Newspapers Betting On The Past May Find Themselves In Trouble In The Future

from the that's-how-it-works dept

One of the "examples" held up by newspaper folks, who think that charging online is the answer, is the "success" of the Arkansas Democrat-Gazette. However, Jay Rosen points us to Mark Potts excellent analysis of what's happening at the Democrat-Gazette and the conclusion is that the "success" is a lot more questionable than many who highlight it might believe.

First, the online subscription process hasn't really been a success in terms of getting online subscriptions. They've only signed up 3,400 subscribers in six whole years -- bringing in a whopping $200,000 in revenue. That's not paying for very much. What the subscription process has done, is slowed down the number of folks ditching their paper subscriptions. Of course, that still might get some newspaper folks excited -- but, again, Potts pours some cold water on that, by suggesting some reasons why this might be unique, including the fact that the population is older, there's little competition (but it's rapidly increasing) and the paper already held a really strong market position. But the key point is that the paper is betting on print -- not the web. The business model isn't driving significant new web revenue, it's trying to cling to the past as long as possible. That's a really dangerous position to be in if someone else in your market figures out how to make the online revenue side of things work out -- because it really isn't that easy to turn on a dime.

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  • identicon
    Anonymous Coward, 21 May 2009 @ 3:42am

    Think about it. $200,000 of income, and they probably need not more than 1 or 2 $30,000 a year employees to make it go, and a single server and connectivity. I would suspect that their $200,000 income generates a healthy profit based on what it costs to produce.

    Further, the $200,000 is based on the subscription fees. Without seeing inside, there is no way to know if there is web specific advertising in there, or any other sources of income.

    Important too to consider this quote "the paper's circulation has held fairly steady at around 180,000 papers a day (275,000 on Sunday) over the past few years, while the rest of the industry's circulation has declined steadily and ever faster.". While Mr Potts uses this to suggest that their are forcing people to buy paper copies because the website is subscription only, that sort of assumes that a shift to free online in inevitable, which is not the case.

    The author assumes there is some rush to "switch to alternatives" such as online news sites. I realize that Mr Potts is "I'm an entrepreneur and consultant who works with media and Internet companies on strategy and product development.", which suggests he sees only one future, online and free. Such a biased starting point brings out such a biased end result.

    reply to this | link to this | view in chronology ]

  • identicon
    Haywood, 21 May 2009 @ 4:46am

    I'm going out on a limb here, and say maybe

    That seem like $58 a year, compared to $200 per year for daily delivery for my local paper. Assuming that is a full digital version of the local daily, I might just be a player. The only reason I'd pay it would be; to keep track of the rascals down at city hall. This would be a good halfway measure, no paper to pick up out of the bushes, no recycle, yet if the investigative journalism was there it might just be worth it.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 21 May 2009 @ 6:08am

    Going down

    I have home delivery for one of the major US newspapers for umpteen years costing me more than $400 annually.

    Hearing of yet another price increase, I called to cancel the subscription.

    They offered to cut the price in half for a year.

    I took it.

    Let's see what happens next year??

    reply to this | link to this | view in chronology ]

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