Consumers don’t give a sh** why you’re pricing your digital subscription at whatever level it’s priced, they only care that the product is worth the price.

The N&R's new absentee owners have made it clear that their first priority is defending print circulation. JR and Jon Lowder ask some good questions about the wisdom of the new paywall plan.

The emphasis on paper is nothing new. The previous absentee owners brought in a circulation guy as publisher. That did not go well, online or off. Print continued to dwindle, and a decade after its brief moment of online glory the N&R does not have a good digital product or a strong digital brand. Management seems content to let whatever buzz builds around their stories happen on Facebook or other sites. Innovative ways of info-sharing and audience building are MIA.

We all understand the math that makes the vanishing print business desirable, and it's easy to say that nobody has cracked the reinvention code yet, so experiments are the only way to go. But why is the rear-guard strategy going to work in 2014 when it didn't work before?

And what comes next? Will BuffettCo invest the (hoped-for) print-circ dollars in more reporters to guard and grow its local news and info franchise? Will it use the (possible) revenue to hire editors who really understand digital media? 

Or will it just milk the old cash cow until it dies?

Meanwhile, they could at least make my paywall login work on an iPad.

Comments

[Lex]

Because defending print circulation has worked so well for them up 'til now.

[Fec]

The really tragic part is the unnecessary cruelty to which the employees are being subjected. They have some of the best reps and ad designers in the business.

[Billy Jones]

Alas, they are simply turning away readers. Already I've only 2 free articles to view for the next 30 days. Their mistake is in pricing online advertizing for less than print advertising simply because it costs less to produce. Since when has the actual cost of making a product determined its value? In advertising the value of the product is effectiveness and there's no proof that print advertising is more effective that online advertising for the same publication.

They cut their own throats then turn away eyeballs they could be selling to advertisers. Sure, that online ad costs less to produce but it has the potential to reach millions of eyeballs whereas the print ad is forever limited to that one day's circulation.

Turning away readers equals turning away profits. I'll find the news elsewhere, I'll link to someone else's newspaper. Not smart business.

[Ed Cone]

Prices may not correlate directly with production costs, but they do have to reflect what the market will bear, which is why pricing online ads the same as print ads would not have worked.

That still leaves the N&R with serious problems, including: diminished overall quality due to massive staff cuts; continuing downward pressure on print circulation; poor design and editing of the website; and, now, a flawed online pricing plan.

[Billy Jones]

Ed wrote: "Prices may not correlate directly with production costs, but they do have to reflect what the market will bear, which is why pricing online ads the same as print ads would not have worked."

What is the cost of a radio ad? What is the cost to produce a radio ad? The answer: dirt cheap in many instances. And yet radio doesn't seem to suffer from this problem-- why?

How does radio justify the price they charge for advertising? I know the answer. Radio is free to their users and continues to be profitable. How can that be?

When all you morons in the journalism industry figure that out then you'll figure out how to make online publications free to use and profitable.

The answer is a simple as Nielsen and yes pricing online ads the same as print ads would have worked if there were a reliable third party ratings system advertisers trusted.

How can you be so blind for so damned long.

[Billy Jones]

Speaking of buggy whips, you seem to be peddling them yourself Mr Business writer.

[Billy Jones]

Hell, even Roch Smith jr could develop the necessary code and a new industry could be born right here in Greensboro. Sites would carry a trusted badge and advertisers with accounts could log in and see the actual numbers. Then other advertising companies would be forced to use those numbers instead of numbers they create.

[Ed Cone]

It's hard to argue that newspapers have done a good job of adapting their business model to the internet, but I don't think your comments reflect the logic of ad pricing, the state of ad tech, or the current direction of online ad strategy.

[Billy Jones]

Ed wrote: "but I don't think your comments reflect the logic of ad pricing, the state of ad tech, or the current direction of online ad strategy."

You're exactly right and therein lies the problem-- they don't know what direction they're headed.

I've been both online ad buyer and seller. There is no trustworthy marketplace, everyone has different numbers for what should be the same audience. Publishers claim one metric, ad companies a second metric and advertisers a third metric for something as simple as inserting a line of code.

As an example: I look at my Blogger.com stats and I'm told I have 1000 page views but when I check Google Adsense I'm told I had 10 pageviews. But Blogger is owned by Google so what gives? Add to that Adsense is only going to pay me for clickthrus the advertisers don't protest and maybe I get 1 in a thousand. There's no trust built into the system. People pay for trust. You don't hand your credit card to a stranger unless that stranger is standing in front of a cash register or waiting on your table-- why would you trust your advertising dollars to be handed to someone you don't know? I buy Adwords and its the same convoluted experience only in reverse. Same goes for other well known online advertising agencies I've dealt with as buyer and seller.

And yet the Internet is a worldwide marketplace-- any local newspaper can potentially reach advertisers they could never interest in print ads... if they only had that trust.

Until honest metrics can be worked out via a 3rd party rating system agreed upon by all parties involved prices will remain rock bottom. Radio and TV learned this many years ago, thus the Nielsen Ratings. When major online publishers come up with an online equivalent to the Nielsen Ratings online advertising rates will soar.

Now if you can't comprehend that then you have no business writing about business.

[Jon Lowder]

Thanks for the mention Ed. As I've said many times, we need someone to fill the role that newspapers have traditionally filled in our communities, but every time they do something like this I get the feeling it won't be the papers themselves.

[Ed Cone]

Web-native businesses (e.g. Facebook) are doing pretty well with ads.

News orgs have to figure out how to overcome the unbundling of their traditional product mix, and the economics of their new delivery system. Maybe it will take a web-native company to figure that out.

[Andrew Brod]

Some non-"Web-native" businesses are doing okay as well: TV stations. Their business model never involved paywalls or subscriptions, and have always focused exclusively on attracting eyeballs. WRAL's website is a go-to source these days, and it was clear that the station understood its opportunity when it hired Mark Binker away from the N&R.

[brian]

The instituting of the paywall is the last breath for the N&R. I went to the website to read the news (no matter how slowly it loaded) and I saw ads, but I won't pay for a product that I find marginally appealing at best. I already cobbled my news from multiple sources, this will be just one less source I use. Their loss - TCB, YW, RT and others will gain - I hope.

[Roch]

It appears as if the News & Record is attempting to throttle access to its site with the use of a cookie. It is called tncms-experimentalTracker-views which stores as its value the number of article viewed and expires a month after its creation. It can be defeated (e.g. one can get bypass the 20 article limit) by deleting or editing the cookie. Easy to do.

To me, this is yet another example of the lack of technical sophistication at the News & Record (right up there with requiring users to download the Facebook tacking cookie in order to view comments). Between this deficiency and the others noted above, I don't think this paywall strategy is going to improve the News & Record, experientially for users or financially for the organization.