JI to Charge for Online News Content

The Journal-Inquirer announced today that starting tomorrow, they will be charging non-subscribers to access news content on their site.

“As with most newspapers,” JI Publisher Elizabeth S. Ellis said today, “advertising on our Internet site has not yet begun to pay anything close to the expense of providing the news to our readers, even as providing the news on the Internet for free threatens to erode the paid circulation that does support the paper. “Some newspapers in Connecticut have drastically reduced their local and state news reporting,” the publisher said. “The JI will not do this. Newspapers are crucial to community. Without newspaper reporting, impartial and comprehensive, communities disintegrate. But news gathering costs money, and those costs have to be recovered.”

I do completely understand why they’re making this move, and I applaud the JI’s commitment to local news. I rely heavily on that paper to find out what’s happening in Enfield.

However, I worry that an online subscription model will drive readers away from the JI’s website, and the end result will be something like the Chronicle in Willimantic.

What’s that? You didn’t know there was a newspaper called the Chronicle in Willimantic? …Well, maybe that’s part of the reason why.

I look forward to seeing how the JI institutes pricing, but I’m a little nervous.

[poll id=”17″]

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19 responses to “JI to Charge for Online News Content

  1. If the New York Times couldn’t pull it off I don’t see how a local paper can. I used to read the Times opinion page religiously but I stopped the moment they started charging for content. There’s too much of an expectation that information will be free on the internet – they need to find an ad subsidized model.

    However, I will point out that the Wall Street Journal does seem to have a successful subscription based online service. Curious to hear what people think on why they’ve succeeded where the Times failed.

    I know I’m eligible to receive an online subscription at substantially discounted rate due to the fact that I’m a WSJ print subscriber. Perhaps that’s something for other papers to look into.

  2. “advertising on our Internet site has not yet begun to pay anything close to the expense of providing the news to our readers, even as providing the news on the Internet for free threatens to erode the paid circulation that does support the paper.

    Clearly a case of too many people looking at their advertisements.

  3. Other than Keith Phaneuf…who is very good, there is not much worth reading. Burris writes the same sloppy editorials every day. They pick and choose their AP stories based on politics….leave many AP stories out of the paper as well..based on politics.

  4. Only left wing liberals believe the fantasy you can get something for nothing. If it’s worth reading it should be worth paying for, and in any event someone has to pay the reporter, right?

    The WSJ can charge because the information it provides has value to people. Apparently the NY times does not.

  5. The industry has apparently accumulated enough data to evaluate its options.
    Excerpt:

    Many newspaper publishers now believe they can stop the hemorrhaging by charging for at least some of the material on their Web sites instead of giving it away. Besides raising more revenue online, Internet subscriptions could persuade more readers to keep paying for print editions—which yield more ad revenue.

    Worth reading. Brill is a news entrepreneur who has landed successful ventures you’ve heard of.

    Also, the WSJ has apparently figured things out (at least so far), not that this means that their approach will work for anybody else. But I’ve been a subscriber in one form or another for many years, and have always paid for the online access, whether I was taking delivery of the paper or not. I went online there last night, and they are producing some pretty state of the art video journalism – good content, substantive presenters, good editing and production values.

  6. If you write an article no one reads, are you still relevant to your community?

    I worked in the newspaper industry, and still love the business. But I didn’t read my local newspapers regularly for years before they were online, and if it was something I had to pay for…I wouldn’t again. The AM call in show out here and the weekly free paper would suffice. I’d would be a somewhat less informed citizen, but in things that really matter…not that much less informed.

    I *could* see papers working to develop a better demographic profile of their readers using a combination of registration and data mining, and aggregating that up to a national advertising network to target the right ads to the right viewers.

    I’ve worked with people who, before the collapse started, were working on highly specific zoning where inserts would vary by street…and eventually even change ads within the printed paper at premium locations (one neighborhood gets the Chevy dealership ad, another Buick, and a third has the BMW ad). With the overall collapse, the ability to invest in such mass customization was put on hold.

    Most newspapers fundamental financial problem isn’t a lack of advertisers or subscribers.

    It’s the debt load they’re carrying. They need to go through bankruptcy, dump the debt, and reorganize it. New York Times recently told the Globe they wanted extraordinary union concessions or they would close the paper…and I know enough about the Globe to say the grey lady isn’t bluffing. That paper fundamentally needs to come to reality with their business model or be euthanized. (Latest numbers I’ve seen is the Globe is losing $50M/year with a potential sale price well under $200M. At some point, you just cut your losses. NYT overall is losing $60M so the Globe alone is the sucking chest wound that is bleeding 80% of that )

  7. To add to my last…

    The reason I don’t believe it’s a bluff is the only reasonable alternative is bankruptcy. And with bankruptcy the Schulzbergers will lose their voting control over the Times. They’ll kill the Globe long before they let that happen.

  8. Hi there… Just thought I’d share some thoughts since I’ve been involved in the transition process over at the JI where I am one of the editors. It wasn’t a decision we made lightly or without a lot of frank discussion. But in the end this is actually a pretty simple problem.

    We produce a print product and charge people 75 cents a day to buy it. That print product raises the advertising revenue that covers the bulk of our costs. We’ve been producing a copy of that product online for several years and giving it away for free, and we’re seeing our print circulation drop.

    Here’s he rub: Online advertising revenue does not and cannot offset the losses generated from giving the product away for free online. Further, as the economy has tanked and economic activity has ceased in many sectors, our print edition has struggled to bring in ad revenue on its own anyway. Print is supposed to operate with 80 percent ad revenue and 20 percent subscriber revenue. I don’t know what the ratio is now, but it wouldn’t surprise me if it was 50/50, and remember circulation is down.

    A lot of folks might argue that “the Courant is doing it successfully.”

    Well… I don’t think it is. I have friends and colleagues there and I am told that the Courant’s online profits are rising and print profits are declining at the same “ratio.” I don’t know the actual numbers, but here’s an example of what that means if the ratio is 15 percent:

    If I made $100,000 online last year, I brought in $115,000 in the new year.

    Meanwhile, I made $20 million in print last year, and that would now dropped to $17 million.

    See the problem? The two business models compete. You simply can’t do both without charging people for access. If you deliver the content without the ads, or with ads that don’t make nearly as much as they do in print, you’re killing yourself slowly. The for-profit news model is married to the delivery of advertising. Deliver the news without the ads, and you will fail.

    So at the JI we’re doing the job of covering our towns and state government and UConn sports and everything else with less, but we’re maintaining the paper’s mission. We’re watching our numbers closely as we proceed.

    One thing I can tell you is that in the 48 hours following the transition this week we received dozens of comments, mostly negative, from people who didn’t really value our product anyway. They sure seemed to want to visit the site. It’s the nature of the web to allow people to grow accustomed to clicking unhindered anywhere they want, but it’s not my nature as a journalist to work for free.

    So yeah, we’ve caught some complaints. But during that same time 48-hour period after putting up the pay-wall we picked up quite a few new subscribers — including people who’d canceled a few years ago because they could get our stories for free online.

    Can people get news elsewhere? Sure. But it won’t be the local news about their school board or town council or the latest thing happening at the town green. Why? Because the JI is the newspaper that actually pays a person to show up and take notes.

    -doug

    p.s. Chris thanks for reading the JI, addressing this topic, and posting the poll!

  9. AndersonScooper

    A local paper should be:

    1) Worth reading, and

    2) Something that community members are proud of, and happy to subscribe to.

    I still find it incredulous that I no longer have to pay $20-30/month to read the NY Times. Who was the idiot who thought it a good idea to give the product away for free?

  10. Who was the idiot who thought it a good idea to give the product away for free?

    Someone that it’s true value, of course!

  11. One thing I can tell you is that in the 48 hours following the transition this week we received dozens of comments, mostly negative, from people who didn’t really value our product anyway. They sure seemed to want to visit the site.

    Reminds me of the old joke about the couple who stop in at a roadside diner:
    Wife: “The food here is terrible!”
    Husband: “Yeah, and the portions are so small!”

  12. One thing I can tell you is that in the 48 hours following the transition this week we received dozens of comments, mostly negative, from people who didn’t really value our product anyway. They sure seemed to want to visit the site.

    Chris, do you know why the Hour gave up their ages-old “pay for online content” scheme? They had it forever, so I wonder what they learned that the Journal-Inquirer doesn’t know (or alternately, what the JI knows that the Hour is about to find out.)

    Doug, I’m curious if your paper’s reach as an advocacy organization was factored into the decision you made. An editorial that you write on the impact of a particular bill in the legislature would have previously been read and circulated among the bill’s sponsors — now, they will no longer hear any input from your part of the state. Similarly, other newspapers, network news, and bloggers take their cues about what’s relevant by scanning through the day’s news at a dozen or more local websites — now, stories that start in your paper are less likely to spread to other parts of the state.

  13. Doug, one other thing jumped out at me from your comment that I wanted to address. I value your product — but I don’t value every piece of it. It’s a strange thing that the news I want to read only comes in a package with the wedding section, movie reviews, high school sports, classifieds, comics, weather, police and fire reports and everything else, all of which is either irrelevant to me or duplicated in dozens of outlets printed closer to my home.

    So instead of trying to get 5 or 10 cents out of me for 2% of what goes into the daily paper, you want to charge me $1.75 for a product that I find 98% useless.

    Furthermore, you want me to pay 3 times the cost of an entire, actual printed newspaper for an article when, at the time of purchase, I can’t tell whether or not it features any original reporting whatsoever. Maybe that Courtney fundraising article is the same AP piece I saw in the Courant. Maybe it’s more or less a straight campaign press release with an “on the other hand” quote from Chris Healy tossed in for flavor. Or maybe it’s going to provide some genuine insight, after some reporter tracked down a key player and asked some hard questions for the benefit of your readers. On the newsstand, I could scope it out before paying my 50 cents. But I’m sure not curious enough to pay $1.75 to see what kind of story it is outside your circulation area.

    I guess what I’m trying to say is — don’t be so quick to dismiss your readers as being unappreciative of quality journalism… consider for a moment that you might not be selling what those readers want to buy at a fair price.

  14. So instead of trying to get 5 or 10 cents out of me for 2% of what goes into the daily paper, you want to charge me $1.75 for a product that I find 98% useless.

    BINGO!

    I get very little news from newspapers as I simply don’t trust most of them anymore than moveon.org.

    The JI & Conn Post however don’t fall into the same mold, employing superior restraint in keeping any lean or political bent out of news stories.

    The relatively tiny Record-Journal has been messing around with paid online nonsense and it seems to be a flop in that their news articles fail to show up in search engine news scans.

    I would think that would kill a paper faster than anything else.

    Papers are losing revenue from their previously reliable sources such as car dealers, in some cases due not only to the `net or current economic conditions; but at least in the Courant’s case due to their horrific pricing structure and *incredibly* snotty attitude.

    Connecticut car dealers that had used the Courant for years, have been thrilled to avail themselves of alternative marketing vehicles as often as not due to the shoddy treatment they received from that firm.

  15. Lot’s of questions … thanks for asking and commenting all of you.

    Anderson I don’t know who’s idea it was in the beginning, but it’s worth noting that almost ever for-profit newspaper is very much “subsidized” by advertising. Even at 75 cents for a print copy or $1.75 for 24 hours online we aren’t charging anywhere near the cost f reporting and compiling and 8delivering the news. But market conditions probably went into the discussion about that free online model back 15 years ago. Remember that there were far fewer people willing to punch in a credit card number online back then, and there was the similar belief that online advertising was “the future.”

    Why not put all the same ads online? Well the easiest way to do that is to use the pdf model, where people get to see the actual news page. But most folks don’t like to read that way online — often you have to scroll left to right, etc. So most papers have avoided it. But frankly, not being able to deliver all those print ads online means we can’t count online subscribers as home delivery customers under the ABC audit bureau, whose data provides a baseline to advertisers.

    Chris MC that’s a great example …

    Matt W… I’m not familiar with the Norwalk Hour’s decision but I don’t think every newspaper’s situation is the same on this. I don’t know what kind of competition they’re getting or which papers overlap into their circulation area. Our entire circulation area falls within the Courant’s “core” zone but they simply don’t cover the towns in JI-land anymore. So that aspect of our product is now unique. We also are one of the few papers left that still sends reporters to the state Capitol on a regular basis and that might be the reason we’re suddenly getting online subscribers from outside of our towns.

    On advocacy, that kind of falls out of my area. I design print pages and we handle the Web site by committee. But Chris Powell, the managing editor, certainly advocates for a variety of issues, including unfettered access to public information and against cross-ownership of media entities to keep fairness in the market. On the latter issue we’ve taken the Courant to court as well. Powell of course also has advocated for and against quite a few social and entitlement-related issues, but those are his opinions and not those of the newspaper. If that advocacy does play into our decision-making at all, it wasn’t enough to stop us from putting up the pay wall. But it’s still playing out in the discussions over which content remains free online. By the way… if you check the site you’ll find that he’s winning that argument at the moment in terms of his own columns… 😉

    Are legislators seeing the coverage? Yes. Some new subscribers at the LOB came through last week and I saw at least one local politician become a subscriber again. He’d canceled two years ago because he could read everything online.

    Matt, there certainly is a weird conflict between customers who claim we’re not worth paying for, but who still post repeated enraged messages that we’d dare to charge them for our services. I actually argued quite a bit that we needed to be concerned with this kind of backlash because it was the JI that acclimated those people to reading the site for free.

    But in the end there is simply no online revenue coming in. If that’s our failure, then it’s on us. But it is what it is, and it means that those now-enraged online readers weren’t helping us anyway in terms of our bottom line. They certainly weren’t clicking on the ads.

    If we get some of them to subscribe and we somehow turn the site into a model that does count in our ABC audit, then it might help maintain the organization rather than detract. At the minimum, we need to level off in terms of our print circulation and this is a step in the right direction. Last thing on that, and this didn’t come up in our discussions but I’ll share it here … anonymous comments are a time-consuming liability anyway.

    Last thing for ACR and Matt W — the bundled vs. a la carte pricing issue…

    We priced it so that people would see that the cheapest way to go is to simply subscribe to the print edition to get full access to everything online. This is to ensure that our advertisers continue to get the value of the maximum number of people seeing their messages.

    The 75 cents and $1.75 really aren’t very much considering what we give you — firsthand information from events happening around the world, boiled down into easy-to-understand language with the most urgent information presented first. Yes, a lot of the wire stuff is available elsewhere, but I’m sure you’ve all sat through a few mind-numbing town meetings in your day, haven’t you? We’re doing it for you. You can’t put a price on that! 😀

    Essentially you’re paying for the editing. We cull the key facts from the pile of information out there every day. There’s too much for anyone one person to digest. Considering the amount of information in a paper each day, the price a newspaper is one of the greatest bargains ever offered in any marketplace. The .75 cents or online $1.75 on their own don’t cover the cost of giving you just the articles from Keith Phaneuf, or just Don Michak, or just Phil Chardis, or just Keith Burris, or any other single part of our organization. Even with a for-profit model like the JI, you’re investing in your community by paying that low price.

    Online, there’s this impression that everything should be available at the click of a mouse and you shouldn’t have to pay for something you don’t want. I get that. I don’t agree with it so much, but it is the prevailing wisdom. However the pricing structure for the JI and just about every other newspaper already is set at the lowest level in favor of the highest “volume” of transactions, rather than a higher price for a specialized coverage “niche.”

    Like I said before, we’re already leaning much more heavily on subscription revenue than we should. Could we remove our least-read section to save money? Probably… but it probably wouldn’t mean we could or would lower the price, either. And then you’d see another thread of complaints from people who want their paper to keep offering a mixture of information that still includes the recipes, or the Nation/World section, or Dear Abby, or whatever it was we cut.

    Hopefully I’ve covered everything. Thanks guys for asking and also for not teeing off on us out here. For all its faults the JI still is playing a really important role in the communities it covers. Feedback is always welcome and you can all email me any time or buzz me at the paper. It’s dhardy at journalinquirer.com.

  16. If we get some of them to subscribe and we somehow turn the site into a model that does count in our ABC audit, then it might help maintain the organization rather than detract. At the minimum, we need to level off in terms of our print circulation and this is a step in the right direction. Last thing on that, and this didn’t come up in our discussions but I’ll share it here … anonymous comments are a time-consuming liability anyway.

    I noticed that an “online only” subscription doesn’t cost less, because you’re still printing a copy and sending it to a school someplace. Seeing that, I assumed that the circulation statistics were of primary importance to you.

    In any case, thanks for the detailed feedback. I’m sorry that I won’t be able to see what’s going on in your part of the state anymore, but that’s obviously not the end of the world for me or for you. Best of luck on your new approach.

  17. Online, there’s this impression that everything should be available at the click of a mouse and you shouldn’t have to pay for something you don’t want. I get that. I don’t agree with it so much, but it is the prevailing wisdom. However the pricing structure for the JI and just about every other newspaper already is set at the lowest level in favor of the highest “volume” of transactions, rather than a higher price for a specialized coverage “niche.”

    Just one thing to add — Salon.com sells ad-free subscriptions to their website, and also makes their content available for readers who view a single interactive ad (usually for 15-30 seconds). They make 2/3 of their revenue through the ads, generating an average of 6-7 cents per visitor per day. They make it explicit that the advertisement is sponsoring the content that the visitor wants, which gets them a ~10% click-through to the advertiser’s site.

    Just pointing out that there are different models being developed out there.

    It’s hard to answer, from the middle of a complicated news-gathering-and-disseminating operation, what the value is of a single article to a single viewer who doesn’t want your whole paper. And you can ask that question from a local side — if I lived in Manchester, it’s not clear to me why I should prefer an expensive daily covering 17 towns to a weekly or even a blog that covered just my hometown. (See examples down my way here and here.)

    I know that it’s hard to re-engineer a vehicle that a) you’re a passenger on and b) is constantly in motion. But, to extend that metaphor a little, it seems to me that you guys are in a middle range — making the SUVs of news — while others are developing mass transit and zippy little electric cars just off to the side. It’s not at all clear to me that building fortifications around the business model you currently have is going to serve you well going forwards. I hope it’s clear that I don’t say that with any ill will, but I think we can all agree that it’s a perilous time to be running a newspaper — and the JI just made a pretty big bet on the ink-and-paper model.

  18. Yes, all good points. I’ll could quibble with you over the meaning of “expensive,” but I won’t. I’ll try to get a look at the salon model. It seems interesting and likely would require some investment on our end to build the capability.

    In terms of the big bet on print… that’s also true. Realistically, there is no JI without print. But there’s no reason to think the JI is going under, either. The JI is not carrying any debt to speak of… No massive marker to cover every quarter. It makes sense to focus on our most profitable product, but time will tell.

  19. I see where you’re going with the auto analogy but I just don’t see a transition to an online-only production model for the JI, or the absolute need to do so. I like the analogy but we’re not facing the same kind of problem you’re talking about in the auto industry, mainly because the price of our product is simply dirt cheap. It’s just not that expensive, particularly when you consider the cost of investing in a home — homeowners are our customer base. Labor also is dirt cheap. There are no pensioners to support…

    The demand for our product has shrunk to some extent but we’re still the only entity providing it. When/if that changes then I’ll grant you that it might be time to shut down whole departments at the JI and cut ourselves down to an online-only product with a handful of reporters and one editor or something apocalyptic like that. But we’re not there yet, fortunately.

    Just because we’re not an Internet juggernaut doesn’t mean we can’t make it … we still deliver relevant news in print. But you’re right… I’m along for the ride and holding on for dear life!

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