• by David Goetzl  @dgoetzl, February 9, 2010

As debate percolates around newspapers charging for Web content, count on the Miami Herald and Kansas City Star sites to stay free. McClatchy Co. CEO Gary Pruitt said Tuesday the company is "comfortable" with an ad-supported model without pay walls.

"We don't view it as fatally flawed," he said.

With less traffic, McClatchy believes pay walls would bring fewer ad dollars than it would gain from subscription fees. "If we could make more revenue with paid products, we would," he said.

Still, McClatchy will continue to experiment with one-offs, including a paid offering around state government news (targeted partly at wealthy lobbyists) at its Raleigh, N.C. paper. And Pruitt added that if The New York Times and papers owned by News Corp. yield successful pay models, McClatchy might copy some of their tactics.

"We will continue to evolve and learn from others," he said.

McClatchy owns 30 daily papers, including Miami and Kansas City. On Tuesday, he appeared at a Borrell Associates local online ad event in New York.

At McClatchy, digital revenues are growing, yielding 16.2% of total ad dollars last year -- up from 11.6% in 2009. Plus, profit margins are higher than in the legacy print business, Pruitt said. How much will online growth continue? Pruitt said flat-out he didn't know.

For the most part, Internet advertisers continue to be the same ones that advertise in print, he noted. But over time, he expects smaller marketers to increasingly take advantage of lower costs on the Web.

Turning to the bulk of McClatchy's operations, Pruitt said print remains challenging. But one advantage for the company: There is generally only one newspaper in a particular market. Breaking news, he said, attracts an audience, and the local paper has the largest newsgathering operation. It also boasts a "powerful" local brand advertisers want to align with.

"It's a difficult thing to establish," he said, noting that Microsoft and AT&T have unsuccessfully attempted local content forays.

One challenge is making print relevant to a younger audience, but Pruitt said research shows when the content is targeted at 18- to 34-year-olds, the changes also appeal to older readers.