washingtonpost.com from 2004 until earlier this year. Prior to that, he served in various executive roles at America Online. Brady began his career as a sportswriter at The Washington Post, and was a member of the launch team of washingtonpost.com. He is currently advising Guardian News & Media, the parent of ContentNext Media, on its U.S. online expansion.
The debate over charging for web content has been consuming the media industry in recent months, and there’s no one working in media who doesn’t seem to have a strong opinion on the topic. I’m no exception, but instead of giving you my broad opinion, I’d like to talk through a real-live example: the announcement two weeks ago of a relatively unique paid model by the Newport (R.I.) Daily News—and explain why I think it’s wrong-headed.
The Daily News will now charge $145 annually to a newspaper subscriber, $245 if a subscriber wants the paper and access to the paper’s web site—and, here’s the key figure, $345 if the subscriber only wants the web site. Yes, you’re reading correctly; this means someone has to pay an extra $100 not to get the newspaper.
This model is one I haven’t encountered before. It does share the same goal – protecting newspaper revenue—as the Arkansas Democrat-Gazette, which also charges more to receive its newspaper than to access its web site. The same goes for the Wall Street Journal, which charges $1.99 a week for its web site, $2.29 a week for the paper, and $2.69 a week for both. Putting aside whether you agree with the pay model, both scenarios make sense: You pay more individually for the paper than the web site, and if you want both, you get a bundling discount. What makes Newport unique is that it has made reading its web site punitive. In its model, you pay the least for reading the paper and the most for reading the web site, with the bundling option in the middle.
On one hand, Newport at least deserves credit for trying something different. Those of us who believe the pay model is largely a fantasy haven’t exactly delivered an alternative revenue model, and those who believe in the paid model are proposing exceedingly complicated solutions predicated on getting one person to pay for content on multiple sites. Newport’s model doesn’t have these problems: It has a clear plan for how to increase revenue and it’s an easy-to-implement solution that applies only to its own publication.
But to me, this model reeks of desperation. It’s as if, having used all of its bullets in the battle to preserve print revenue, Newport has now decided to throw its gun at the problem.
The issue with Newport’s model is fundamental. It posits that, in the battle for the mindshare of future readers, print actually has a chance of winning out. I do not believe it does. In their heyday, newspapers were popular and highly profitable for a variety of reasons, but it wasn’t just because of the journalism. It was because of the daily package that included journalism, print and classified advertising, local community information, comics, etc.
In my view, young readers today aren’t anti-newspaper; they’re pro-web. Now, they can get deep, detailed information on any topic they choose. They can get a variety of views on issues that matter to them. They can find and interact with people who share their interests and/or ideologies. They can engage in direct discussions with journalists and newsmakers alike. And they can get it all whenever and however they want it. Young people don’t rely on the web for news because it’s free. They rely on the web because, collectively, it provides them with a better, more personalized experience than they could ever get from a one-size-fits-all daily newspaper. Add in the environmental concerns that many now have with the physical newspaper, and it’s easy to see why newspapers are in the trouble they’re in.
Newport’s strategy suggests it believes it can drive people away from its own web site and back to the newspaper. And maybe it can—for a few years. But as future generations continue to abandon print, this strategy will reveal itself to be short-sighted. By penalizing people who only want to use the paper’s web site, the Daily News is likely guaranteeing itself future irrelevancy.
The argument many will make is that readers will indeed pay for the newspaper if relevant information about Newport is not available on the web. That’s a fair argument, but in my view, still wrong-headed. While information about Newport on the web might not be conveniently packaged the way it is in the Newport Daily News, there’s no shortage of free information about the city on the web, and there’s likely to be even more in the coming years. A 10-minute cruise through Google (NSDQ: GOOG) turned up a number of sites that provide news and information about Newport, in the form of daily newspapers (the Providence Journal), Providence’s TV station web sites (WPRI, ABC6 and Channel 10), radio stations (NPR’s WRNI), nearby weekly newspapers (the Jamestown Press and North Kingstown Standard Times) and numerous web-only sites and blogs (Newport Online, Rhode Island’s Twelfth, and many others). Not having Daily News content in this mix weakens it for sure, but with $245 a year being the minimum one can pay for online access, it’s a sacrifice most will likely make. If there was ever a golden opportunity for a small, nimble web-only news site, it’s in Newport right now.
Newport is also a popular tourist destination, and the site’s $5 day-pass strategy pretty much guarantees the Daily News won’t be an option for tourists researching the town or looking for things to do once they arrive. For that information, tourists can check out one of the aforementioned sites or the Newport County Convention & Visitor’s Bureau site.
I’ll grant this: If the goal of Newport’s management is to keep the paper alive for as long as possible, and they’ve decided that the web will never produce the audience or revenue its needs to survive, this strategy actually makes sense. But, if it truly felt that way, it probably would have shuttered the paper’s web site altogether.
I will make two predictions regarding the future of the Daily News: 1) in six months, there will be a story on Romenesko where the Daily News brags about how its strategy is working because the circulation of the newspaper has either increased or slowed less dramatically than expected; and 2) in a few years, the continuing decline of print will put the paper in serious financial trouble and leave it no web business to build upon.
To me, this strategy is even worse than a Hail Mary pass: It’s a Hail Mary pass that, even if completed, still leaves you on your own 20 yard line.
Posted In: Advertising, Local, Features, Leading Voices, Media & Publishing, Newspapers
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