Gannett expects paywall ‘will be worth $100 million to us in 2013′

If you look past last year’s numbers, good things are starting to happen in the industry, Newspaper Association of America president and CEO Caroline Little said, opening last week’s conference in Washington.

Having myself dished up many of those bad numbers, I took that to heart, put aside skepticism, looked for hopeful signs and found at least three:

DEMYSTIFYING INNOVATION. The industry is coming to terms with the need for heavy cultural change to pick up the pace of transformation.

But keynote speaker Bob Carrigan, CEO of the IDG Communications stable of computer publications and websites, said the basics of an innovation culture are not all that complicated.

His company keeps a close watch for disruptive startups and won’t “cede the territory” to them, Carrigan said. His charge to his product development teams is “get it 80 percent right and do it.”  Sure, there is risk and occasional failure, he added, but “the landscape is littered with companies that were hesitant.”

Both customers and advertisers like it when a media brand is experimental, he said, and pretty soon, “strategy leads culture… After (some) success, it doesn’t seem so odd.”

The NAA’s final general session was also about getting systematic in creating new products and experiences.  Representatives of The New York Times, The Washington Post and ESPN all described sprint-style continuous innovation with an intense focus on what already loyal users may want next.

For instance, The New York Times has recently amplified its traditional theater coverage mix of reviews and features with an interactive digital guide that enables a user to decide what show to see on a given night.

TRY, TRY AGAIN. I looked in on the American Society of News Editors convention (in the same hotel but with a separate program) for a session on what editors should do next.  Moderator Eric Newton of the Knight Foundation had a useful twist, asking editors to discuss upcoming challenges rather than recent initiatives.

That elicited a lot of candor. “We’re still trying to figure out tablets,” said Nancy Barnes, editor of the Star Tribune of Minneapolis, after a hasty first-generation app fizzled.

Similarly in the perpetually disappointing online video field, Barnes said, “we ran after the revenue, didn’t get much and then took our foot off the gas. Now we are trying to grow it again.” (In another session one of her business-side counterparts described a tenfold video traffic increase thanks mainly to two new sports features.)

John Geddes, managing editor of The New York Times, said that at his organization as well tablet apps, smart phones, video and social media referrals are all trial-and-error works in progress. There are potentially great rewards, Geddes said, “but an opportunity to lose a lot of money too.”

This may sound like a negative take on new revenue streams, but I was reassured by the realism. Too often in recent years, industry executives have tried to make their case by simply citing a hot platform and their presence in that space as proof that big growth is just around the corner. Not necessarily.

But it is possible — to take the case of video — that better bandwidth, big-league and big college sports as a hot topic and a surge of advertiser interest will make this the right time for the business to take off after years of earlier failed efforts.

CONTENT IS KING AFTER ALL? At a special media writers press conference organized by the NAA, Gannett community newspaper chief Bob Dickey asserted, “Readers value our content at a higher price than they pay.”

How’s that? Dickey said that Gannett marketers surveyed single-copy buyers leaving convenience stores. If they, for example, had purchased a soda, a candy bar and a paper, they tended to overestimate what they had paid for the paper.

More comprehensive research in that vein helped persuade Gannett to plan to introduce paid digital subscriptions at all 80 community papers this year. “We think that will be worth $100 million to us in 2013,” Dickey said.

He also conceded that to make the pay plans work, Gannett will probably need to add new features and more content creators.  That would be a welcome turnabout for Gannettoids, who just last week endured yet another round of buyouts at the community newspapers and furloughs at USA Today.

At that same meeting with reporters, Jim Moroney, publisher and CEO of the Dallas Morning News and incoming NAA chairman, said that he sees some momentum for newspapers adding more content rather than cutting.

Moroney’s own paper adopted a high price/higher quality print strategy in 2009 and followed with a paid digital plan early last year. He noted that in 2011, the Chicago Tribune “took its price up and put more content in,” even teasing subscribers with preview issues that had white space to be filled with more international stories and other new content.

There was more good news to be gleaned – paid digital subscription plans working well, hope that better display modules and better metrics will improve on the massive disappointment (to date) of online banner ads.

But best of all is the possibility that the industry is picking itself up off the ground, looking to stop the cycle of slashing  and finding new ways to link good content (much of it digital, interactive and produced by others) to good business.

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  • Anonymous

     I work for a company that has placed a pay wall up and they don’t lose nearly 95%-99% of traffic.  It depends on how the paid subscription is instituted, positioned and sold.  So far there has only been about a 30% to 40% drop off and what is more that the unique users with access to digital content via a paid wall are beginning to consume more content (i.e. visiting more pages) so average number of pages and time on each page is rising.  Furthermore, we are able to serve considerably more targeted ads for each subscriber, so they are seeing less junk on the page and more ads for products/solutions/services that appeals to them.  This also makes the advertisement more valuable to the advertisers.

    At the end of the day, since most newspapers don’t sell out of ad inventory and are left with 40% to 50% of inventory being filled by bulk ads, this approach is improving the bottom-line and already advertisers are very pleased…

    Before you make up information, blanket comments or post created numbers as fact, please stay informed.  Know the facts and don’t pretend you know what you are talking about regarding a complex industry.

  • Jacob Ford

    The newspaper industry is severely ailing under the weight of their nostalgia! 
    They think they can still lie to us by all printing the same thing and we’ll believe it.

    Notice how they’ve all gotten together and wont report that 95-99% of their traffic disappears when they institute these paywalls.

    The NYT’s revenue is coming from the investments of rich leftists so it’s quite easy to pretend your latest idea was a huge success when you’ve got a sugar daddy! 
    “We lost a billion dollars this year on operations against the paywall revenue, but technically we got in a billion and a hundred million dollars (thanks Carlos Slim, but we’ll just forget where that little help came from!)…therefore OUR PAYWALL WORKED!!! LETS PARTY LIKE IT’S 1999!!!!”

    So forgive me if I find it dubious that newspaper tradesmen are publishing reports of what a victory newspaper paywalls are! (Most of them are hoping this is some kind of Moses, ready to take them to the promised land of getting rehired at their old overpaid worthless positions.)

  • Anonymous

    Considering that most Gannett papers have nothing to run in their print editions, I can’t imagine how a paywall can work.