A license to print money

This message from a (former) reader hit my inbox this morning:

>To whom it may concern…
>
>When the Helena IR started charging viewers for its online website, I dropped them as my homepage, and I took up your website as my Montana information source. Now that “your” website will be charging for online access, I will no longer support your paper& website nor the Helena IR paper or website. I will get my Montana information& news elsewhere. I know I’m not the only one that will take this action… good luck with your website subscription.

I’d like to “unpack” this message — if I may be allowed to pull out some of the literary theory jargon from my distant past.

>When the Helena IR started charging viewers for its online website, I dropped them as my homepage, and I took up your website as my Montana information source.

Thank you.

>Now that “your” website will be charging for online access,

Why is “your” in quotation marks? Was there ever any doubt about whose website it was? I admit freely that our old tagline was “It’s *your* paper,” but that never carried over to the online site of things.

>I will no longer support your paper& website nor the Helena IR paper or website. I will get my Montana information& news elsewhere.

How were this reader “supporting” it in the past if he or she wasn’t paying the Chronicle? Was it moral support? Perhaps the reader thinks that their visits to our page tallied up so much money in advertising revenue that it was like they had subscribed. (Not true.)

>I know I’m not the only one that will take this action… good luck with your website subscription.

Likely, this person is right. Judging by my inbox, many people are bidding the Chronicle adieu because the paper is asking them to pay for the news.

Many of these people, who have expressed their frustration in [comments](http://www.news.hypercrit.net/2012/05/21/youll-rue-the-day-and-words-to-that-effect/) on [our news story](http://www.bozemandailychronicle.com/news/dailyfeatures/article_53272808-a2f7-11e1-9b0d-0019bb2963f4.html), feel that our 1.2 million pageviews per month is a license to print money and that we shouldn’t need to charge readers to access the site. Case in point, [from user Shaqasorus](http://www.bozemandailychronicle.com/news/dailyfeatures/article_53272808-a2f7-11e1-9b0d-0019bb2963f4.html#comment-183b3548-a38f-11e1-b9f4-bf8898b209e2):

>First you need to get a new Advertising Manager. One that understands the new digital age paradigm. If you cannot turn 1.2M page views a month into a steady and sustainable monthly advertising revenue stream then you have a product that is not worth saving.

User [bozmama](http://www.bozemandailychronicle.com/news/dailyfeatures/article_53272808-a2f7-11e1-9b0d-0019bb2963f4.html#comment-c6fb7a7a-a399-11e1-a4cd-fb4e2dcb3d35) responded:

>I have about 5 ideas off the top of head for online ad $$…I agree with Shaq.

I’d love to hear those ideas. If you’re reading, send them to .

In the meantime, I’ll take the word of Alan D. Mutter, a former newspaper man and consultant specializing in new media ventures involving journalism and technology, [wrote](http://newsosaur.blogspot.com/2012/04/newspaper-digital-ad-share-hits-all.html) just a few weeks ago that newspapers’ share of digital ad revenue has hit an all-time low.

In 2003, when the Newspaper Association of America first started tallying the industry’s digital market share, newspapers held 16.7 percent of digital advertising in the U.S., Mutter reports. The newest data put that number at 10.3 percent.

Admittedly, Shaqasorus is right. This decline in newspapers’ share of the digital ad market is due to many papers thinking that all they have to do is throw some banner ads online then sit back and wait for the Google check to come.

It’s not that easy. We know it, and we have talented ad people working on the digital front right now trying to cajole into motion a machine built originally to do a different job. Until we get initiatives in place to make money online in novel ways, the fact remains that print dollars and digital pennies just don’t balance out.

I don’t necessarily agree 100 percent with the theory of paywalls and metered paywalls, but at any rate, we are turning on the meter on June 5. Perhaps the commenters are right; perhaps it will fail — though I’m not sure by what criteria we’d judge it a failure. This is the first time our paper has done this, and we are only the second paper in our company to roll out a metered site. The only definition I have for failure at this point is a catastrophic drop in Web traffic.

Perhaps we’ll find a new definition as time goes on. It’s too early to say.

6 Replies to “A license to print money”

  1. Michael,

    I fear for the BDC with this move – I am a reader from afar staying on top of my Bozeman news.  What I can, anyways.  I don’t go there often to read, but sometimes I do.  The payout for news (for the companies that report the news) has cheapened via the digital age – advertising money just isn’t the same.  The issues confronting a local paper like the BDC are scale ones, yet, even where scale seemed to not be the issue, we have seen iconic papers fail.  And, that is one interesting aspect of the scale issues – the cost of labor.  

    Historically, newspaper reporters made nothing.  There was just too much supply – it appears to be a sexy job where part of the compensation is local fame.  I experienced enough of that when I was a newspaper reporter and all I did was write for the Exponent.  The fact that I could go into a local business, mention that I was doing a story on X,Y, or Z, and I would be able to talk to someone important right away affirmed an ego that every person who has ever thought their writing to be good has.  Given the platform shift to blogs and whatnot, the cost to get written “news” (non-editor or fact-checked news will be in quotes from here on out) lowered – banner ads obstructing views (or not) was an acceptable price to pay.  Because it generally takes an experienced reader to be able to easily differentiate between ok and good writing, the reader often cannot tell the difference from editor checked news and non-editor checked news.  That reader assumes both to be of equal value and will continue to judge them based on that perception.  And, this, unfortunately drove down the value of editor-checked news.  Even as imperfect substitutes, they are often perceived as perfect substitutes.  And, the value of really great reporters fell, too.  When I was witnessing the non-editor or fact checked blog kill the reporter, I cringed for the future of media.  And, I searched long and hard for a source that I could trust.

    And, the production of a newspaper is an interesting thing that most people don’t understand.  The costs are not as they would normally appear.  Labor (writing labor), while traditionally a variable cost, is closer to a fixed cost – the paper has salaried writers (not all) rather than ones driven by the column-inch (I’m not advocating for either right now).  And, printing costs are driven by a fixed cost with a variable component. 

    When I moved from reporter to columnist, I noticed a different reaction among my readers – engagement.  I only ever received a few emails (very few) on things I reported on – and I think the majority of them were focused on a nuance that I didn’t have the space to cover and someone felt marginalized.  As a columnist, I always got emails (less in my Exponent days than my Daily Collegian days), good or bad.  My readers were engaged – emotionally and intellectually. And, in many different ways.  Why does this matter?  My new source of news is The Economist (do I put that in quotes?).  It is almost strictly a column-based periodical and there are no by-lines – the story is bigger than the person.  This is definitely not doable by local paper standards given the point about compensation I made above.  The writing is phenomenal, they have scale where scale matters, and they have a free website – kind of.  

    If it came down to it, I would pay real money for The Economist – I pay for my readership of the BDC (and other websites) by seeing the ads on the site.  They have a limit to the number of print articles you can read per week – five or ten – without being a registered user.  And, I’m sure they track their registered users with data (also, I’m not sure this is feasible for the local paper), which is another way to supplement their income.  And, sometimes (they tested it, at least), you have to watch a video ad in order to read a piece of writing.  They might be a periodical to look for as inspiration…  I’m not sure here.

    And, I’d need to know more about the BDC’s cost structure in order to see what can be optimized where and how.  Michael, these days, I no longer write, but I solve complex business problems not so different from this problem.   I’m offering some free help here, but I need to know the problem a little better.  You know how to get a hold of me, I imagine.  

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