Wednesday, January 27, 2010

Here's What Salt Lake Tribune Publisher Dean Singleton May Get From His Proposed "Pay Wall"; Newsday Picks Up 35 Subscribers In Three Months

Concerned about declining subscription rates and net profits, a number of prominent publishers have publicly discussed the possibility of putting some or all of their website content behind a "pay wall", meaning the requirement of a paid subscription to access their websites. Among the media moguls considering this idea include Rupert Murdoch, Barry Diller, and Salt Lake Tribune publisher Dean Singleton, who wants to impose the pay wall concept throughout his entire MediaNews Group corporation (a complete list of all 54 of MediaNews Group's outlets is available HERE). Read previous posts about Singleton's intentions published May 13th, 2009; September 24th, 2009; and September 25th, 2009.

Perhaps they might want to reconsider the idea after Newsday's experience to date. On January 26th, 2010, the New York Observer reports that in the three-month period since Newsday placed the bulk of their content behind a pay wall, Newsday has convinced all of 35 subscribers to pay $5 a week, or $260 a year, to get unfettered access to the Newsday website, grossing an estimated $9,000. Website traffic has also plunged; in December 2009, the Newsday website had 1.5 million unique visits, a drop from 2.2 million in October. A rather poor return on a $4 million website redesign project.

That astoundingly low figure of new subscribers was revealed in a newsroom-wide meeting last week by publisher Terry Jimenez when a reporter asked how many people had signed up for the website. Mr. Jimenez didn't know the number off the top of his head, so he asked a deputy sitting near him. He replied "35". Nevertheless, Jimenez put a positive spin on the numbers, saying it's 35 more than he thought it would have been.

Newsday offers inducements to potential subscribers. Anyone who has a newspaper subscription is allowed unfettered free access; anyone who has Optimum Cable, which is owned by the Dolans and Cablevision, also gets it free. Newsday representatives claim that 75 percent of Long Island either has a subscription or Optimum Cable. But there are a host of other issues greasing the skids for Newsday's decline, including disputes on how to cover various targets, including the New York Knicks, refusal to run certain ads by competitors, and an evolving labor dispute triggered by the paper's plans to extract a 10 percent pay cut from all employees.

This does not mean the pay wall concept is a catastrophic failure that should be abandoned altogether. Some positive examples are given below:

(1). Wall Street Journal: Much of their content has disappeared behind a pay wall. But the prospective liabilities are offset by several advantages. First, they specialize in economic news. Second, they already acquired a reputation for success. And third, they have a well-heeled readership more favorably disposed towards paying for content.

(2). ESPN: They place their Insider reports behind a pay wall. However, this is the exception; the bulk of their content remains free.

(3). Ogden Standard-Examiner: They offer free content on their standard website and a paid subscription to their digital edition. Some content on the digital site does not appear on the standard website, or appears 24-48 hours before being posted on the standard website. The split concept appears to be a moneymaker for them.

The common denominator: These enterprises place only genuinely premium content behind a pay wall. In contrast, it appears Newsday has placed too much of their content behind the pay wall; every story starts out with only three or four lines, then directs you to the pay wall for the rest. A public accustomed to free content will not react favorably to such a radical change.

Dean Singleton does not propose to put all his content behind a pay wall. He's tried it only on a limited basis with the Denver Post, placing selected Denver Broncos stories behind a pay wall during football season. But Denver is only a one-newspaper town; Salt Lake, in contrast, also has the Deseret News, owned by the cash-flush Church of Jesus Christ of Latter-day Saints. If the Deseret News doesn't choose to follow the Tribune behind a pay wall, they could end up smoking the Tribune.

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