Wednesday, October 21, 2009

Newspaper companies say they must be paid for their content online, then I get print subscription for $1.15 a week

I stopped subscribing to The Denver Post a few months ago, in part to experiment with reading it online through iGoogle and in part because I was getting so much more satisfaction from reading The New York Times and Wall Street Journal.

The online experiment was scary, at least for a person who still loves newspapers. I discovered that it was pretty easy to live without the print edition and that although the iGoogle version wasn't the best experience, it gave me enough connection to Colorado news that I didn't feel like I needed more. I could read my favorite columnists on Google Reader, and I could pick up a lot of headlines on the radio or TV. I wasn't missing the satisfying reads that you occasionally find in the Post, because I still was getting other good magazines and newspapers.

But I just signed up to become a regular subscriber again. Why? Because I got a call offering me a subscription for $5 a month, or as the vendor told me, $1.15 a week. I was promised this fee would hold for a year, and that I could pay month by month, canceling at any time.

$1.15 a week. This from an industry that is shouting about how it needs to be paid for online content. I'm not sure what's driving the paper's decision to discount so heavily. But it tells me that an industry that regularly touts how valuable its content is still can't get over the need for high volume circulation and will go to great lengths to get it, even if it means sending the message that its content isn't anywhere near as valuable as it says it is. A conundrum that the industry is going to have to figure out.

Either its content is valuable or it isn't. And my latest subscription price tells me the latter is true, no matter what industry leaders say when they're trying to take it to the chins of Web competitors.

133 comments:

  1. Unfortunately, the former editor still thinks as only a journalist and not as a journalist-businessman. What fuels the engine of any business is revenue and for newspapers that is ad revenue. ROP rates are impacted by circulation but the big dollars come from preprints, which are sold on a cost-per-thousand basis. An additional 1,000 of circulation means a whole lot of money to the paper -- enough money to more than warrant "buying" circulation. It saddens me to see Temple continue to sit back and throw tomatoes at an industry that once was very good to him. He and his paper lost the Denver battle because in one way or another they just weren't good enough to be the winner. Get over it and move on -- don't be a hater.

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  2. Noonie is incorrect: adding 1000 subscribers makes very little difference, because newspapers have no pricing power anymore when it comes to advertising. The battle at many newspaper now is not building circulation, it's holding on to it as long as possible, no matter what that costs in subscription rate concessions; this strategy is seen as part of "protecting print," as is the strategy to somehow charge for online access. So the conundrum posed by John is reconciled if you look at it this way: giving away print while charging online may help to prolong the profitability of print.

    The problem with this idea is that it's not a sustainable business model in the long run, because it will not entice younger readers back to print. The average print reader is now around 60 and getting older by the day; the older readers who depart this world will never be replaced by equivalent numbers of new readers. Add to this the migration of advertising to the Web (the current losses of 30 percent each quarter in print will not be reversed - a lot of those dollars, if reinstated in ad budgets, will go online). So newspapers are willingly going down the path of passenger railroads, typewriters, horsedrawn transportation and all the rest, without finding a good way to move into the businesses that are disrupting them.

    The right strategy would be: turn print into a niche product, a sideline to your digital enterprise. Raise prices for print delivery to whatever it takes to maintain some profitability, but keep nearly all online content free. Transform newsrooms and ad sales departments into online-first teams; fully develop the potential of the Web with new kinds of content and new kinds of advertising.

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