Paid content VPA 2013

transcript

University of Missouri Missouri School of Journalism

PAID ONLINE CONTENT Trends, best practices and strategies that fit

Virginia Press Association April 19, 2013

Presented by Brian Steffens

Reynolds Journalism Institute Missouri School of Journalism

3 THINGS YOU NEED TO KNOW

1. HALF the country’s dailies are now charging Paid content is no longer a trend. It’s a movement.

Half the country’s dailies now charge • An RJI survey

of 458 daily publishers last summer showed that 47 percent were requiring online users to pay

Source: 2012 RJI Publishers Confidence Index

Half the country’s dailies now charge Since then, the numbers have climbed to a tipping point. Around 650 dailies are now charging, and many more have announced plans to charge.

Source: 2012 RJI Publishers Confidence Index

Smaller papers have led the way • 59% of dailies under 5,000 circulation • 53% of dailies between 5,001 and 10,000 • 46% of dailies between 10,000 and 50,000 • 26% of dailies with circulation over 50,000

Groups have seen the light • Gannett: 71 of its dailies • McClatchy •  Tribune • Media General •  Lee • Cox • Scripps • Morris

• Dow Jones • Media News-Digital First • Gatehouse • Schurz • Swift • Wick • Pioneer • New York Times

Why this matters to the industry • Basic economics: Supply and demand • Widespread paid content is bringing a badly needed scarcity to a glut of news

•  It straightens out an illogical business model

Why this matters to the industry It makes an important statement:

Your content has value regardless of platform.

2. Reduced page views don’t hurt revenues Sites have so much unsold inventory, the only losses in ad sales are pennies in remnant banners.

When paywalls go up • Page view declines range between 5-40 percent • Most sites have an inventory glut — many more page views than needed to present paid ads

• Only remnant and “value added” avails are lost • Paid content quickly covers any lost ad revenue • I know of no site that’s seen a net revenue loss, even those seeing 40 percent fewer page views

3. Your loyal readers will support your efforts to charge They want you to succeed.

They want you to survive and thrive • Loyal readers are the biggest supporters of paid online content, even in markets where they are asked to pay more for access to online news.

•  In Cape Girardeau: Less than 2 percent of home delivery subscribers opted out. Yet less than 40 percent established digital accounts!

4 BENEFITS OF A PAID MODEL

New revenue: Straight to the bottom line

• Revenue increases will depend on market size and pricing

•  It’s no silver bullet • Case studies show how pricing affects revenue

Your site becomes more valuable to your advertisers

• More local, more quantifiable • You know who your customers are and what they’re seeing on your site.

Quality of reader comments improves

A longtime reader told Andy Waters after the Columbia Daily Tribune launched its paid model: “Thank you for cleaning up the comments!”

Online users are no longer freeloaders.

They’re customers.

2 DISADVANTAGES OF A PAID MODEL

1. Your online users are no longer freeloaders — they’re customers

Up until now, if they had a complaint, making them happy might not have been your highest priority. After all, you were giving it all away for free. Now, they’re paying customers.

2. You’ll hear some negative comments when you launch

• Expect story commenters to object • The wave of opposition will be loud — but thin and short-lived

• Plan in advance to counteract it •  Thoughtful explanation to readers • Sustained marketing effort •  Focus on your value proposition

2 CASE STUDIES • Columbia Daily Tribune • Augusta Chronicle

• 20,000 average weekday circulation • Ownership: Family • Launched December, 2010 • Metered model • Built it in-house

ColumbiaTribune.com launched paid content on Dec. 1, 2010.

•  Advertising-only model was not generating revenue growth

•  Wanted to eliminate incentive to stop buying print edition

•  New revenue stream

•  Metered model – 10 free/mo. •  Online-only: $8/mo. •  Print subscribers: $1.50/mo. •  Premium: All local content

(photos, video, news, sports, blogs, obits, etc.)

•  Free: Everything else (section fronts, wire, weather, contests, classifieds, etc.)

•  Only subscribers can comment

How does it work?

•  3,000,000 PVs/mo (still most popular in market) •  Total unique visitors up; local audience up 7% •  More than 9,500 paying – 60% conversion to

bundle •  Local advertising unaffected – Non-issue for

advertisers •  In first month, subscription revenue three times

lost ad revenue •  Few objections from readers – Quality journalism

at stake

One year after launch

• 55,000 average weekday circulation • Ownership: Morris • Launched December, 2010 • Metered model • Thoughtful strategy, methodical rollout

Core belief: Placing a value on the content is more important than any penny we’ll collect. Strategy: Put toe in the paid-content water to learn. Set stage for mobile/app paid content strategy. Use flexibility of model to experiment. Start up: Introduction of page threshold phases in December 2010. Rollout: Lots of communication with the market.

A thoughtful, deliberate rollout

•  An editor’s column •  A publisher’s column •  Online FAQ •  Anonymous comment interaction •  Media response and comment •  Phone calls •  Newsroom mindset: Let’s give ’em something

worth paying for

A thoughtful, deliberate rollout

We go beyond the button-pushing journalism some bloggers and copycat online sites offer. From Editor Alan English’s column: “How much would you pay to have your favorite journalist or columnist watchdogging City Hall? Would you buy him or her a cup of coffee each month?”

What the Chronicle told readers

“The value goes beyond access. You support the local journalism that includes: •  Bio-testing local waterways, revealing problems and

getting them attention. •  Battling for public records. •  Celebrating local heroes and honoring fallen soldiers. •  Checking the safety of your roadways and bridges.

What Alan English told readers

•  Reviewing policies and hiring practices at city hall. •  Raising awareness and donations for breast cancer. •  Championing better government. •  Leading coverage of ASU's national championship. •  Convening a roundtable of local health care CEOs to

learn the impact of reforms. •  Rallying charitable giving at Christmastime.

What Alan English told readers

“Who else does this as often as your local newspaper?”

Editor Alan English asked readers:

7 RECOMMENDATIONS

1. Make your site worth paying for

Charging generates revenue to help pay for journalism, but you now have to make your digital edition good enough to expect readers to actually pay for it.

1. Make your site worth paying for

This means: • Your site needs to work. • It looks like it was put together with a modicum of care.

• You’ve added value to the content.

Product differentiation

Product differentiation • Your site should be different from your print edition.

• Play to the strengths of digital: add value that only digital allows you to add

What this means

• Deeper, richer stories: documents & data • Sight, sound & motion • Context • Interactivity • Links to archived content • Engagement/community

2. Go with “opt out,” not “opt in”

Give print subscribers the option of not choosing a digital membership — but assume they will want to do so.

3. Choose a meter over a hard wall

• Keep your site search-engine friendly • Encourage discovery • Some see value in a porous “wall”

3. but keep your meter tight

• Most early adapters started loose and began to tighten

• The Augusta Chronicle began by giving everyone a free buffer of 100 views

• Within 6 months, they’d tightened it to 10

3. but keep your meter tight

Less than 5

5 10 15 20 25 and up

Surveyed dailies’ monthly meter settings

Free stories per 30 days

4. What to keep inside / outside the wall

OPEN ACCESS: • Breaking News • Section fronts • Wire • “Commodity news” • Weather • Contests • Classifieds

RESTRICT ACCESS: • Unique local content • News • Sports • Photos • Obits • Ability to comment

It is possible to charge too little. Don’t be afraid to ask readers to pay.

5. Don’t be afraid to ask for real money

It’s time to take a different approach with your online subscribers. Begin to set expectations by conditioning digital subscribers to feel they are members, not just paying customers.

6. Membership has its privileges

• Content • Pricing • Promotion • Customer service

7. Develop your own customer acquisition strategies

Brian Steffens Reynolds Journalism Institute steffensb@rjionline.org Mike Jenner RJI/Missouri School of Journalism jennerm@missouri.edu Cell: (573) 808-4785

Paid content VPA 2013

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