So this morning one of my favorite blogs, D Magazine’s Frontburner took up the (seemingly for the millionth time) debate surrounding subscriptions to newspaper Web sites as a way to combat falling print revenues. AH Belo, the parent company of Dallas’ paper of record, the Dallas Morning News, is hinting that they’ll toss up pay walls in the near future on one of its online properties. I weighed in on the comments, but I wanted to share it here as well.
I think this just may work, but they’re going to have to pour that revenue into more and more local stories online to add value to it.
A couple of reasons:
People still need and want local news
A site or two may give away local news for free, but the DMN is still the news source of record for that area. It seems that with most local news, the paper reports and TV stations follow up on it. The only difference here is in the instance of fires, wrecks and robberies where instant, but generally unimportant news gets immediate coverage but fizzles.
But in cases like the Cowboys practice facility collapse, the DMN owned it and those stories were of immense value. I, like thousands of others, got it absolutely free. All the DMN got as a result was a few pageviews from me and probably not a dime of revenue.
The cost per reader will not increase with Web visitors, but revenue will.
If a newspaper goes from 100 paying subscribers to 1000 paying subscribers, there is an increase in production costs. If a Web site goes from 100 paying subscribers to 1000 paying subscribers, the production cost increase is nil, but the revenue and profit still increases ten fold.
A few days ago there was a report where some 80 percent of people said they wouldn’t pay for news online. I call shenanigans. When gas skyrocketed to $4/gallon a year and a half ago there were all these people saying they’d drive less bla bla bla. I took public transit for a little while and it sucked. Now I drive again and I paid $3/gallon the other day. If I value news and information like I do driving and someone asks me to pay for it, I’m going to eventually.
But to make this work, DallasNews is going to have to provide value in their stories. They’re not going to be able to charge for movie reviews or generic Cowboys content, I can get that anywhere. They are absolutely going to have to provide news to Dallas residents that they truly can get no where else. They have to OWN local news and sports. And when they do they’re going to have to make sure that it doesn’t go far for free. (There will be some copyright infringement, there always is.)
Targeted Advertising
Once they have detailed subscriber data, they’re going to be able to target advertisers and audience more effectively. They’ll be able to geo-target to zip codes (if they don’t already) based on a subscribers billing information and sell more ads and open up the DMN to a more diverse group of advertisers. How? Google tells me Dallas has 200 zip codes. If I am a small advertiser, like a restaurant with delivery and I only want to advertise to 5 of those zip codes, I can’t necessarily do it on DallasNews.com right now. But if the DMN gave me the option to advertise online to just subscribers in those 5 zip codes for 10% of the normal cost of a site-wide advertisement, I just might do it. Empower hundreds of local advertisers to target ads and you increase the value of those ads and the revenue associated with it.
Okay, I’ll stop rambling now, but I think it can work.