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Summary:

When it comes to citing models for a future in which newspapers can charge for content, the Wall Street Journal often tops the list. But rig…

imageWhen it comes to citing models for a future in which newspapers can charge for content, the Wall Street Journal often tops the list. But right behind the WSJ is a paper with a much lower profile: the Arkansas Democrat-Gazette. The Democrat Gazette, which has been charging for content since 2001, is frequently mentioned as a paper that is truly transforming itself into a digital product — and making money at it.

But if this is the best example of getting users to pay for online content, the industry may want to look for yet another model. As Recovering Journalist Mark Potts noted earlier this week, in the past seven years, ArkansasOnline.com has only signed up 3,400 subscribers at $59 a year — or $5.95 a month, which also includes the Olive (ePaper) edition. And that adds up to just a little more than $200,000 annually from online subs — barely enough to make a dent in the paper’s $100 million in expenses.

More tellingly, perhaps: The paper itself says it’s not aiming to turn itself into a digital product at the earliest possible opportunity. The owner/publisher Walter Hussman Jr. says the goal is not to create an independent revenue stream that will support the online publication but rather to protect the print business. While the “latest news,” including local and national coverage, along with movie and restaurant reviews, is free, most of the items that appear in the paper are behind the paywall. Furthermore, even subscribers to both the print and online editions must pay an extra $1.95 to access articles more than seven days old.

ArkansasOnline does prove that readers are willing to pay for general news. But there are other reasons why the paper isn’t the national model to emulate. Little Rock’s population is older and broadband penetration is still low; it doesn’t have any significant metro competition (though Potts says Yelp and alt-weeklies are making in-roads into readership and advertisers); a lack of major sports franchises protects it from the ESPN’s and other websites offering free coverage online — how many city papers don’t have to worry about national competition even on sports?

The tactics the Arkansas Democrat Gazette have used to charge for content have influenced publishers like MediaNews Group, which issued a plan last week that was ostensibly designed to create two separate businesses for online and print. But, in fact, it, too, was mostly geared toward protecting the chain’s print products, as MediaNews Publisher Dean Singleton and President Jody Lodovic specifically stated in their joint memo.

And that makes sense, in a way: Traditional media, like print newspapers, still commands an overwhelming share of the ad dollars. (If the goal is to stop the bleeding on the print side — rather than speed up the seque into digital — the Arkansas Democrat Gazette can argue it is succeeding, since the print edition’s circulation has remained steady at roughly 180,000 papers a day (275,000 on Sunday) for the past few years, while that of most other papers has fallen, as the most recent figures from the Audit Bureau of Circulations has clearly shown.

The attraction newspaper publishers have to the Arkansas Democrat Gazette’s story is that it shows someone claiming success with a single strategy, namely, that if you stop giving it all away for free, the readers will respond positively. But that paper’s situation is as unique as Newsday, USA Today and Orlando Sun Sentinel are to one another. There are hundreds of other struggling local newspapers across the country that have more in common with a steel plant than those papers. Ultimately each newspaper company (or maybe even each newspaper) will have to demonstrate its own unique content proposition — whether it’s through aggregating hyperlocal bloggers or carving out a special niche among local sports or culture. Alas, there is no one-size-fits-all solution here.

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  1. Joel Whitaker Tuesday, May 26, 2009

    At the risk of getting dissed, it seems to me to be perfectly logical for a newspaper to protect its print product, which offers both local readers and advertisers huge advantages in many areas over online.

    Where the Arkansas model breaks down is for someone from out of town who wants to check on some local story but doesn't care enough to pay $4.95 to read one local story in Arkansas — even if it might involve someone they know.

    For local papers, there are two possible solutions. One is to have a system where you enter credit card info, and if your billing address is outside a paper's market area, you get in for free.

    The second would be to form a consortium that effectively works like Google, except you go through your local paper. It would work something like this: Paper A and Paper B put all their content behind a firewall. Paper A agrees that Paper B can have free access to the other's content, which is indexed on a Google-like page, and vice-versa. This binds the local reader to the local paper.

    The newspaper search engine could, as does Yahoo and Google, index blogs and other news sources that are available for free.

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