Publishers say paywalls, price hikes are working for newspapers

Four top publishers Tuesday reaffirmed their commitment to print and discussed revenue ideas for bolstering their products.

The discussion was part of an executive roundtable at the Key Executives Mega Conference in New Orleans.

The publishers of the Star Tribune Media Co., USA Today, The Omaha World-Herald and The Dallas Morning News talked about the revenue opportunities for their content.

For Jim Moroney at The Dallas Morning News, his company is converting the story archives into revenue through content marketing. Companies in the Dallas area are in need of content to populate company newsletters, websites and blogs, and the paper is making its archives available for customers of its digital agency. Clients’ monthly bills average $4,000 a month for services that include access to the archives.

“Marketing has become a content war and nobody is better positioned to win a content war than a content company,” Moroney told the more than 500 attendees at the national conference. “I urge you to have a conversation with your newsroom about it. …  I think it can work on any scale in all markets.”

Moroney said when the paper first started the service, there was a minor uproar in the newsroom about it. But, he said, he explained that if American Airlines wants a story to put in its employee newsletter, the paper historically would allow that. The stories, he said, run with a byline and aren’t edited by the client.

The newsroom then got it, he said.

The publishers also are looking to their subscribers to make up the gap left by slow ad sales.

“I think Jim was one of the leaders of being the first in terms of, ‘We need to make subscribers pay more. We can’t count on advertisers,’ ” said Alan Mutter, the panel moderator and the blogger behind “Reflections of a Newsosaur.”

The Dallas Morning News in May 2009 raised prices 40 percent.

“We lost about 12 percent of our subscribers,” Moroney said.

But, it was a good move, he said, and the paper is in the process of raising subscription rates again.

“It raised a lot of money for us and it continues to raise a lot of money for us,” Moroney said. “We’re [at] about 32-33 percent of our total revenue coming from subscribers.”

Current monthly rates are $36.95 for print and $16.95 for all-digital access. The paper was concerned about print subscribers trading down for a digital-only subscription so it hired a research group to talk with readers.

The researchers talked with 2,000 subscribers and asked them if they would cancel print for online at various price points. The research went all the way down to $2.95 per month and still the print subscribers in the study said they wouldn’t end their print subscription in favor of a cheaper, digital option.

“Hardcore news subscribers don’t see digital as a substitute for print,” Moroney said. “They won’t trade down. We say in Texas, ‘You are going to have to take this paper out of my cold, dead hand.’ I don’t think we should apologize for that. We should celebrate that.”

Added Larry Kramer, president and publisher of USA Today, “They’re different products. Even the same content on different platforms is a different product.”

He discussed USA Today’s TV listing products. In print, the list gives readers options, but it has a beginning and an end, which may appeal to some readers. If those readers want to go deeper and find all the listings from prior weeks, they can find those online, he said.

The publishers also discussed how they are monetizing their digital content. Each of the publishers, except USA Today, has some sort of paywall.

Mike Klingensmith, publisher and CEO of Star Tribune Media Co. in Minneapolis, rolled out a pay meter and said it’s the “most important and most successful thing” he’s done during his time at the paper.

“We’ve been able to price subscriptions up,” Klingensmith said. “We have a product we can now sell statewide and nationally.”

The Star Tribune has 27,000 paying digital customers. Print circulation is at 300,000.

“Those were 27,000 people we didn’t have a subscription relationship [with] before November 2011,” he said.

The paywalls work, Klingensmith said, because the smaller papers have unique, local content the readers want.

Kramer said a paywall is harder for a national paper like USA Today because there is more competition.

“Our philosophy is to move to more and more unique content,” Kramer said.

Terry Kroeger, publisher of the Warren Buffett-backed Omaha World-Herald, said his paper is doing journalism that makes a difference and that is resonating with readers. His paper, he said, has been reporting about beleaguered politicians in the state.

Moroney said the newspaper’s competitive advantage is its scale compared to television newsrooms.

Newspaper newsrooms typically are two to four times larger than their TV counterparts and Moroney said that allows newspapers to devote the resources to more in-depth stories with analysis and perspective.

“That’s how we compete and differentiate ourselves from the TV stations,” he said. “The biggest threat to our industry is the continued downsizing of our newsroom.”

Carlie Kollath Wells is a New Orleans-based freelance reporter. She founded NewinNOLAblog.com, a website for new residents in New Orleans, and previously worked for the Northeast Mississippi Daily Journal, Retailing Today  and Drug Store News.

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  • Keith Foutz

    For those of us with access, you may find it interesting to see exactly what the print net paid circulation numbers have done at some of the papers mentioned over the last decade. FAS-FAX for period ending 2002 vs. FAS-FAX for period ending 2012 certainly shows how their circulation strategies of some of the papers mentioned in this article has worked.

    One paper in particular that was highlighted in this article has lost over 50% of their Sunday print subscribers and that is if you include their digital paid circulation in with their most recent FAS-FAX report. To put this in perspective, going from over 700,000 Sunday print circulation to 300,000 print and digital circulation is nothing to boast about in the last decade. Mr. Mutter once again misses the mark by implying a paper charging $35 or more per month is a positive example.

    I also find it amazing we needed a “mega conference” to discuss the value of monetizing content. Once again, print and digital should work as partners, with each driving traffic to and from each other with revenue being maximized on both platforms. Free isn’t the answer now or for the future. Anymore than putting the majority of your resources into a digital first strategy while letting the platform that still pays the bills go without investment.
    Or annual rate increases on circulation to offset advertising losses. I do believe in charging what a product is worth but $35. or more per month seems to drive readership away, in droves

    It’s always interesting to hear “consultants” who no longer are vested in print platform continue to make their dismal projections for newspapers in general. But then again, it’s much easier to provide expertise from 30,000 feet.

    I’m with the new owners of the OCR and Mr. Buffett, who believe in investing back into the industry. In our people. In our equipment and products. And in our communities while grasping the importance of both platforms and various pricing strategies instead of pricing yourself out of our individual markets.

  • Rose25870

    Yes, they are making money now that they didn’t have before but the well is going to run dry. They are going to reach a price point where people will shrug and say, “Sorry, I hate to give this up, but, I can do without. I can get the paper once in a while on the news stand.”

    And, on top of that, they will reach a point where they can’t get enough digital subscribers to make the advertisers happy. As usual, the publishers are glorying in what they can get now and not looking into the future. This is traditional with news publishers and it is exactly how they got to the spot they are in today. They don’t have to look very far back to discover it, either.

    Add to the above the fact that people *will* get their news elsewhere, for free. And, the scripters can break any paywall easily, no matter what the publishers do. As the paywalls are rolling out, the paywall breaking scripts are rolling in and are easily available. As fast as the paywalls change, the scripts can change.

    The publishers are fighting a losing battle and they are contributing to the ignorance of news and politics in this country that led us to a divided Congress and banks that are “too big to fail; too big for trial,” and hatred spewing extremists. The less the people know, the more someone can lead them around by the nose. Historically, newspapers served the function of informing the people. Today, they are locking away that information and betraying their mission.

    When their current business model ends, then what? The news will rise again, for free, as it was meant to be.

  • http://www.findurmessage.com/ Jason Fontaine

    I would like to know the “consultants” who are RUINING print media. Facebook is FREE. Ebay is FREE. Craigslist is FREE. Ask yourself this question – what makes the internet great – is it that you can see the world – or that the world can see YOU? Those that figure it out are making a fortune while print media is slowly decaying….it’s a shame….and it will NEVER work!!!!

  • http://profile.yahoo.com/RUNAKP36P7TVUD4HETE4RY7S4Y Charlie

    The paper raised its price. From what to what? And a second round of rate hikes mean the price will go from what to what? Important information is missing here.