Interesting — the Star Tribune isn’t going to post some of its print content to the Web until after it’s run in print. You can find editor Nancy Barnes’ explanation here. (It’s a little ironic that she’s speaking to “you, our paying print customers” online.)
I think the flaw in this model is clear — the way to lure readers to your product is to give them more content, not less. The plan is somewhat easier to understand if you read Ms. Barnes’ column, in which she classifies the print customers as “paying customers.” By that logic, of course, we who read the paper online are just moochers.
The problem with this should be pretty obvious — subscription and single-copy revenue isn’t that significant to a newspapers’ bottom line. (More on this later.) What’s significant — the business model that managers forget about — is that the core source of revenue for newspapers is eyeballs on ads. Steve Yelvington had a good blog post on this a while back. What newspapers do, in essence, is sell audiences to advertisers — which is why, IMO, newsroom managers sometimes get fuzzy about the distinction between subscription revenue and revenue gained from audience share.
Here’s my disquisition on subscription revenue: There are two kinds of revenue most newspapers get from subscribers: first, there’s money gained directly by people paying for home delivery. Second, there’s the money that’s vastly more important, which is the revenue gained by selling ads. Your ad rates, of course, vary with the market, but are in essence a function of how many people see the ad. (You can also sell by demographics, assuming you know them, and zoned sections, and etc., but the bottom line is audience.)
Now, that first type of revenue can seem pretty significant. Even at a small shop like the Missourian, circ revenue accounts for about 20 percent of the bottom line. But what people forget is that your goal in circulation is generally to break even, not often to turn some sort of a huge profit. (Partly that’s because newspapers have become addicted to advertising as a source of revenue, which leads them to offer all sorts of free or reduced-rate deals to drive the numbers. But that’s another post for another time.) Bottom line, your actual subscriber revenue from “paying customers” is a break-even proposition.
The second source of revenue from subscribers is the one that you should be paying attention to. Which just illuminates the flaw with the Strib’s plan even more — your eyeballs on ads, print and online, are a function of the quality content you serve up. Limiting your best content only to print is not likely to drive online subscribers to “pay their way;” it’s likely to alienate them.
While I’m on the subject, someone seriously needs to do some research in large markets to find out what print/Web readership overlap is like. Or, if that’s been done, if you could kindly point me that way, that would be awesome.
On a completely unrelated topic: I’m not dead, I just took the week off to go to New Orleans. So look for more updates soon.
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