How does this make sense?

[Voodoo Chile]

According to this story, Palo Alto, Calif,. has three newspapers that are thriving, while papers in other areas are dying.
But a serious question. If giving content away on the Internet makes no sense as a business model, then how does giving away content for free in print?

http://www.nytimes.com/2010/02/28/us/28sfnewspaper.html?scp=1&sq=palo%20alto&st=cse

Mr. Price’s contrarian streak extends to his take on the newspaper business. He started The Daily Post in 2008, as the recession forced further cutbacks and closings at many of the nation’s already suffering newspapers. And in a time when most newspaper publishers spend much effort figuring out how to profit from the Web, The Daily Post is proudly print-only.
“Giving away news online is a dumb way to do business,” according to its Web site, which does not post any news.

And in a city where laptops, iPhones and Kindles are standard issue, many residents still walk a block or two to pick up one of the city’s newspapers, all of which are free.

 

[OrthogonalWaterfowl]

There's a big difference between giving stuff away for free online and giving it away for free in print. I don't claim to understand the precise economics, but one thing jumps out at me right away:

Here in Philly (and in most other places, I'd assume), the free papers seem to owe a lot of their popularity to their ready accessibility near all the public transportation. People grab them before they get on the train/bus and read them the entire way. You've got a nice little captive audience that's going to read every day and stick with you, and it's a reliable audience that advertisers want to hit and will pay to reach. With the online option, you've got no specific audience; someone going to your site could just as easily go to any other online news site. In print, those commuters don't have too many other options, and certainly not too many other free ones. It doesn't translate into ad dollars the same way.

So those free papers are getting something very tangible in return for being free: they're hitting readers that are going to reliably come back (at least for now) and are going to take a whole issue each and every day, and they probably wouldn't be reading at all if it weren't there and free for the taking.

By contrast, you can put whole issues online for free, and maybe nobody comes to the site at all, or maybe they come and only read one article, or maybe they have ad blocking software and you get no revenue from their clicks, or etc. It's apples and oranges.

 

[Point of Order]

yep

 

[partain]

Just a thought, but most places out west don't have the mass transit systems that are common along the East Coast. So the fact that three newspapers are thriving in a town where nearly everyone will be driving their own car each day is a testimony to how much that town likes its newspapers. The Times story points out that it is an affluent area with a deep advertising base, as well.

 

[Inky_Wretch]

Looks like somebody has been reading.

http://www.amazon.com/Free-Future-Radical-Chris-Anderson/dp/1401322905/ref=sr_1_1?ie=UTF8&s=books&qid=1268174223&sr=1-1

 

[Fredrick]

Most of you laugh at me, but it's a good time to open PRINT newspapers in small to medium sized towns.
You'd make a killing if you do it right.
This free online model was created by gobblygook, fast talking opportunists who created quite a nice living for themselves as "advisers" in instilling fear in publishers that they better beef up their websites and give away thenproduct for free, but ruined many newspaper companies in the process.

 

[Stitch]

Free makes sense if you package the product right.

Even a Web site could work in certain situations. But I haven't seen too many newspaper Web sites that are any good. Most have too much random crap on the home page, with annoying videos or other features cluttering the page.

 

[Football_Bat]

People get too wrapped up in the "free" thing with the print product. Having circulation experience, I can tell you the newsstand cost pays for little more than postage and carriers. Lots of papers these days, including mine, are loss-leading by offering dirt-cheap customer specials.

On the other hand, advertising is where papers make or break their fortune, and the more eyeballs you get, the better rate you can command. So going the free route is attractive in a lot of markets.