Paid content VPA 2013

University of Missouri Missouri School of Journalism
PAID ONLINE CONTENT
Trends, best practices and strategies that fit
Virginia Press Association
April 19, 2013
Presented by Brian Steffens
Reynolds Journalism Institute
Missouri School of Journalism

3 THINGS
YOU NEED TO KNOW

1. HALF the country’s
dailies are now charging
Paid content is no longer a trend.
It’s a movement.

Half the country’s dailies now charge
•  An RJI survey
of 458 daily
publishers last
summer
showed that
47 percent
were requiring
online users to
pay
Source: 2012 RJI Publishers Confidence Index

Half the country’s dailies now charge
Since then, the
numbers have
climbed to a
tipping point.
Around 650
dailies are now
charging, and
many more have
announced plans
to charge.
Source: 2012 RJI Publishers Confidence Index

Smaller papers have led the way
• 59% of dailies under 5,000 circulation
• 53% of dailies between 5,001 and 10,000
• 46% of dailies between 10,000 and 50,000
• 26% of dailies with circulation over 50,000

Groups have seen the light
•  Gannett: 71 of its dailies
•  McClatchy
•  Tribune
•  Media General
•  Lee
•  Cox
•  Scripps
•  Morris
•  Dow Jones
•  Media News-Digital First
•  Gatehouse
•  Schurz
•  Swift
•  Wick
•  Pioneer
•  New York Times

Why this matters to the industry
• Basic economics: Supply and demand
• Widespread paid content is bringing a badly
needed scarcity to a glut of news
• It straightens out an illogical business model

Why this matters to the industry
It makes an important statement:
Your content has value
regardless of platform.

2. Reduced page views
don’t hurt revenues
Sites have so much unsold inventory, the only
losses in ad sales are pennies in remnant banners.

When paywalls go up
• Page view declines range between 5-40 percent
• Most sites have an inventory glut — many more
page views than needed to present paid ads
• Only remnant and “value added” avails are lost
• Paid content quickly covers any lost ad revenue
• I know of no site that’s seen a net revenue loss,
even those seeing 40 percent fewer page views

3. Your loyal readers will
support your efforts to charge
They want you to succeed.

They want you to survive and thrive
• Loyal readers are the biggest supporters of paid
online content, even in markets where they are
asked to pay more for access to online news.
• In Cape Girardeau: Less than 2 percent of home
delivery subscribers opted out. Yet less than 40
percent established digital accounts!

4 BENEFITS
OF A PAID MODEL

New revenue: Straight to the bottom line
• Revenue increases will depend on market size
and pricing
• It’s no silver bullet
• Case studies show how pricing affects revenue

Your site becomes more valuable
to your advertisers
• More local, more quantifiable
• You know who your customers are and what
they’re seeing on your site.

Quality of reader comments improves
A longtime reader told Andy Waters after the
Columbia Daily Tribune launched its paid model:
“Thank you for cleaning up the comments!”

Online users are no longer freeloaders.
They’re customers.

2 DISADVANTAGES
OF A PAID MODEL

1. Your online users are no longer
freeloaders — they’re customers
Up until now, if they had a complaint, making
them happy might not have been your highest
priority.
After all, you were giving it all away for free.
Now, they’re paying customers.

2. You’ll hear some negative
comments when you launch
• Expect story commenters to object
• The wave of opposition will be loud — but thin
and short-lived
• Plan in advance to counteract it
•  Thoughtful explanation to readers
•  Sustained marketing effort
•  Focus on your value proposition

2 CASE STUDIES
• Columbia Daily Tribune
• Augusta Chronicle

• 20,000 average weekday circulation
• Ownership: Family
• Launched December, 2010
• Metered model
• Built it in-house

ColumbiaTribune.com
launched paid content
on Dec. 1, 2010.
•  Advertising-only model
was not generating
revenue growth
•  Wanted to eliminate
incentive to stop buying
print edition
•  New revenue stream

•  Metered model – 10 free/mo.
•  Online-only: $8/mo.
•  Print subscribers: $1.50/mo.
•  Premium: All local content
(photos, video, news, sports,
blogs, obits, etc.)
•  Free: Everything else (section
fronts, wire, weather,
contests, classifieds, etc.)
•  Only subscribers can
comment
How does it work?

•  3,000,000 PVs/mo (still most popular in market)
•  Total unique visitors up; local audience up 7%
•  More than 9,500 paying – 60% conversion to
bundle
•  Local advertising unaffected – Non-issue for
advertisers
•  In first month, subscription revenue three times
lost ad revenue
•  Few objections from readers – Quality journalism
at stake
One year after launch

• 55,000 average weekday circulation
• Ownership: Morris
• Launched December, 2010
• Metered model
• Thoughtful strategy, methodical rollout

Core belief: Placing a value on the content is more important than
any penny we’ll collect.
Strategy: Put toe in the paid-content water to learn. Set stage for
mobile/app paid content strategy. Use flexibility of model to experiment.
Start up: Introduction of page threshold phases in December 2010.
Rollout: Lots of communication with the market.
A thoughtful, deliberate rollout

• An editor’s column
• A publisher’s column
• Online FAQ
• Anonymous comment interaction
• Media response and comment
• Phone calls
• Newsroom mindset: Let’s give ’em something
worth paying for
A thoughtful, deliberate rollout

We go beyond the button-pushing journalism
some bloggers and copycat online sites offer.
From Editor Alan English’s column:
“How much would you pay to have your favorite
journalist or columnist watchdogging City Hall?
Would you buy him or her a cup of coffee each
month?”
What the Chronicle told readers

“The value goes beyond access. You support the
local journalism that includes:
•  Bio-testing local waterways, revealing problems and
getting them attention.
•  Battling for public records.
•  Celebrating local heroes and honoring fallen soldiers.
•  Checking the safety of your roadways and bridges.
What Alan English told readers

•  Reviewing policies and hiring practices at city hall.
•  Raising awareness and donations for breast cancer.
•  Championing better government.
•  Leading coverage of ASU's national championship.
•  Convening a roundtable of local health care CEOs to
learn the impact of reforms.
•  Rallying charitable giving at Christmastime.
What Alan English told readers

“Who else does this as often
as your local newspaper?”
Editor Alan English asked readers:

7 RECOMMENDATIONS

1. Make your site worth paying for
Charging generates revenue to help pay
for journalism, but you now have to make
your digital edition good enough to expect
readers to actually pay for it.

1. Make your site worth paying for
This means:
• Your site needs to work.
• It looks like it was put together with a
modicum of care.
• You’ve added value to the content.

Product differentiation
Product differentiation
• Your site should be different from your
print edition.
• Play to the strengths of digital: add value
that only digital allows you to add

What this means
• Deeper, richer stories: documents & data
• Sight, sound & motion
• Context
• Interactivity
• Links to archived content
• Engagement/community

2. Go with “opt out,” not “opt in”
Give print subscribers the option of not
choosing a digital membership — but
assume they will want to do so.

3. Choose a meter over a hard wall

3. Choose a meter over a hard wall
• Keep your site search-engine friendly
• Encourage discovery
• Some see value in a porous “wall”

3. but keep your meter tight
• Most early adapters started loose and began
to tighten
• The Augusta Chronicle began by giving
everyone a free buffer of 100 views
• Within 6 months, they’d tightened it to 10

3. but keep your meter tight
0
5
10
15
20
25
30
35
Less
than 5
5 10 15 20 25 and
up
Surveyed dailies’
monthly meter settings
Free stories per 30 days
Percentofpapers

4. What to keep inside / outside the wall
OPEN ACCESS:
• Breaking News
• Section fronts
• Wire
• “Commodity news”
• Weather
• Contests
• Classifieds
RESTRICT ACCESS:
• Unique local content
• News
• Sports
• Photos
• Obits
• Ability to comment

It is possible to charge too little.
Don’t be afraid to ask readers to pay.
5. Don’t be afraid to ask for real money

It’s time to take a different approach with
your online subscribers. Begin to set
expectations by conditioning digital
subscribers to feel they are members, not
just paying customers.
6. Membership has its privileges

• Content
• Pricing
• Promotion
• Customer service
7. Develop your own
customer acquisition strategies

Brian Steffens
Reynolds Journalism Institute
steffensb@rjionline.org
Mike Jenner
RJI/Missouri School of Journalism
jennerm@missouri.edu
Cell: (573) 808-4785

Paid content VPA 2013

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