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In 2009, the News decided that it was almost impossible to make money from digital ads. “The people we hired to sell advertising on the Internet just never did very well,” the paper’s then-publisher, Albert “Buck” Sherman, told Nieman Journalism Lab. So the News took an unusual step: print subscriptions were priced at $145 a year, print/online combos at $245, and online-only access would cost $345.
In other words, by forgoing the paper, a digital subscriber was on the hook for an additional $100. And Sherman wasn’t coy about the rationale: “Our goal was to get people back into the printed product.”
Some online-only content, such as videos and blogs, is outside the paywall; the same goes for columns like “Clergy Corner” and “Advice on Pets.” But anyone who wants access to the electronic edition, which reproduces the day’s paper, must pay. The company also operates a free site, newportri.com, designed to appeal to tourists and others looking for recreational or entertainment information.
In early 2011, the News dropped the price for print and online to $157, or a dollar a month above the print-only fee. But online-only access remains at
$345—a price that current publisher William Lucey III says, in an interview, “is more of a deterrent.” The amount was based on a scenario in which,“if everyone wanted only a digital product, this is what it would cost.”
The paper’s site, newportdailynews.com, gets around 80,000 visitors a month. Especially with online ad rates “dropping 20 percent a year,” that’s not enough to sustain the operation, which includes a newsroom of twenty-two people, Lucey says. Indeed, online ad revenue accounts for only 2 to 3 percent of total advertising for the paper.
After the change was put into effect, “our single-copy sales went up about 300 a day”—a bit less than 10 percent of overall single-copy sales. As the economy improves, “print is coming back. February  was up 35 percent over last year” in ad sales.
And even with AOL’s free Patch site moving into town, Lucey says there are no regrets. “We found our comfort zone, and we stopped agonizing about it.” AOL, which launched the Patch site in Newport in July 2010, is sanguine: “The Newport Daily News does great work and has been a staple in Newport County for generations,” says spokeswoman Janine Iamunno. “There is room for all of us.”
So, which approach is best, free or paid?
Pay proponents often put it this way: High-quality journalism costs a great deal to produce, so users ought to pay to get it. Pay opponents have a counterargument: Paywalls cut sites off from “the conversation” online and will deprive them of the attention they need from blogs, aggregators, and social media.
We prefer to frame it as a business issue—and in that respect, it’s possible that neither side has it exactly right. In fact, pay plans may have little immediate impact on sites that are just getting into the business. The reason is that most companies are likely to have only small streams of online circulation revenue, which could roughly match advertising declines from lower traffic. Digital subscriptions may pay off in the years to come, but only if media companies can persuade consumers using new platforms—like smartphones and tablets—to adopt a pay plan.
Even before the Internet, subscription revenue didn’t amount to much for most news organizations. Print publications often underpriced subscriptions because they believed they could lose money on circulation and make it up on advertising from larger audiences. Broadcast TV and radio were free, and fees for cable stations like CNN are buried in bills that make it impossible to discern the true costs of content. So in the old world, Americans weren’t used to paying much for news; in the digital world, news organizations have spent fifteen years training their consumers to be freeloaders.
As a result, most people are happy to pay nothing at all for news, even as they have come to accept paying for other forms of digital content. A 2010 study of 1,000 adults commissioned by AOL showed that about four in ten people pay for “online content”—but that was a broad definition, including music and video.