McGuire on Media

Opinions on pay walls don’t fit in neat sound bites, but newspapers face a tough challenge

UPDATE, Sept. 13, 10:50

I noted in this blog post yesterday that the free offerings in the Phoenix news ecosystem were going to attack AZCentral for its decision to construct a pay wall but this East Valley Tribune attack disappoints me.

I’ve always been disturbed by calling people names. This sophomoric move may be hip to some, but it doesn’t cut it for me. It strikes me as a pretty vehement response from a competitor that has already been reduced to a shell of its former self.  

Original post:

As I organized my thoughts to discuss newspaper “pay walls” and metered payments Monday evening on the Phoenix public television show Horizon on Channel 8, it seemed like a great time to record my thoughts on the subject for public consumption. The show went off without a hitch and here is a link. I joined Arizona Republic Senior Vice President and Editor, Randy Lovely, and KPHO General Manager, Ed Munson, on the show.

Since the Arizona Republic announced its specific plans for charging consumers for online content, local media has been asking for my reaction. That move goes into effect today. On the website in the right-hand column under the words, “About our new full access subscription model,” is a thorough and sincerely written explanation of the plan from Aug. 12 by Publisher John Zidich.

What most  interviewers want, because of the nature of their business, is a nice, concise, “this is dumb or this is smart,” preferably the former.

I got trapped once but I have tried to avoid interviews and one-liners. My analysis of the Republic effort to get more reader revenue and that of all the other newspapers who are joining the pay wall march  is just too nuanced for easy, glib answers and, frankly, my opinion keeps shifting.

I am hopeful pay walls can work because they might be able to extend the life of journalism—am institution critical to  society. But, the successful execution of pay walls will be incredibly tricky.

As I said in the “This I believe” blog post  I wrote May 30, “I believe a middle position is required on consumer revenue. Being “pro” or “anti” pay wall makes little sense to me.”

I also said in that post, “By the same token, the idea that legacy media can find a silver bullet such as tablets, or pay walls, or reinvigoration of old advertising models is silly and reckless. The only silver bullet is dramatic reinvention.”  I have come to believe there may be a way pay walls can be an element of that reinvention.

Alan Mutter delivered the tough news Monday that digital revenues are not coming close to replacing declining print revenues. It is little wonder newspapers have sought other alternatives.

The Steve Myers’ piece on Poynter cited above does a great job of detailing the pros and cons of the  pay wall argument.

I believe increasing reader revenue is a an essential element of any newspapers go-forward strategy. My alma mater, The Star Tribune, is doing it right.  They now  have 42% of their revenue coming in from the consumer side and their goal is 50/50. In that piece the Star Tribune’s Rob Gursha talks about how the newspaper is now focused on “consumer marketing.” That is the key to raising the percentage of reader revenue for newspapers.

Consumer marketing has not been part of newspaper’s expertise and a mammoth shift will be required to make it work. For some newspapers a pay wall may be the right answer. I think the critics who vehemently argue pay walls will delay or kill innovation are more than a bit hysterical and are not giving newspaper executives nearly enough credit. If, indeed, as the critics suggest, American newspaper publishers think pay walls will simply reinvent yesterday, they are going to be out of business soon.

The real risk is whether a newspaper like the Republic gets ignored in the rapidly evolving free news ecosystem. Here in Phoenix the noise about paid and free is in high gear. Channel 5 (KPHO) is hammering the point with its audience in promo ads and embedded in the newscast that they are free and “the other guys” are going to charge. (See the Channel 8 video.)

The clear implication is that KPHO is a viable alternative to the paid AZCentral. I spent some time wandering the KPHO site this afternoon. There is no polite way to say this: that implication is disingenuous at best.  to say that the comparison is apples and oranges is unfair to that cliché.

I know the Republic well and I often have issues with it, but to imply that KPHO is any thing more than a shadow of AZCentral and the Republic, is simply not realistic or honest.

However, as I said during the television show, KPHO and The Republic are probably going to serve significantly different markets with their websites. 

But there’s the consumer challenge. Newspapers now must be in the business of convincing audiences they have the best “mousetrap.” If they are going to charge more money across all platforms,  newspapers have to add value, fast and convincingly. 

I have been very impressed with the Republic’s new-found aggressiveness in trying to establish that indispensability to readers.  Editor Randy Lovely has been communicating often and well with readers.

It is apparent is that the Republic understands this is not a one sized fits all proposition. Not all their readers are going to be interested in paying for deep local coverage. That’s why they’re allowing “casual readers” to look at 20 articles a month.

The New York Times has converted a lot of skeptics and given genuine hope to big regional newspapers like the Republic with a similar plan although the Times position has been strong enough they have been able to halve the threshold to 10 free articles a month. 

Clay Shirky, the long-time critic of “walled gardens” has shifted his tone as he has watched the success of the Times and others newspapers. I respect Shirky more than any other journalism thinker. I applaud his willingness to reevaluate. I think he nails it when he says (newspapers have finally given up on ) “the idea that every reader online can be treated as if they were someone who is purchasing the paper, the kind of online equivalent of someone who’s purchasing the paper when it was just a physical product.”

Shirky believes the New York Times, Minneapolis Star-Tribune, the Chicago Sun and and an increasing number of papers copying them, are saying “we will never get a majority or even a sizable minority of our readers to pay us directly, but we can design a system in which some of our most passionate, engaged readers pay us directly, and the rest of the readers, the casual readers, we can keep around for the advertising revenue.”

The Story So Far from the Columbia Journalism School eloquently called the enthusiasts for the Times “fans” and reported that “Fans despite their small numbers accounted for 55% of the site’s traffic.”

What regional newspapers like The Republic are betting is that they too have enough “fans” to make a pay wall work.  That is where my concern and a bit of skepticism come into play. The only way the Republic and AZ Central are going enjoy success with a pay wall is if a lot of readers who care about local news become convinced The Republic offers them the best value. Local news has to be worth real dollars.

I think the Republic is making a terrific move by creating AZ Central Watchdog. It is a package of all the important investigative pieces The Republic has done. Right now the lead story in the package is the sensational story of a copper mining dispute that is ripping a part the town of Florence, AZ and much of the state Republican party.

You can always count on Dennis Wagner and Craig Harris for compelling journalism but I found this piece an especially wonderful “must read.”  Note all  the supporting data and information linked to in the online story.  That is a great example of using the web to add amazing value to the story.

Now let me write as a consumer. Until the announcement of the Watchdog section I had no intention of subscribing to the all-access subscription offer. I am now reconsidering, but there’s a rub. That’s because I read the Republic, The Star Tribune and the New York Times every day on my Kindle Fire.

The thing that profoundly disturbs me about newspapers maximizing reader  revenue is that I have not seen a single sign any of those companies has the faintest clue I am a subscriber. In fact I have gotten solicitations sent to my home by New York Times and they seem oblivious to my Kindle subscription.

The tremendous FAQ the Republic published today on its website is unfortunately quite clear that I am not included in the full access offer. The question reads: “I have a subscription to The Arizona Republic on my Kindle. Does this give me access to azcentral.com? The answer: “No, at this time we are not able to connect other e-reader subscriptions to an azcentral.com subscription.”

I think this is a serious mistake and while my hunch was this is caused by the intractability of the  tablet companies, like Amazon, that company claims on its website, that “We will share the name, billing address, and order information associated with your newspaper or magazine purchase with the publisher. Publishers may use this information for marketing purposes.”

The fact that I will have to pay double is profoundly disappointing. It is not the kind of consumer-friendly customer service that marks a good consumer products company.

It bring us back to newspapers’ toughest challenge when it comes to constructing pay walls. Consumer marketing has never been in a newspaper’s DNA . The consumer-first mindset is what’s going to be required  if newspapers are going to effectively increase reader revenue.

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