our-hometown, inc designing, building and deploying online business models for the newspaper...
TRANSCRIPT
Our-Hometown, IncDesigning, building and deploying Online Business
Models for the newspaper industry since 1997
Contact: Carl [email protected]
(315)294-591211/04/2010
Paywall Business Model
• Myth vs. Fact• A look at
implementation• Analysis of
outcome• Pricing Model• Conclusions
Why Implement A Paywall
• Create an immediate stream of new revenue.
• Increase number of paid subscribers.
• Return On Investment.
• Protect your content, it has value.
• Create new revenue generating opportunities.
Case Study: The Derrick, Oil City, PA - Overview
• TheDerrick.com includes News-
Herald edition
• Total print circulation 28,000
• Market 75 miles north of Pittsburgh
• Minimal market area competition
• Before paywall they cut/paste about
50% of content to their HTML website
• Little effort put into web ad sales
TheDerrick.com - Timeline
• September 2009 – The Derrick chooses
Our-Hometown Business Model, new
website designed and up within 21 days.
•October 2009 – Site goes live with no
paywall, but readers could subscribe.
•November 2009 – Our-Hometown
implements paywall model, over $100,000
in paywall revenue since.
Our-Hometown: The Process
• The Derrick sends a pdf of the paper to Our-Hometown Daily.
• Our-Hometown posts 100% of the news online in html format.
• Breaking news and updates are added by Derrick staff in between issues.
• Our-Hometown is responsible for hosting, maintaining, and upgrading the website.
Paywall Subscription Costs
3 Months
6 Months
1 Year
1 Year online upgrade
• $29.00
• $39.00
• $69.00
• $12.00
TheDerrick.com order analysis
TheDerrick.com order analysis
Order Length
6 Months20%
1 year45%
Manual Order10%
3 Months25%
TheDerrick.com order analysis
Order Flow
Pricing Model for online-only subscriptions at dailies
The Data
Newspaper LocationPrint C irc
Date paywall started
Price per month
for online-only
Online-only subscribers
Revenues **
Subscribers ***
thederrick.com Oil City, P A 28,000 Oct-09 $10.00 1,185 $5.08 4.23%
bendbulletin.com Bend, Oregon 32,946 2005 $8.00 1,200 $3.50 3.64%
dnews.com Moscow, Idaho 6,615 1999 $7.00 255 $3.24 3.85%
winchesterstar.com Winchester, VA 20,218 Sep-09 $3.08 * 1,628 $2.98 8.05%
gazettenet.com Northampton, MA 19,000 2004 $7.75 580 $2.84 3.05%
abqjournal.com Albuquerque, NM 95,469 2001 $12.75 1,750 $2.80 1.83%
dailygazette.com Schenectady, NY 44,000 2009 $11.80 855 $2.75 1.94%
messenger-inquirer.com Owensboro, KY 25,014 2006 $6.95 800 $2.67 3.20%
arkansasonline.com Little Rock, AR 185,792 2002 $9.99 3,500 $2.26 1.88%
themercury.com Manhattan, KS 10,500 2009 $12.89 150 $2.21 1.43%
limaohio.com Lima, Ohio 29,981 2009 $4.95 1,010 $2.00 3.37%
lmtribune.com Lewiston, Idaho 23,421 1999 $8.00 460 $1.89 1.96%
daily-journal.com Kankakee, Illinois 29,000 2009 $14.70 100 $0.61 0.34%
* - Website has two online-only offerings, weighted average price shown
** - Revenues measured as annual dollars per unit of print circulation
*** - Subscribers measured as the number of online-only subscribers as a percentage of print circulation
Demand
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
$0.00 $4.00 $8.00 $12.00 $16.00
Price of online-only subscription
Study of demand for online-only subscriptions at dailies
Myth: You’ll never get enough subscribers to be meaningful
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
0%
1%
2%
3%
4%
5%
6%
7%
$0.00 $4.00 $8.00 $12.00 $16.00
Rev
enu
e p
er u
nit o
f prin
t cir
c
Su
bsc
rib
ers
as %
of p
rint c
irc
Price of online-only subscription
Revenues
Max rev enue at $7.80 per
month
3.54% circ increase
$3.32/unit of print circ
Myth: Print subscribers will go online-only
If I charge the $7.80/month you recommend, that is less than the price of the print edition. I’ll cannibalize print and lose insert revenue and maybe more.
Myth: Print subscribers will go online-only
Oil City Derrick (28,000 circ daily)
1,185 online-only
Only 5 cancelled the print edition
Only 1 was in their delivery area
$69/year - ½ the price of the print
45% of online-only subscribers live inside their delivery area
Conclusions
At $7.80 per month for online-only access, dailies will add about 3.5% to total subscriber base with a paywall
Only minimal loss of print subscribers to online-only.
Initially expect a drop in website traffic
This is with HTML websites only; not PDF or Replica editions.