• by John Capone , December 4, 2009

The Price Is Right

Long Island’s newsday set its pay wall firmly in place in November, becoming one of the few local newspapers to charge for all online access to its content. MediaNews also joined the club, charging for its content in Chico, Calif. and York, Penn. The theoretical gymnastics of figuring out the right trade off between eyeballs and fees has been one hurdle. Newsday began charging $5 a week, arrived at, easily enough, to achieve exact parity with home delivery. Of course, Newsday is in a unique situation.

Instead of telling you that you now have to pay to read more than a couple of lines of a story about the final vote tallies in the Nassau County election, the site flashes a message that reads, “newsday.com is now available at no charge to Newsday and Optimum Online subscribers.” And this, after all, is the point. Parent company Cablevision has pulled the Newsday arrow from its quiver in an attempt to drive its cable service. “It’s an entirely sensible approach,” Steven Brill, cofounder of Journalism Online, tells MEDIA magazine, speaking from a room where he’s surrounded by people trying to figure just how much to charge for various types on online content.

With the exception of the Cablevison wrinkle, Newsday’s plan is similar to the one Brill is betting many local newspapers will adopt. “They aren’t risking any ad revenue by stopping page views from people who are out-of-market.”

He contends that papers should, in fact, charge even print subscribers for online access. “What we’re advising our 1,200 affiliates to do is charge something for online, but offer deep discounts if you get the print subscription. [Newsday is] taking it farther than I would by offering it for free if you get the print subscription.” The Journalism Online model gets a bit more complicated in that it factors freemium content into the equation, letting readers access a small number of articles in their entirety for no charge.

The question of just what to charge is something of an insoluble pancake for now, but Brill says, “We promise to share, not publisher-specific but macro, information across all our sites so that they’ll know very quickly, for example, is it better to charge for a monthly subscription or an annual subscription, or a micro-payment, or is there a huge difference between $4.95 a month and $6.95 a month.” Brill expects his service to launch by the start of 2010 and sees a mature paid content market, where content can be packaged, and more specific and informed conversations about what the revenue split should be can be had, as being about two years away.

Ken Doctor, affiliate analyst at publishing research firm Outsell, says more than three-quarters of readers say they would go somewhere else if a pay wall went up in front of a local news site. “It’s less the price-point initially than the hurdle of, it’s free or it’s not free. That’s what TimesSelect proved out.” For Newsday, the real question he says, though, is how they attribute the revenue. There is a real value Cablevision can place in Newsday now, as a retention tool.

“The greatest opportunity for charging online,” says Doctor, “Are the smallest papers.” And he points to MediaNews’ decisions as an interesting development. The papers are fairly far from big cities and have differentiated, unduplicated content, and began charging its print subscribers a small fee for online access. “That model may work in a Chico or a York; it won’t work in a metropolitan area. There’s simply too much competition.”