Saturday, June 02, 2012

Des Moines | 'Free is a better value than not free'

Des Moines Register readers aren't thrilled about the big subscription price increase Gannett is ramming through introducing to Iowa and other states where it's now erecting newspaper paywalls.

During an online chat Thursday, readers pressed Publisher Laura Hollingsworth to justify what one said was a 40%-plus increase in subscription cost -- without any discernible added benefit.

From the transcript, Hollingsworth said: "My team and I are prepared to stand by our value and ask our communities to invest in the best news and information and reporting that can be offered."

Reader Ben's quick comeback: "Actually, free is a better value than not free."

Then there was this, from an unidentified reader: "While I support the paper's move to a paywall for digital content, I calculated my increase at over 40%. It seems that the paper is punishing its print subscribers. Will the Register offer a print-only subscription?"

No, Hollingsworth said. Digital access can be unbundled from print, she claims, but print can't be unbundled from digital.

"We simply don't write stories 'just for print' anymore and the costs to do today's journalism at an excellent level can't be isolated to 'just print,'" she said. "Our journalists are writing, posting, shooting video, editing, updating and interacting on multiple platforms all day long. It's something we must do to thrive long-term. The reason there is a digital-only option, and not a 'just print' option, simply reflects the reduced cost of printing, manufacturing, delivery -- while charging the same for content value."

Hollingsworth implies news production costs have increased. In fact, as we all know, GCI's labor expenses have plunged as the company eliminated more than 20,000 jobs through layoffs and other means. But advertising revenue has plunged, too, so readers must now chip in more.

Earlier: In Nashville, Tennessean publisher says many readers are happy about paywall.


  1. A more candid response from Hollingsworth would be this:

    Digital-only subscribers should pay at least as much as print subscribers. Although they don't get a print product, they get all the print paper's content -- and much more: many more stories, plus videos, blogs, photo galleries, etc.

    But under Gannett's new paywall strategy, and the realities of Internet commerce, the company can't charge as much for digital only.

    So, the only way GCI can recover some of the millions in lost advertising revenue is by hitting up its existing paying print customers for more money.

    After all, you can't impose a price increase on digital-only subscribers who've never paid in the first place.

  2. Boo-hoo! DMR has a paywall! Well, like Captain James T. Kirk, I don't believe in a no-win scenario, at least in this case. I'm not much of a techie. I have to believe many others have figured out how to continue to read the paper for free without paying for a subscription. If the paper has a stronger paywall, they aren't using it.

    People can always share subscriptions, but they couldn't all read the digital paper at the same time.

  3. The free readers can suck it. My work is worth money, and if they wouldn't give me free fries at their job, they shouldn't expect free stuff from me.

    That being said, we are doing an exceptionally poor job of marketing this change, from the announcement to the analysts to the chats with the readers. Why is the question of added worth for added cost even coming up? People don't ask where the added benefit is when their power or cable bills increase.

    I realize it's not the same thing, but effective marketing support would address reader concerns without us sounding so defensive.

  4. Cardinal sin by the news industry was not starting to charge back around 1995.

    Idiot greedy jerks at the top grabbed their parachutes.

    Most companies are too far into the death spiral and laid off so many that they'll never have enough quality journalism to pay for now.

  5. Earlier this week I got caught in a confusing conversation with a friend who wanted to discuss a particularly provocative letter to the editor in our local Gannett newspaper. Both of us subscribe to the print edition and also look at the online version when it is more convenient to do so. When she first brought up the subject of the letter I realized that I hadn't seen it, and we quickly realized that it had appeared only in print (which she had looked at that day and I had not). The letter was not yet online and didn't appear there for another 24 hours. That led me to go back to the print newspaper and compare it to the digital edition. I found that the online site had not had any of its letters updated in 4 days, while many had appeared in print during that time. Additionally the online site's "news" (I use the term loosely here), was in almost all cases more than 24 hours old, and in some cases over a week old.

    The print newspaper is still a much better product, and the digital content is certainly sub-par in my community, to put it kindly. With the print paper I get better news which is at least fresh every day, and many feature stories which aren't ever replicated online. What would entice me to pay separately for the sorry website, if I didn't want the print version?

    It is beyond me how the Gannett corporation expects to increase its business by degrading its product at the same time that it raises its prices. Isn't anyone thinking this through?

  6. 5:17 writes: "People don't ask where the added benefit is when their power or cable bills increase."

    Power or cable bills generally don't spike 40%.

    If newspapers were passing along a 3% or even 5% subscription increase, they might not have to justify it; people would assume it's just inflation.

    But how are Hollingsworth and her fellow Corporate execs selling this? Not very well, as you point out.

    Apparently, one of Corporate's talking points is to persuade readers that they aren't spending more -- they're underwriting "investments."

    Last week, Tennessean Publisher Carol Hudler said many readers were happy about the paywall-related price increases. She paraphrased them saying: "it’s about time you invested in content and charged for it.”

    Now, we have Hollingsworth saying:

    "My team and I are prepared to stand by our value and ask our communities to invest in the best news and information and reporting that can be offered."

  7. The same company that is funding a year's vacation for its most experienced journalists just to get them off the payroll is 'investing' in content. What a farce. The only thing these readers are investing in are the pockets in McLean, VA.

  8. Here's a measure of the newspaper division's growing reliance on subscription revenue vs. advertising revenue.

    In 2007, 80% of the division's total $6.2 billion in revenue came from advertising; the rest was circulation.

    Last year, just 70% of the division's (much smaller!) $3.6 billion in total revenue came from advertising.

    More and more, newspaper readers are going to pay more of the cost.

  9. 5:55 writes: "What would entice me to pay separately for the sorry website, if I didn't want the print version?"

    You might pay for Register digital access only because it's cheap: just $10 a month.

    To get a seven-day print subscription, which of course includes digital, you would pay more than twice as much: $23 a month.

  10. I can only think of one type of business where the producer has continually ignored the desires of the consumer.
    And because newspaper companies had built deep and wide moats, that wasn't a deal breaker.
    Up until the mid-90s.
    No more.

  11. As journalists we push truth in advertising but in letters to readers at my paper there was no breakdown, no telling the print subscriber that basically you will be paying a lot more even if you do not want it. My friends were confused by the publisher letters sent to homes and waited until they could compare what they had been paying until what they saw they were getting ripped off with. That created anger. Gannett honchos think people are stupid and have no respect for them. Sad.

  12. 7:18 It's a nearly impossible sale.

    Newspaper: We're raising your subscription price 30%. But you'll get digital access including our new tablet app!

    Reader: But I don't own a tablet. And online access is already free.

    Newspaper: We've also hired three new reporters to cover the passion topics you've identified.

    Reader: But those hires don't make up for the 20 reporters you've laid off over the past year.

    Newspaper: Think of it as an investment!

    Reader: *annoyed expression*

    Newspaper: *weary sigh*

  13. OK, I went to my paper's website to get prep sports updates online from a game at 11 a.m. today. Nothing. No twitter, nothing. I sure am getting more bang for my digital buck. Guess I have to wait until the paper arrives tomorrow.

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  15. "Ramming through?" Come on, Jim. Now you're starting to sound like one of the letter writers to my paper complaining about still paying less than $25 a month to have the newspaper hand delivered to their house every single day after the first price increase in ages.

    No, it's not been a perfect process. But the fact that the company is addressing reader complaints with things like live chats shows executives at some sites are trying to be forthright.

    And I will agree that the "investment" talking point is a bad one.

  16. @5:17 PM – You’re clearly misinformed.

    People complain when cable rates go up…many seek a break, cut services or flee to competitors.

    People complain when utility rates go up….many even in advance as utility increases need approval, many also better manage consumption and/or flee to third party providers.

    Gannett should have anticipated the same behaviors here, more so given the exorbitant rate increases it seeks for ZERO added-value.

    In regard to Gannett marketing its way out of it, good luck as again, there’s zero added value to sell especially to print-only subscribers who’ve already been paying increasingly higher amounts for already shrinking newspapers with questionable attention to detail in what they present (websites reflect shrinking content too). Others will no doubt join that lot in asking for lower rates, a change to weekend only packages, that is if they chose to continue subscribing at all.

    Unfortunately, this is another example where Gannett set rates not on what value it delivers (else it would have raised them this high long ago), but on what monies it needs which is forcing readers to cut back or flee…which also explains why such high increase are being sought.

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  19. When the local papers had the autonomy to control their own destiny, they would copy the successful efforts from the other 85 papers across the company and ignore the bad stuff. They'd experiment on their own, and if successful, would be copied by the other 85.

    Now, there is no small-time experimenting among 85 different markets because Gannett has consolidated all services to some corporately controlled central hub. Now, every bet is an "all-in" experiment driven by corporate. One only needs to reach into recent history to review the many successful products invented by local papers and ruined when corporate took them over.

    At one time, our paper was talking about free circulation to increase distribution. After all, advertisers pay on a cost-per-thousand model. The more thousands a paper has in distribution, the higher the rate to advertise (and, bonus, the paper doesn't have to do any rate increases).

    Carry that logic forward. By running off the circulation, how long do you think the rates to advertise will hold? In order to maintain profitability, papers will need to increase the CPM rates to offset the decline in circulation for both print and online. It's a lose-lose proposition.

  20. Gannett hiked rates and cut content and staff to survive longer, so readers and advertisers and left, so it raised rates and cut some more, so more customers left, so it raised prices even higher and cut even more, so even more customers left

    So, is there really any doubt what will happen once Gannett’s done rolling out its significantly higher rates? Even more readers and advertisers will leave until Gannett has little of both left.

    It’s time to stop this madness to get it right.

  21. I think all this is beginning to weigh on poor Laura. All the layoffs, the lives she's ruined, the lies. She doesn't look good.

  22. 10:29-- I do agree with your initial premise of the problems with consolidation.

    However, there are problems with the idea of giving the paper away free to increase circ and maintain ad rates. First of all, advertsiers see paid subscibers as much more valuable than free circ. So 100,000 paid is probably worth more than 150,000 (or more) free. Second, ABC does not audit free papers so total real distribution is hard to prove. That might not be too much of a problem with small, local advertisers. However, large advertisers and agencies typically want those numbers.

  23. @8:25, you do realize that other reputable auditing agencies exist beyond ABC right, ones that larger advertisers respect? And let’s not forget how ABC only recently stopped newspapers from buying copies (bonus day issues was one way) to pad their paid circulation. Larger advertisers were also aware of the practice and even bought more on those days. Why? Because they wanted to reach out to a larger audience, even to those who may not pay for the paper as they too know it’s a numbers game.


Jim says: "Proceed with caution; this is a free-for-all comment zone. I try to correct or clarify incorrect information. But I can't catch everything. Please keep your posts focused on Gannett and media-related subjects. Note that I occasionally review comments in advance, to reject inappropriate ones. And I ignore hostile posters, and recommend you do, too."

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