“Free Costs Too Much” Rupert Murdoch. My goal is to urge you not to leave money on the table...

““Free Costs Too Free Costs Too Much”Much”

Rupert Murdoch

My goal is to urge you not to leave money on the table during this period of significant

transition!

How much longer do

you think your print

subscribers will pay for

something you give

away free every day?

What if Starbucks said: Bring your own cup and we’ll give you FREE COFFEE everyday.

How many people would switch to free coffee?

1.1. Print circulation was declining.Print circulation was declining.

2.2. Loyal subscribers were moving to free.Loyal subscribers were moving to free.

3.3. Page Views far exceeded sold Page Views far exceeded sold advertising impressions.advertising impressions.

4.4. Online ad rates were dropping rapidly.Online ad rates were dropping rapidly.

5.5. Online ad revenue is way too low to pay Online ad revenue is way too low to pay for the true cost of content.for the true cost of content.

6.6. Professional content has value.Professional content has value.

Why we changed to paidWhy we changed to paid

Our newspaper started a digital

subscription model 15 months

ago.

Online Only Subscribers

Registered Users

330 29,046

Stockton After One Year

EZPay Subs. PIA Subs.

80% 50%

Daily Unique Visitors Monthly Page Views

19,000 2,500,000

When reading a newspaper website, what do people

say they are doing??

“I’m reading the newspaper”

In today’s time starved world, fewer and In today’s time starved world, fewer and fewer people come to our print fewer people come to our print newspapers for enjoyment. newspapers for enjoyment.

For many, we have simply become a For many, we have simply become a distribution vehicle for information they distribution vehicle for information they

can get much faster on the web can get much faster on the web and people under 35 feel…..and people under 35 feel…..

Mobile devices are better!Mobile devices are better!

Pew Research

‘State of the News Media 2011’

50% get news from TV50% get news from TV

Pew Research


50% get news from TV50% get news from TV 46% get news online 46% get news online

at least 3 times a weekat least 3 times a week

Pew Research


50% get news from TV50% get news from TV 46% get news online 46% get news online

at least 3 times a weekat least 3 times a week 40% from newspapers40% from newspapers

at least 3 times a weekat least 3 times a week

Ipad News Consumption Survey

What is the likelihood that a newspaper subscriber who uses an iPad says he or she

will switch from print to digital in the next six months?

Ipad News Consumption Survey

What is the likelihood that a newspaper subscriber who uses an iPad says he or she

will switch from print to digital in the next six months?

54%

Newspapers Share of Ad Revenue

Some Good News….

The IPAD and IPHONE are changing the value perception.

The same people who used to say content should always be free, are now willing to pay for content on IPHONES and IPADs.

99 cents is the new FREE.

‘Angry Birds’

built on this model.

Freemium

Just enough free to entice you and then up-sell you to

a paid version

All verticals, generic content, event All verticals, generic content, event calendars and section fronts are freecalendars and section fronts are free

Some items require a subscription: Some items require a subscription:

Text alerts E-mail newsletters E-editionText alerts E-mail newsletters E-edition

Only local content is protected:Only local content is protected:

We built our website using the freemium model:

• Three articles per month freeThree articles per month free


• Ten articles per month free with Ten articles per month free with registrationregistration


• Ten articles per month free with Ten articles per month free with registrationregistration

• Unlimited access with paid online Unlimited access with paid online subscriptionsubscription

Value is in the content, Value is in the content, not the distribution not the distribution

method. method.

The basis for our pricing modelThe basis for our pricing model

There is more local content on our There is more local content on our website than in print.website than in print.

Print only = $199Print only = $199Online only = $219Online only = $219Print/Online = $239Print/Online = $239

EZPAY/Online = was $182EZPAY/Online = was $182

A Variety of Pricing ModelsA Variety of Pricing Models

Newspaper

Introductory Print Only

Online Only

Print/Online Combo

Cape Cod, Mass. $169 -$30 +$10Medford, Oregon $135 $0 $0Portsmouth, NH $66 +$3 +$11New Bedford, Mass. $169 +$10 +$30Middletown, New York $195 +$20 +$20Stockton, California $99 +$20 +$40Stroudsburg, Pa. $195 +$40 +$20

Examples of our

Free

Online Content

• Results are better than predictedResults are better than predicted

What have we learnedWhat have we learned


• Unique visitors declined only 25% and Unique visitors declined only 25% and page views only 35%page views only 35%



• Unique visitors have declined only 25% Unique visitors have declined only 25% and page views only 35%and page views only 35%

• Paid users are more local, increasing Paid users are more local, increasing their value to advertiserstheir value to advertisers

What hWhat havave we learnede we learned




• Opt-Out better than Opt-InOpt-Out better than Opt-In





• Opt-Out better than Opt-InOpt-Out better than Opt-In

• Print Impact – We don’t know, but total Print Impact – We don’t know, but total circulation is starting to growcirculation is starting to grow


• No one has reported losing ad revenueNo one has reported losing ad revenue

• 80% charge print subscribers extra & 80% charge print subscribers extra & charging print customers a fee seems to charging print customers a fee seems to increase online only salesincrease online only sales

• Ad rates on paid pages can be higher Ad rates on paid pages can be higher than free pages.than free pages.

• Press+ has about 30 papers online todayPress+ has about 30 papers online today

• $6.99/mo. about the average price$6.99/mo. about the average price

What others have learnedWhat others have learned

• The world is going digitalThe world is going digital

• This is just the first step necessary to This is just the first step necessary to survive in a total digital futuresurvive in a total digital future

• The worst thing you can do is nothingThe worst thing you can do is nothing

You have to establish valueYou have to establish value

According to Borrell Associates:

In five years:

Mobile will represent

64.7%

of all digital revenue

Slovakia:

All newspapers in the country joined together with one paywall.

Users make one monthly payment

for access to all Slovakia newspapers. Revenue is split

based on paying customers’ page views on each site.

Our Current Focus:

• Launch Daily Deals• Launch a Digital Agency business• Develop an App for tablet editions• Modernize our existing websites• Stop chasing verticals we have lost

Figure out why people come to your site. Provide a service. People pay for services. Charge for content and services. Experiment and analyze. Market and promote constantly.

Recommendations:

Online Only Subscribers

Registered Users

330 29,046

Stockton After One Year

EZPay Subs. PIA Subs.

80% 50%

Daily Unique Visitors Monthly Page Views

19,000 2,500,000

“Free Costs Too Much” Rupert Murdoch. My goal is to urge you not to leave money on the table...

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