The tale of 3 paywalls: E.W. Scripps goes all in, Gannett brags, Washington Post thaws

Newspapers are on the fringe of this year’s annual UBS investors media conference in New York. Still, the meeting has provided a window on growing momentum in the industry for paid digital subscription plans.

E.W. Scripps is late to the paywall party,  announcing just two week ago that after a beta test this year in Memphis, it will roll out paid digital in its 13 other newspaper markets in 2013.

CEO Rich Boehne told me that he has become such a believer that he wants to introduce a version of paid digital content at Scripps’ dozen-plus local television stations as well.  He is not sure of the format yet, but said “we want to give it a try.” That will put Scripps among the first to experiment with paid digital on a broadcast news site.

In his presentation Tuesday, Boehne amplified that he expects the next 12 to 18 months will see most high quality local digital news moving to paid. He is willing to invest from a TV base to compete with local newspapers in that emerging market.

“It’s an opportunity too good to miss,” he said. And within a few years, Boehne predicted, the range of bundle options “will resemble cable tiers.”

The company’s first tests have been with paid apps — for instance one at its Cleveland station that tracks weather at a download cost of $4.99.

At The Washington Post

Earlier in the conference, Washington Post Co. CEO Don Graham opened the door a crack to the possibility of a paywall at the Post. “We will continue to study it and see if we can find [a digital pay structure] that fits.”

But Graham reiterated a statement from earlier this year on why The New York Times’ “very intelligently designed,” successful digital pay plan is not a smooth fit for the Post.

The Times can deliver a printed paper anywhere in the country, Graham said, and print-digital bundles are critical to the plan’s success. The print Post is available only in the D.C., Metro area, so that path is not open.

Graham added that he is concerned that a quality metro like the Boston Globe has drawn only 25,000 subscriptions to its premium digital service in a year.

Also, the Post site draws 90 percent of its audience from outside the D.C., metro area, he said, “and generates a significant amount of digital ads” that he is reluctant to jeopardize.

At Gannett

Gannett is further along in introducing digital pay to its newspapers — 78 of its 80 community newspapers now offer versions of what the company calls a “full-access subscription model.” (USA Today remains free).

The results have been good enough that Gannett led with them in its presentation Wednesday to investors:

  • Along with print subscription price increases, the digital pay initiative has led to 21 percent year-to-year circulation revenue increases as it is phased in.
  • The company has made $20 million in new digital subscription revenue this year and expects to increase that by $80 million in 2013.
  • In four test markets, Gannett research found that 52 percent of customers were accessing news on two or more platforms.
  • Uniques are actually up 4 percent with the new plan, though page views are down by an unspecified amount.

So far, said Bob Dickey, head of community publishing, digital-only subscribers number just 40,000, compared to 925,000 taking a print-digital combination. But he said that he expects to market digital-only more aggressively in 2013 and grow that number five to seven times.

Predictably, most of the digital-only subscribers are new customers, he said, and they skew younger demographically than traditional newspaper readers.

The biggest challenge for the new year will be retention. Many of the subscribers are coming off three-month introductory offers, Dickey said, and the pay plans are so new that none have been through an annual renewal cycle yet.

Gannett, like other companies going to digital pay plans, pushes so-called EZ-Pay, in which renewal is automatic unless the customer opts out.

Advertising forecasts

The UBS conference began with a series of advertising forecasts, and there the news was less positive. The consensus was that 2013 will see slightly less total advertising growth than in 2012, and that newspapers will again record declines.

Though digital advertising growth has resumed, banner display revenue, crucial to newspaper organizations, was flat in 2012 and will be again in 2013 with some increase in volume offset by falling rates.

As I noted in an earlier post, the New York Times Co. opted not to participate in the conference this year because CEO Mark Thompson is so new to the job. McClatchy cancelled at the last minute because it has a debt refinancing in the market and cannot tout its business prospects under securities law.

Despite the certainty of further print declines, I think that the digital subs and other business initiatives like digital marketing services to local businesses have the near future for newspaper organizations looking at least a little brighter than it did a year ago.

The market seems to agree. Share prices of the publicly traded companies are even or up slightly over the course of 2012, and papers put up for sale are finding buyers.

The Post’s Graham said, “Anybody who really focuses on the newspaper business should be focused on Berkshire Hathaway.” Not only has revered investor Warren Buffett bought more than 60 newspapers (and closed one) this year, Graham said, “he is waving his arms and saying we are not done.”

Related: Don’t believe anyone who tells you paywalls are a settled matter (Steve Buttry) | Why does the paywall debate always have to become a religious war? (Mathew Ingram/GigaOm)

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