Thinking out loud ...

[Andy _ Kent]

I know my stance on this differs from many on this board.
But, newspapers have never charged the consumer for their content. To think now, because the rules have changed, that they are going to reach into a paid content realm and save the industry is ridiculous.

You know, during one of those writer's workshops down here in South Florida a couple years ago, I remember sitting in on the multimedia session as one of the session leaders, during the course of his presentation, used network television as his argument for why newspapers don't charge for the content. He said you don't pay to watch your local news or listen to your favorite local talkshow host on the radio, so why would anyone accept paying for our content?

Thoughts?

Oh, and by the way, it's nice to see so many responses to my first original thread here on the board.

 

[kleeda]

If people are unwilling to pay for information, then there's no point in having an information business. Believe me, that applies to advertising, too. There are some major corporations that are thinking their Web site is all the spending they need.
Case in point, the Gap. Eliminated all TV ads. Earnings went up.
If advertiser-supported business models don't work, then charging for content is all that's left. Maybe it won't work. But it has to be tried, or else accept the fact that this society is going to do without its free press.

Advertiser-supported business models absolutely work on the Web.

My section of my Web site turns a profit I estimate at about 500 percent. Yes, 500 percent. Yes, that includes a percentage of salaries for the numerous support staff it takes to keep the servers running, etc.

But we've been in the business awhile, and we didn't always make money, and we have an ad staff that knows what they're doing because -- well -- we've been in the business awhile.

I work for what amounts to a major metro in staff size, only we pull in money like an entire chain. We do that because we are a company with worldwide reach and the cross platforms to deliver what 99 percent of fans actually have time or desire to consume. If you want to know what's happening in any sport at the college or pro level, you don't have to go anywhere else. If you have to have that "local" take on the Rockies every day, then maybe we're not your first choice. But you'll come here to read the national take on the Rockies anyway.

Newspapers can't -- or won't -- charge for content because where you really differentiate yourselves is with what amounts to a niche product. Your expertise is local, and in sports in particular is primarily limited to high schools and small colleges. Differentiating yourself on pro coverage? I don't see it, and I read a heck of a lot of it. The four main sports Web sites give me about everything I need to know about anything I want to know about. Your columnists are also a niche draw. And I don't have to read the Bryan-College Station Eagle to know what's happening at Texas A&M.

I figured newspapers were doomed when they started putting together focus groups and reader panels that the brass interpreted as saying "make yourself essential to our lives." So we started covering junior highs. One day I came back from a summer league game and told the sports ed he/she would be better off (and spend less) if they kept me home off the payroll and gave everybody in the stands a $20. Stupid.

 

[kleeda]

One other thing to add.

I see no discussions on this board about Mobile Device content. That concerns me.

Newspapers making money on their Web sites is only the interem step. Withing five years, it will be about making money on content delivered to mobile devices.

Think of the Web as being a compact disc ... and it's 1999.

 

[Andy _ Kent]

Kleeda,

Who, praytell, is your employer?

 

[kleeda]

No secret. ESPN.com.

 

[kleeda]

deskslave: Almost surely. A reader suddenly deprived of free news from Boonieville could sue if there are two papers in that town and they had both agreed to follow the new national policy of paid Internet news. It could be called a cartel or a conspiracy or something along those lines and everything's free again. Or he could lose.

I don't think there would be any successful lawsuits. You're not required to give it away under government charter or anything.

 

[Andy _ Kent]

No secret. ESPN.com.

Sorry for not knowing that, but as you can tell, I'm still pretty new on this board. But how much do you believe having the already established brand of the leading sports network behind you plays in the successful profit margin, as opposed to an individual newspaper Web site?

 

[WriteThinking]

Something like Insider is for the uber-fan who will pay for content, but it will never be the model for the entire site. The one thing that could help newspapers (actually, their Web sites) is sports going to pay-per-view, which I'm willing to bet happens far and wide in the next 10-15 years. Then people may pay a nominal fee for your content.

Charging for content will not work. It never would have on a large scale for long (see AOL). Quit daydreaming.

Something like Insider might not be only for the uber-fan if everyone else is doing something similar. In that case, it'd be nothing more than just like everything else that people specifically choose/buy.

And I would argue that newspapers would not be charging just for content per se. They would be charging for their brands, their versions, the news as it applies to their area, their coverage. If that's what you would call, seemingly somewhat derisively, hyper-local, or, a niche product, well, then so be it.

That is what newspapers -- in all their varying forms, locations, styles and points of view -- have always been, and done, essentially, anyway.

Look, the newspaper industry screwed this up from Day 1 in most cases, and papers that were way ahead of the curve (some in the Knight-Ridder chain) were scaled back just as things were taking off. It was WILLFUL ignorance from the beginning.

And don't think for a minute it was reserved for the bean counters. An editor at a paper I worked for said he/she would make certain I was all-but blackballed by papers when I made the online jump in 1999.

Just because people may start out in a place of ignorance/unwillingness to change does not mean they must, or will, always remain there.

Advertiser-supported business models absolutely work on the Web.

My section of my Web site turns a profit I estimate at about 500 percent. Yes, 500 percent. Yes, that includes a percentage of salaries for the numerous support staff it takes to keep the servers running, etc.

But we've been in the business awhile, and we didn't always make money, and we have an ad staff that knows what they're doing because -- well -- we've been in the business awhile.

Your Web site/section is the only one that could ever make money?

As far as pro-sports material, I would argue that many newspapers -- most of them, actually -- don't necessarily have to provide vastly differentiated versions.

Hello, AP, right? There is already not that much differentiation in that stuff. There never really has been, outside of columnists, maybe.

You are fortunate that you're at ESPN.com, I guess. I'd be glad to be there, myself, right now. But you might not always, necessarily, be the only game in town.

 

[Sam Craig]

Here's a question. Do you give newspaper subscribers a password so they'll have access to the web content too? If so, does that mean if a reader signs up and pays for the web content, do they get a newspaper subscription?

I ask this because I think that's what ESPN does. When you sign up and pay to be an insider, you get a subscription to ESPN The Magazine.

I've had that idea for awhile. Have a fee to access the internet content and it would include the newspaper edition. It could help circulation numbers but it also could drive up costs (newsprint and printing). Of course, maybe you give them a choice to opt out of the newspaper copy if you want.

Hell, I don't know. I'm just throwing out ideas.

I've got mixed feelings on whether or not paying for the website content will work in any format.

 

[kleeda]

Something like Insider might not be only for the uber-fan if everyone else is doing something similar. In that case, it'd be nothing more than just like everything else that people specifically choose/buy.

And I would argue that newspapers would not be charging just for content per se. They would be charging for their brands, their versions, the news as it applies to their area, their coverage. If that's what you would call, seemingly somewhat derisively, hyper-local, or, a niche product, well, then so be it.

That is what newspapers -- in all their varying forms, locations, styles and points of view -- have always been, and done, essentially, anyway.

Absolutely true that it is what newspapers have always done.
Unfortunately for newspapers now, they weren't facing threats from national information providers attached to multi-platform media entities with the power to bring essentially the same information to homes 6-12 hours ealier. And I believe that the local paper's version of college and pro sporting events matters to a shrinking pool of readers. And most importantly, Rome has been burning for at least five years, and most newspapers have been fiddling.

Just because people may start out in a place of ignorance/unwillingness to change does not mean they must, or will, always remain there.

No, but the time to get there was about 10 years ago. A little background. When I went to another national Web site nine years ago, we were interested in joining APSE. "Why not? We're essentially an online national newspaper." We were told to pound sand. Our reaction? "Screw 'em. They'll be begging for mercy in less than 10 years."

Your Web site/section is the only one that could ever make money?

As far as pro-sports material, I would argue that many newspapers -- most of them, actually -- don't necessarily have to provide vastly differentiated versions.

Hello, AP, right? There is already not that much differentiation in that stuff. There never really has been, outside of columnists, maybe.

You are fortunate that you're at ESPN.com, I guess. I'd be glad to be there, myself, right now. But you might not always, necessarily, be the only game in town.

Newspaper Web sites will make money -- eventually. I don't know how long it took for the big sites to make money, but I don't think any were breaking even as recently as 2002. It's a long hard slog and most newspapers have taken a baby step or two. And it takes money to make money at this point. Repurposing AP content online will get you killed in this environment. So while the big Web sites built an audience with a handful of writers and 95 percent AP copy, newspapers won't have that luxury. And as I said, the big sports Web sites have a staff on par with a major metro's entire operation, but not a fat major metro. In fact, I can think of two that have writing/editing staffs the size of of a 150,000 circ daily circa 2003, but with an international reach.
ESPN is a great place to work. Heck, we have everything you would want to know about Cricket. Will it always be the only game in town? Most assuredly not. But newspapers gave us and others like us one hell of a head start.

And as I've stated before on numerous threads, I read my Hartford Courant on good ole newsprint every day (Hey, Courchesne!). I'll likely always subscribe, but there is getting to be less of it to read.

 

[kleeda]

No secret. ESPN.com.

Sorry for not knowing that, but as you can tell, I'm still pretty new on this board. But how much do you believe having the already established brand of the leading sports network behind you plays in the successful profit margin, as opposed to an individual newspaper Web site?

It absolutely plays in. Newspapers have established brands too, though. And losing all those overhead costs figures heavily into profit. Pay staff, pay travel. Then pay for a full year's distribution the average newspaper probably spends in a week.

 

[old_tony]

Here's a question. Do you give newspaper subscribers a password so they'll have access to the web content too? If so, does that mean if a reader signs up and pays for the web content, do they get a newspaper subscription?

I ask this because I think that's what ESPN does. When you sign up and pay to be an insider, you get a subscription to ESPN The Magazine.

I've had that idea for awhile. Have a fee to access the internet content and it would include the newspaper edition. It could help circulation numbers but it also could drive up costs (newsprint and printing). Of course, maybe you give them a choice to opt out of the newspaper copy if you want.

Hell, I don't know. I'm just throwing out ideas.

I've got mixed feelings on whether or not paying for the website content will work in any format.

That's exactly the model I'm thinking of. If they pay to have the paper delivered to their home, they get a password to the website. If they pay for a password to the website, they also get the paper delivered to their home. It helps both ends.

 

[Frank_Ridgeway]

If newspapers believed national/international Web sites had any answer, you'd see people from ESPN, etc., being lured to CEO jobs at Gannett, etc. With few exceptions, newspapers are local businesses that run on local advertising. You're comparing apples to meatballs.

I'd be curious to know what ESPN.com's market penetration is by locale. My guess would be that while the overall numbers are high, on a market-by-market basis their audience is dwarfed by each local newspaper's. Newspapers freaked out in the 1980s when USA Today came along and while the overall circulation now looks pretty good at 2 million or so, it isn't that big of a factor in any local market:

http://www.usatoday.com/media_kit/usatoday/ai_regional_rates_regional_market_circulation.htm

ESPN and the like have grown pretty good businesses via a broad reach, but the idea that it's made a locally produced sports section irrelevant except for preps is a bit of an overstatement.

 

[kleeda]

Frank, good points on local vs. national advertising. Pour mor resources into securing and servicing online accounts? Not something my last shop did at all.
As for webizens being CEOs, get real. It would be like installing an anarchist as king. Hell, I'll bet a bunch of people in the industry still don't think we're "real journalists."

 

[WriteThinking]

If newspapers believed national/international Web sites had any answer, you'd see people from ESPN, etc., being lured to CEO jobs at Gannett, etc. With few exceptions, newspapers are local businesses that run on local advertising. You're comparing apples to meatballs.

I'd be curious to know what ESPN.com's market penetration is by locale. My guess would be that while the overall numbers are high, on a market-by-market basis their audience is dwarfed by each local newspaper's. Newspapers freaked out in the 1980s when USA Today came along and while the overall circulation now looks pretty good at 2 million or so, it isn't that big of a factor in any local market:

http://www.usatoday.com/media_kit/usatoday/ai_regional_rates_regional_market_circulation.htm

ESPN and the like have grown pretty good businesses via a broad reach, but the idea that it's made a locally produced sports section irrelevant except for preps is a bit of an overstatement.

Exactly.

Once newspapers get a web-based business model down, and, either go all-web, as everyone is predicting will eventually happen, or else, find ways to treat their print papers and web sites as the separate and different but equally valuable operations that they really are, and should be, ESPN.com won't be that much different than any other web site.

The national/broad take on things is great if that's what you're looking for, and personally, I love it. In terms of actually working on stories, I prefer it, even.

But, looking at it from a general reader's standpoint -- i.e. from/for particular areas and the regional news and points of view -- newspapers (and/or their web sites) in those respective regions are still the way to go. And they always will be.

That was why, in many cases, major metros established regional offices -- and local newspapers still survived, oftentimes even though they were in direct competition with the major metros.

Even with regional offices, the big papers' areas of coverage are still a little too big, encompassing, sometimes, hundreds of schools and square miles and many regions-within-regions. Those sections' staffs simply cannot be everywhere, all the time, or address all things to the satisfaction of all people.

That is why reporters for those outlets read the other area papers: to help them keep up with things. I imagine that's a large part of why kleeda reads a lot of sports news/sources, too.

Despite their size, resources and reach, the big metros -- and ESPN, too -- often are just following up on, and/or expanding on/broadening, some news/events based on information/content gleaned from local/regional sources.

The perspective/value of news sources is different, depending on the audience you are reaching, and that you're trying to reach.

And that's true whether you're talking about readers, or advertisers.

 

[kleeda]

I think I got us a little off track. The thread started off with the subject of whether or not to charge for content online. I'll go back to no. I don't think enough readers will see the value in it.

 

[lantaur]

To bring up two points:

1. Paying for the service, getting a subscription. I'll use two place I formerly lived. I lived in Florida, moved to Ohio. I want to keep track of news in Florida every now and again, but why in the hell would I want to pay for a subscription? If search engines have proven anything it's that readers come from all over, not just your backyard.

2. Your going to charge to see the paper ... and that is going to make it a sell to advertisers? How? By having less views?

3. People need to pay for information! Because we're the elitist newspapers up here in our ivory towers and we look down on the little people and tell them what to think. Hey, amazingly enough, all my life I've received information for free. It's called commercial TV and radio ... which is paid for by ... wait for it ... advertisers.

4. It's been said a million times over, and I'll beat that dead horse ... if the newspaper's information is so damn good then why are you only charging 50 cents? And why do cost increases only go up when the price of newsprint goes up? And how come when I put change into a newspaper machine I can grab as many copies as I want? Certainly if the information was that valuable then they'd limit me to one (you know, like happens when I want to buy a soda). Newspapers have always wanted you to read their information (and thus increase their ad revenue), and this is no different.

5. OK, now for the answer to solve all the problems ... there isn't one. Never will be. Things sort of evolve (or devolve). That's the way life always is.

Most people on this board are in the newspaper business or have been in the business. I'd say we value our product a lot more than people who aren't in the business. And guess what? Those are the people who newspapers (and other business, web sites, etc.) are targeting.

Hell, I wish there was an easy solution. Even though I am in the online world and have been for a number of year, I like newspapers. I grew up reading them. Problem is, that number dwindles with age groups.

Anyway, long answer is I agree with kleeda. And knowing who he is, that scares me tremendously.

 

[Andy _ Kent]

To bring up two points:

1. Paying for the service, getting a subscription. I'll use two place I formerly lived. I lived in Florida, moved to Ohio. I want to keep track of news in Florida every now and again, but why in the hell would I want to pay for a subscription? If search engines have proven anything it's that readers come from all over, not just your backyard.

2. Your going to charge to see the paper ... and that is going to make it a sell to advertisers? How? By having less views?

3. People need to pay for information! Because we're the elitist newspapers up here in our ivory towers and we look down on the little people and tell them what to think. Hey, amazingly enough, all my life I've received information for free. It's called commercial TV and radio ... which is paid for by ... wait for it ... advertisers.

4. It's been said a million times over, and I'll beat that dead horse ... if the newspaper's information is so damn good then why are you only charging 50 cents? And why do cost increases only go up when the price of newsprint goes up? And how come when I put change into a newspaper machine I can grab as many copies as I want? Certainly if the information was that valuable then they'd limit me to one (you know, like happens when I want to buy a soda). Newspapers have always wanted you to read their information (and thus increase their ad revenue), and this is no different.

5. OK, now for the answer to solve all the problems ... there isn't one. Never will be. Things sort of evolve (or devolve). That's the way life always is.

Most people on this board are in the newspaper business or have been in the business. I'd say we value our product a lot more than people who aren't in the business. And guess what? Those are the people who newspapers (and other business, web sites, etc.) are targeting.

Hell, I wish there was an easy solution. Even though I am in the online world and have been for a number of year, I like newspapers. I grew up reading them. Problem is, that number dwindles with age groups.

Anyway, long answer is I agree with kleeda. And knowing who he is, that scares me tremendously.

Well. that was a pretty depressing post -- but with some good points. I still think there might be some middle ground here, as I mentioned in my original post, and there are some examples already out there.

 

[playthrough]

I don't understand how papers could charge for online now that so many have cut staff, beats, etc. Who are they fooling? If a paper told its readers they were pumping tons of cash into the product, hiring new people, covering every inch of town (as opposed to asking "you, our readers, to send us your community news!") and then saying they must charge, then at least readers know they're getting a real product. Just the perception can go a long way.

Look at the Sporting News, about the only entity I read about on the board these days that's hiring (along with kleeda's outfit), and hiring a lot. I don't know what their plan is, but if it involves paying for the online product, I could justify giving it a shot because I see what they're putting into the business. Of course, I am in the business so maybe that's different. Joe Sixpack fan who gets all he needs off TV and the occasional web surf might be gone forever as far as we're concerned. He also might not, but it's worth finding out by going after him with both barrels. What passes for content in some places these days won't cut it.

 

[Frank_Ridgeway]

1. Paying for the service, getting a subscription. I'll use two place I formerly lived. I lived in Florida, moved to Ohio. I want to keep track of news in Florida every now and again, but why in the hell would I want to pay for a subscription? If search engines have proven anything it's that readers come from all over, not just your backyard.

The readers "from all over" are of zero value to local advertisers who compose the bulk of a newspaper's revenue. That's why over the past 25 years, most major metros have cut out-of-area delivery.

2. Your going to charge to see the paper ... and that is going to make it a sell to advertisers? How? By having less views?

By giving them what no one else can -- the largest local audience with reliably measureable demographics.

3. People need to pay for information! Because we're the elitist newspapers up here in our ivory towers and we look down on the little people and tell them what to think. Hey, amazingly enough, all my life I've received information for free. It's called commercial TV and radio ... which is paid for by ... wait for it ... advertisers.

TV and radio have much smaller news staffs than newspapers. You can't possibly be suggesting that anyone believes they offer a competitive news product. And their Web sites carry minimal advertising compared with newspaper Web sites:

http://www.naa.org/PressCenter/SearchPressReleases/2008/NEWSPAPER-OWNED-WEB-SITES-EARN-MORE-REVENUE.aspx

4. It's been said a million times over, and I'll beat that dead horse ... if the newspaper's information is so damn good then why are you only charging 50 cents? And why do cost increases only go up when the price of newsprint goes up? And how come when I put change into a newspaper machine I can grab as many copies as I want? Certainly if the information was that valuable then they'd limit me to one (you know, like happens when I want to buy a soda). Newspapers have always wanted you to read their information (and thus increase their ad revenue), and this is no different.

Newspapers traditionally have kept the price down due to competitive reasons. Gannett just announced that a handful of its papers are increasing the daily cover price to 75 cents -- those are in markets in which other newspapers are not easily available.

It's wrong to say increases in cover price are tied to newsprint prices -- that's the explanation given to customers, but not the reason. Newsprint prices fluctuate almost monthly; cover prices change about once every 15 years and the size of the increase is made according to coin combinations that are convenient for customers. While most newspapers buy newsprint on a month-to-month basis, some newspapers sign two-, three- or four-year contracts for a fixed price and thus are temporarily immune to the newsprint price increases. Yet they will raise their cover prices when nearby papers raise theirs.

Very few people have the need for more than one copy of the newspaper. The theft rate does not justify the expense of buying more complicated vending machines. Single-vend racks are available:

http://www.globalnewsvending.com/newspaper-vending-machine-single.html