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Links of the Day (media edition):

– The main reason newspapers, including Gannett, are implementing paywalls is to shore up print revenue for as long as possible. Newspaper executives hope you won’t cancel your print subscription in favor of free online products.

The Wall Street Journal puts the strategy right out there. (Ironically, it’s a paywalled article.)

Executives say these efforts are less about adding digital subscribers than they are about eliminating readers’ incentive to ditch their print subscription for free alternatives online. In television, cable channels are trying to protect their business by giving online access to their programs only to subscribers who are cable or satellite-TV subscribers. The question with newspapers, however, is whether their paywalls are too little, too late after years of subscriber and advertising erosion.

But few readers are signing up. Newspaper executives don’t care, because any extra money is a good thing:

Many newspaper executives say the subscriber numbers are beside the point. Distributing news to online readers is much cheaper than delivering papers, so digital readers are inherently more profitable per capita, publishers say.

At the Star Tribune, the 14,000 people who are paying about $100 a year for a digital subscription to the paper are bringing about $1.4 million in annual revenue. Without printing and distribution costs, more of that revenue shows up in the bottom line, publisher Michael Klingensmith says.

Here’s why they will end up caring:

Yet in the broader context of the business, those figures hardly register. The Star Tribune in the six months through September had about 100,000 fewer weekday print subscribers than it did in the same period five years earlier. The current annual price of a daily print subscription is about $244.

The Star Tribune lost 100,000 print subscribers and replaced them with 14,000 digital subscribers. That’s not a good thing, no matter how you slice it.

The WSJ notes while it has success with a paywall, it’s a niche publication. It also points out the New York Times had 30 million monthly unique readers when it implemented its paywall.

– A new study on newspapers shows for every dollar gained in digital advertising, $7 is lost in print. And it’s no wonder. They’re still focused on print:

Among the papers that provided data, the number of print-focused sales representatives outnumbered digital-focused reps by about 3-1. A large majority of the newspapers sharing data with us reported that they had implemented a digital sales training program and had made it a priority to hire sales people with digital experience. But the sales force remains more focused on print, reflecting the fact that that print ad revenue, which is shrinking, still makes up the bulk of the overall revenue (on average 92% in our study’s sample).

If you want to sell digital advertising, you might want to hire more highly-trained digital sales people and demand performance. I suspect TV stations have this issue, as well.

– News wants to be free, writes Howard Owens of The Batavian. He started his online-only, free publication and is somehow making a living.

– Rochester independent radio station WGMC runs with the help of a mostly-volunteer staff.

– Could these devices put restaurant servers on the unemployment line?

4 Responses to Paywalls are About Print

  1. March 5, 2012 at 11:20 am Matthew responds:

    To me, this very much parallels the situation at Kodak. It’s not that management necessarily ‘missed’ the trends and shift to digital, it’s just that you have a very profitable existing business being quickly replaced with a much less profitable digital alternative. Newspapers need to find a way to avoid being run over by the digital train barreling at them.

    At their core, media companies need to produce compelling content that can’t be found for free elsewhere, regardless of the platform that it ultimately is viewed upon. No one is going to want to buy a subscription for rehashed AP Headlines or syndicated content that they can get anywhere. Local content, a unique editorial voice and enterprise journalism is what will get people to pay for subscriptions.

    As for advertising, media companies need to find creative ways to demonstrate their value to advertisers. It’s less about eyeballs and more about pay for performance. If you can demonstrate to advertisers how you will fill their restaurant/showroom/waiting rooms with customers, they will pay.

  2. March 5, 2012 at 11:42 am ben C. responds:

    You don’t need to necessarily hire digital sales people to figure out how to make digital advertising work. Because if you do, you will immediately be told that basing a newspaper’s sales fees on verifiable actual counted views of ads, click thrus and ultimate purchases instead of circulation stats, will not be taken to lightly by old guard print executives.

    Could just get a young kid to sign up for Amazon Associates program and sell Kindle Fire in the on-line page margins.

  3. March 5, 2012 at 5:42 pm johnvon responds:

    Can you really blame people like me for prefering the digital form of the paper? I stopped in at wegmans after church on Sunday and saw that the Sunday edition of the ny times was $9! Nytimes.com is free.

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