The publisher of the Chattanooga Times Free Press
this month announced a plan to spend $6.1 million on a program to switch readers to its online edition by giving them an iPad tablet
The investment in its digital future can work with the right pricing strategy on subscriptions, a reduction in printing costs and methods to gather first-party audience data to
boost the value of its advertising inventory.
The conversion of daily print subscribers to its digital newspaper began last week with the distribution of iPads among a select group. Parent
company WEHCO Media plans to spend $4.1 million on thousands of the Apple-made tablets to shift subscribers to digital in phases. The remaining $1.7 million will go toward marketing and technology
Subscribers who agree to pay the current rate of $34 a month will receive an iPad
to read the paper in its app, which also has a version
for smartphones. The goal is to end printing and distribution its daily paper by the middle of next year, the newspaper reported on its site.
The publisher determined that it
could save on production, distribution and newsprint expenses while continuing to offer the same news product and formats for advertising. The digital platform allows the paper to include more photos
and video with some stories. The app also has text-to-speech features and will store the past 60 editions of the paper.
The shift to digital reflects the changing economics
for the newspaper industry as circulation revenue surpasses advertising sales, said Walter E. Hussman Jr., publisher of the Times Free Press and chairman of WEHCO Media. With consumers
spending more time online, advertisers have shifted their media spending to internet search and social media.
The publisher has switched other papers to digital, starting with
the Arkansas Democrat-Gazette in 2018. It determined the change was necessary to create a sustainable business as the paper started to lose money.
The idea of
providing a tablet computer to subscribers as a loss leader isn’t entirely unusual for other kinds of businesses, such as cellular companies that subsidize the cost of smartphones to people who
commit to a wireless contract. The Times Free Press will have to be mindful of recouping its investment in iPads for subscribers.
It’s important the paper is
charging as much for a digital subscription as for print. Many newspapers are wedded to their print subscription revenue and need to charge more for their digital products, as Publishing Insider
By converting more readers to digital, newspapers have more opportunities to gather first-party data about their readers in a privacy-compliant manner, helping to
bolster the value of their advertising inventory with improved targeting. Ideally, going digital will spur a virtuous cycle of subscription and ad revenue growth.