The Colonie Times Union is gleefully reporting that their biggest competitor has just signed their own death warrant:
SCHENECTADY — The Daily Gazette newspaper has decided to mostly end its experiment with free online content.
Web advertising revenue wasn’t enough to justify the perceived threat to its print publication, said Judy Patrick, the managing editor.
Starting Monday, the Schenectady paper will reserve the free section of its Web site for blogs, breaking news and some other features. Only paying subscribers, meanwhile, will have access to expanded online content, including articles that appear in the print edition.
Patrick announced the change to readers on Sunday. In an interview Tuesday, she said the newspaper concluded “it didn’t make a lot of sense” to continue to offer extensive free content because “the online revenue wasn’t happening.”
Anyone who thinks that online revenue is ever going to be able to cover the costs of running a dead tree media outlet is insane.
The Gazette’s move will be watched closely in a newspaper industry struggling with declining revenues and sagging circulation. Many in the business have questioned the wisdom of giving away online content, particularly as revenue from Web advertising typically accounts for less than 10 percent of overall revenues.
Few newspapers have rescinded free online content, analysts said, at least in recent months. The downside of doing so is that Web site traffic will significantly and quickly drop, impacting the newspaper’s overall visibility.
“It’s part of the brand of the paper, and it reaches people who might not be reached by the paper,” said Rick Edmonds, who analyses the media business for The Poynter Institute, a journalism school and think tank. “And a lot of people use both and go back and forth during the course of the day.”
Newspaper websites are more crucial to the dissemination of news then physical papers because they reach far more people. Reducing online content availability is suicide.
Several prominent newspapers, including The New York Times, have struggled with attempts to attract paid subscribers to Web sites. But newspaper analyst John Morton said some papers succeed with the strategy, including The Wall Street Journal and the Arkansas Democrat-Gazette.
There are three reasons the Wall Street Journal can get away with charging people to read its online content and the Gazette (and most newspapers, including the New York Times) can’t:
1) The WSJ has a specific focus on business news. The Gazette is a general newspaper with no focus.
2) The Journal caters to a wealthier-than-average clientele that can both afford to pay for information and doesn’t mind paying. The Gazette doesn’t target a rich demographic and couldn’t sustain itself focusing on them.
3) As the only national newspaper focusing on business news, the WSJ has a monopoly. There are seven other major daily newspapers in the Capital Region, each of which can easily replace the Gazette.
Patrick, in Schenectady, said protecting print publication circulation is a big part of the Gazette’s move, which will grant home delivery subscribers access to all the Web site’s content while offering an online-only subscription for $2.95 per week.
Reducing the content available online won’t encourage people to subscribe to the print paper; it’ll just drive them to the Gazette’s competitors, who are all probably salivating at this move.
The newspaper industry is quickly arriving at a fork in the road. They can either cling to their precious paper product and follow its Depends-dependent demographic straight into the grave, or they can choose to reorient their business models around the new online reality. The Times Union is the most forward-thinking paper in the Albany area in this regard. They’ve spent the past two years ramping up their online presence, namely by adding dozens of blogs on every subject from politics to college sports to animal rights. Some of them suck, but many don’t, and the overall effort has helped the paper stay viable when many of its competitors are teetering on the brink or collapsing entirely.
I commented on this Half Sigma post suggesting one way in which newspapers can reduce their operating costs:
One way the NYT could cut costs is to decentralize its operations.
In the age of the Internet, high-speed broadband, and Skype, there’s less of a need to have employees report to a central office every day. Reporters could as easily do their jobs from home, communicating with their bosses over the phone and Internet. With fewer people hanging around the office, less space is needed. It won’t make the Times profitable, but it will go a long way towards reducing their operating costs. It’s a solution that has worked for Talk 1300 in Albany so far:
http://albany.bizjournals.com/albany/stories/2008/06/30/smallb1.html
Talk 1300, for all its faults, is a great example of how to run an Old Media outlet in an Internet-centric world. Judy Patrick could stand to take a few tips from Paul Vandenburgh and his lackeys. Robert Stacy McCain agrees – here’s an excerpt from his report on the rise and fall of Culture11:
Kuo’s decision to hire a staff to report to a brick-and-mortar office was a foolish blunder. In case any Taki’s Magazine readers don’t realize it, the office from which Richard Spencer works is wherever he happens to log onto the Internet and access the software. He’s the only “staff,†and the rest of the contributors are paid a piece-rate. Whether or not the total output could be called “irresistibly interesting perspectives,†the total traffic exceeds anything Culture11 ever mustered, and for a fraction of the price.
The Gazette will probably abandon its experiment in the next couple of years when they discover that their online revenue has plummeted and their circulation is still falling – assuming that they’ll still be around then.
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The internet will kill off the newspapers. They all just reprint whatever is on the Ap wire, so it is not like they have any original content anyway. If any one news agency has a free internet presence, the rest are redundant.
The other thing local papers produce is local advertising. Classified ads and ads from local car dealers are a feature that both the consumer and advertizer want. net versions of those are a suppliment to the paper kind, but not a substitute.
The internet is also showing us that millions of people are willing to produce content for free. The value of the paid journalist is plummeting. The fact that so many paid journalists are producing such poor quality work does noting to endear the public to their profession.
I had a post about the slow death of the LA Times. A few highlights:
1. The LAT peaked in circulation in 1988, and declined thereafter, regularly, before the internet.
2. Much of the decline was terminal SWPL, trying to be NPR station KCRW (which is publicly funded, has lower operating costs, and pays nothing for it’s license). The White male and conservative (socially anyway) readership was alienated for alternatively, SWPL yuppiedom (though it was of course called something else then) and La Raza rah-rah (Mexicans read spanish-language papers if they read them at all).
3. Content sucked. Classic sports guys like Jim Murray and even Scot Ostler were replaced by hacks like J. A. Adande and the guy who got a sex change operation (which was heralded and celebrated all over the sports pages for weeks). Yes, one of their chief sports guys was a trans-sexual.
4. Local news and content was ignored in favor of NYT style coverage of stuff of little to no interest to LA readers: stuff happening in NYC’s social elite, etc. Columnists who appealed to older White readers like Jack Smith were steadily replaced by uber-liberal hacks and the film reviews in particular were a Marxist tirade by reviewers like Carina Chocano (with obligatory La Raza rah-rah stuff also).
None of this was related to the internet, which made bad situations worse, but the core problem for the LAT was it ignored it’s core readers who simply stopped reading.
Read your article when you posted it. I don’t dispute your points, but the LA Times is just one newspaper. The newspapers here in the Capital District haven’t been alienating their core consumers – given that we have eight dailies in this area, no single one can pull nonsense like having a tranny sports columnist (it still amuses me that someone at the LA Times thought that was a good idea) and expect to survive. And there aren’t enough SWPLs in this area to sustain an Asian fusion food restaurant, let alone a newspaper. No Mexicans either, aside from the occasional illegals smuggled in to clean the racetrack stables in Saratoga every horse-racing season. Each of the local papers does an adequate job of covering their specific areas – I take issue with a couple of them constantly sucking up to the establishment, but the idiots who live here don’t seem to mind. However, the papers here are hurting like everyone else due to the rise of the internet. I’m positive there are plenty of quality papers in the rest of the country that are suffering the same fate. A sinking tide beaches all boats.
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