|GCI founder's gravestone|
How much additional revenue would that generate? Let's use Martore's figure at the high end, and assume a net increase of 250,000 without any loss of print subscribers switching to digital-only. Gannett now charges around $12 a month for digital-only. So: 250,000 x $144 = $36 million.
How meaningful is that? Let's assume a best-case scenario. Fourth-quarter circulation revenue was $313 million, according to yesterday's report. Multiply that over four quarters, you hit $1.3 billion annually. Bottom line: $36 million is a nice piece of change. But in the grand scheme, it doesn't move the needle much.
Note: Overall fourth-quarter revenue was $1.52 billion.
Further down the road
All these numbers reflect a whopping increase in circulation revenue after GCI raised print subscription rates an average 25% last year with the introduction of paywalls in the U.S. community newspaper division. Circulation revenue soared 17% year-over-year in the fourth quarter alone, when the paywalls were in place across all markets.
But the rate hikes came at a cost. During the quarter, circulation volume fell 11% as many customers rejected the higher prices. Still, that was only half the projected loss, Martore said.
In the long run, of course, Gannett will eventually lose all print subscribers as the newspaper industry switches solely to digital. We don't know when that will happen.
And it won't come all at once. For GCI, the switch might look like Detroit in 2009, where home delivery was reduced to three advertising-rich days a week: Thursday, Friday and Sunday. Single copies are still sold daily at newsstands and racks. Eventually, print will collapse to Sunday-only and then -- poof! -- gone.
The bigger question all publishers face: What will digital-only revenue total after print dies? GCI now charges $22 to $23 monthly for seven-day delivery, which includes digital access. Obviously, that's not all profit; embedded costs include newsprint, pressroom labor, and distribution. Back those out, and digital-only at $12 monthly might net out more profitably.
But how many of the current millions of print-only subscribers will exist as digital-only? We'll get an early clue later this year if Martore's projections pans out.
[Photo: Founder Frank Gannett died Dec. 3, 1957; he's buried in Mount Hope Cemetery in Rochester, N.Y., the company's home for many decades. A drawing of a paper carrier adorns his gravestone.]