News Column

Newspapers Charging for Online Content Is Growing Trend

Dec. 4, 2012

Scott Sloan

Starting this week, the Herald-Leader and four other Central Kentucky newspapers will charge for unlimited access to their websites, a growing trend as the newspaper industry continues to struggle with revenue declines.

The changes are coming Tuesday at the Herald-Leader, which is owned by California-based The McClatchy Co., and began Monday at four area newspapers owned by Indiana-based Schurz Communications: The Advocate-Messenger in Danville, Interior Journal in Stanford, Jessamine Journal in Nicholasville and Winchester Sun.

In Kentucky, more than half of newspapers now charge in some form for online access, said David Thompson, executive director of the Kentucky Press Association.

Around the country, newspapers have struggled in recent years as the recession led to a decline in advertising spending. That came on top of more advertising already shifting from lucrative print media to online, which typically has lower prices because of the proliferation of options.

In response, newspapers, including the Herald-Leader, have cut staffing and other costs to match declines in revenue.

Many have now begun charging for online content to augment print subscription revenue and advertising.

"There's just no way you can build a workable business model by charging for something in one place and giving it away in another," said veteran newspaper industry analyst John Morton. "That's the dilemma newspapers have been struggling with."

National chain Gannett has begun charging for websites in 71 of its 80-plus markets, including Louisville with the Courier-Journal and Cincinnati with the Enquirer. In recent years, The New York Times may be the best-known national newspaper to move to a pay model for its website. McClatchy, the Herald-Leader's owner, is moving its sites across the country to a pay model as well.

"Our business model has changed, and the content we produce online has value," said Rufus M. Friday, president and publisher of the Herald-Leader. "We're no longer just a newspaper company, but a media company that provides information across multiple platforms, including digital.

"We also still have the largest news and information-gathering team in Central and Eastern Kentucky."

Varying types of access

Newspapers have implemented a range of options as they begin asking non-print subscribers and, in some cases, print subscribers to pay for digital content.

Take, for instance, Landmark Community Newspapers, which owns 20-plus media properties in Kentucky, including the Central Kentucky News-Journal in Campbellsville.

For the websites of its non-daily newspapers, visitors are allowed to read a certain number of stories for free and are then required to pay. If they don't, they can't access similar stories going forward, said Landmark President Mike Abernathy.

For the websites of its daily newspapers, the same holds true except visitors are once again given access to that same number of stories each month. The industry refers to this model as "metered access."

The Herald-Leader's plan follows a metered model on its website, Kentucky.com. Some parts of the website, such as the homepage, will remain free. But online readers will need a digital subscription after they pass a certain limit each month.

Abernathy said calls of concern tended to come most from readers outside the area.

"I was perfectly comfortable with the complaints because we would just explain the logic behind the changes," he said. "The cost of the content is important and needs to be paid for by somebody in one way or another."

Community Newspaper Holdings Inc., which owns five Kentucky newspapers including the Richmond Register and The Independent in Ashland, is also experimenting with charging for online access.

The company is testing such changes at newspapers in Indiana, Michigan and Minnesota but none so far in Kentucky, said chief digital officer Matthew Ipsan.

"We're like every other newspaper," he said. "We're looking to see what our options are down the road with all sorts of different subscriptions.

"We're as interested as anyone else is in the space."

For Schurz Communications, the company is modeling its plan as a "membership" opportunity for customers, said Scott Schurz, president of the four Central Kentucky newspapers.

Under the plan, paying for access will also entitle customers to such eventual perks as some free announcements and classified advertisements that would otherwise cost money.

"There are a lot of choices today, and you have to be at the top of the list providing things people need and want," he said. "As time goes on, I think we'll add more and more to our package."

Effects of the changes

A survey conducted earlier this year by the Newspaper Association of America found website traffic fell, as expected, at newspapers that began charging for access.

Online page views dropped at least 10 percent for more than half of the 71 newspapers that had begun charging for access and took the survey. But roughly half also reported that the number of unique visitors to their websites remained flat or increased.

Nationally, free websites, such as those owned by TV stations, have moved to take advantage of local newspapers' moving to paid digital models.

WLEX, Lexington's NBC affiliate, has "never ever thought about adding a paywall," said News Director Bruce Carter.

"We're not in the same situation that newspapers are in," he said. In recent years, WLEX has added staff as it launched additional newscasts at alternative times such as 4 and 7 p.m.

CBS affiliate WKYT also has no plans to charge for online access to WKYT.com, said General Manager Chris Mossman.

"It's just not part of the broadcast television business model," he said. "We put out a signal 24/7 that if you have an antenna is available free to you, and we do the same with the information we provide via the internet."

For newspapers, the decision to charge has been driven by the need for higher revenue. Morton, the newspaper industry analyst, said it's not yet clear how well newspapers have done at boosting that revenue.

"We don't know whether they're going to be a solution," he said. "I think in the long term, though, paywalls are absolutely going to be crucial."



Source: (c)2012 Lexington Herald-Leader (Lexington, Ky.) Distributed by MCT Information Services


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