April 20, 2006
Case Study
SUMMARY:
Can a newspaper site that's not as big and famous as, say, WSJ.com, get away with charging for online access to current news? The fact that nearly 90% of newspaper sites don't charge for news makes it even harder; newspaper surfers think that only archives require payment.
However, Steve Larson, founder of Our-Hometown.com, which handles online publishing work for 77 local weeklies around the US, is testing a radical approach --- flip the archive model: charge only for current news.
Read on for a look at what Larson's company and his resource-strapped weekly newspaper clients have learned about paid online subscriptions.
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By Contributing Editor Laurianne McLaughlin
CHALLENGE
You’re a small newspaper company. You run on small margins. You don’t have a budget to hire an online editorial staff the way the big guys do. And oh yeah, not only do you want to be online, but also you want to charge your readers for local news.
Driving up overall subscriptions and ad revenue wouldn’t hurt, either.
“We’re really a service bureau,” says Steve Larson, founder of Our-Hometown.com. Weekly newspaper publishers send Larson the files they use to print the paper (in PDF, Quark or PageMaker formats) and Larson uses a small group of work-from-home employees to pull that content into HTML format in standard templates and post it. The weekly newspaper editors don’t have to learn coding or spend hours cutting and pasting.
“Sometimes there are five people at the paper,” Larson says. “They don’t have the time.”
However, these newspapers also didn't have a big budget. Could Larson help his clients sell paid subscriptions and/or more ads online to help pay their Web bills?
CAMPAIGN
Since 2003, Larson has helped 20 of his 77 weekly newspaper clients convert to a model where the freshest one to two weeks’ worth of online news requires a paid subscription.
His sites show print display ads within the online newspapers. The 20 papers’ advertisers typically fork over a small extra fee to show the same ads online. And those display ads show up in Google results.
Step 1: Give your potential audience a good look
Larson passionately believes that weekly newspapers deliver some stories that no one else does; for example, coverage of local government meetings. This fresh, local news is the most valuable asset, he says. So give away the archived local news so people can get as much of a look at the potential product as they want.
“You can charge almost as much for the online subscription as the print subscription,” Larson says. “What enables this is providing a huge amount of free samples in the archive."
Many daily newspapers have taken the stance that archived material is a good place to cash in on online readers -- charging per article, or charging a fee for a set number of hours of archive use. Sometimes they offer an annual archive subscription or bundle this into an annual online fee.
“This gets complicated,” Larson says. “I have to start thinking, do I really want to pay $3 or $4 for this article? Can I find it elsewhere? How much am I going to want to use the archives?”
Step 2: Make archived stories and display ads S=show up in search engines
“By having the archives completely open, when someone searches on Google for an issue in the community, they’re going to discover the paper,” Larson says.
With the free archive model, virtually 100% of the local news stories show up in Google. Larson's company also codes the print display ads (the same ones that run in the local papers) to run online and to be picked up by Google and other search engines.
Very rarely do you type a local term into Google and come up with an image of a print newspaper’s display ad.
However, Larson’s team has figured out a way to tweak the language in the print display ad and help Google find it, a coding technique for which he has submitted a patent application.
So for example, if you Google “land lots” plus the name of one of the papers’ hometowns, you’ll see realty office ads for land lots, just as they ran in the paper. Website names within these display ads are hotlinked.
Step 3: Realize the print price is right
Think you have to price an online subscription in the cellar? Larson’s clients have proved otherwise.
“Our recommendation is you charge for Net-only access the same price you do for print subscriptions,” he says. If an annual subscription to your weekly newspaper costs $27, charge $27 for the online subscription product, he advises, for combination print and online access, double the figure and take $10 off.
“Convenient is more important than free,” Larson says. “With local news, people are willing to pay for convenience online."
RESULTS
--Among the 20 papers using Larson’s model -- charging for the most recent one or two weeks of online news but making archives free -- all are seeing online subscription numbers equal to about 2% of their print subscribers.
It's not huge bucks, but let's face it, for these publications (and increasingly for everyone in the newspaper business these days) every dime matters.
Large daily newspapers with more resources, Larson says, are happy to sign up a paying online group of subscribers equal to between 2%-3% of their print subscribers.
“We’ve seen we can get the same price for the Internet or print edition,” he states. “Plus the editors and advertisers are gaining additional exposures to new markets because the archives are open.”
--Larson’s weekly newspaper clients have driven advertising revenue up without creating banner ads. Many of the papers upsell print display ads to clients, offering to run an online version of the print display ad for between 5% and 10% of the print ad’s cost.
--Graphical presentation of local news does not have to be unique. Larson’s publishing system involves standard HTML templates, so the 77 weekly newspapers he works with look quite similar online. The stories are front and center, display ads down the right-hand column; presentation of material certainly doesn’t spell fancy, though Larson says new templates are coming soon.
Useful links related to this article:
Our-Hometown.com
http://www.our-hometown.com
The Wave – Rockaway, NY weekly newspaper using Our-Hometown.com’s free archive model
http://www.rockawave.com
