Newspaper Update

We were talking last Friday about this in my last sales meeting with the radio stations:

Local Dailies Can Charge for Online Content, But They Bring in Pennies

The newspaper industry has been suffering a long and painful decline, but the 1,390 U.S. local dailies hanging in there are dabbling in charging for online content. However, the revenue generated through subscription plans is not looking that impressive.

We commented a few months ago that Gannett might be on to something with the paid-content models on the websites of three of its local newspaper websites because they applied economic basics: high demand, low supply. Say your local daily has the most comprehensive (or perhaps the only) coverage of a university's athletic department -- diehard fans (alumni, parents) are likely willing to pay a fee.

A new study from the Missouri School of Journalism's Center for Advanced Social Research comprising 300 interviews with local dailies found that 46% of the newspapers surveyed with circulations of less than 25,000 charge for some online content, while 24% of newspapers with circulations above 25,000 do the same.

Of those that don't charge, 35% are drawing up paid-content plans and 50% are mulling online subscription options. Just 15% aren't considering charging for online content at all.

However, a third of the dailies with paid-content models believe the revenue from that source will contribute at most 20% of total digital revenue, with 10% expecting the subscription revenue to account for more. About 50% see only "a negligible contribution to the bottom line," the report says.

It gets worse: 85% of these local dailies said digital revenue accounts for less than 15% of their revenue; in the next three years, 60% expect it to be more than 15%.

So it seems paid-content models for regional publications can bring in revenue, but it's marginal at best -- and probably not enough to offset the massive decline in local print advertising.

(Source: Gavin Dunaway, Adotas, 06/03/11)

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