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Why It Matters That the Morning News Failed at Paid Content

When I read this morning that the Dallas Morning News is giving up on its “premium content” experience  (which it launched last fall), my first reaction was to think “they’re still offering a premium content experience?” I have a subscriber’s log-in that I could use to access the site, but many months ago I stopped bothering to do so because the time it took to type in the email address and password wasn’t worth the payoff.

I wouldn’t do as the Morning News’ own story today has done and categorize this experience as a failed attempt at premium content. I’d instead think of it as an “incomplete,” given that there wasn’t anything terribly “premium” about the Morning News experience.

There wasn’t any bonus, subscriber-only content. All it meant was seeing the site via a drab design that made the homepage a grid of Pinterest-y tiled photos, and when it first launched the navigation was a disaster. It was difficult to access any story that wasn’t immediately presented in that photo-centric grid. While they have made improvements since then, it’s still much easier to move about the site on the non-subscriber version — even with the annoyance of ads that subscribers can avoid. So why would anyone pay $11.96 a month for a lesser experience? It seemed not much of an incentive for print subscribers to stay print subscribers either.

Apparently it wasn’t, which is why they’re giving up after less than a year. This should concern all of us who believe in the importance of a healthy news media to the life of thriving city. We should applaud the Morning News for having tried something new because something new has got to be tried. The solely advertiser-supported model of online media isn’t working at a scale that will support any organization throwing as much manpower and as many resources at a story as the Morning News can today.

As significant as has been the growth in online revenue for outlets like the Morning News (and for D Magazine), we wouldn’t be able to finance our operations without print. Which is why the decline in newspaper print readership is so concerning for the industry.

From a free-press perspective, the Internet is a marvelous thing because it affords nearly anyone a printing press of their own. From an ad revenue perspective, the Internet is a dastardly thing because it affords nearly anyone a printing press. The online pie is having to be divided far too many ways, resulting in ad rates that can’t sustain a large, profitable news-gathering business on their own. And that’s not even factoring in the way sites like Google and Facebook skim huge chunks of the potential revenue off the top.

We have to get readers to pay for the content they want. We’re going to have to. I doubt greatly that the Morning News, in ending this experiment, has completely abandoned that fact. They’re just going to look for another means of doing it. In which case, I have a proposal.

Right now most of the World Wide Web is like over-the-air broadcast television, freely available to anyone with a computer and an ISP (the equivalent of a TV and an antenna.) I think the problem with the model that the Morning News has just given up on, and which newspapers like the New York Times have also attempted and abandoned, is that they’re asking readers to take a channel that they had been receiving for free and to pay for it like it’s HBO, a premium service.

Newspapers are, at best, basic cable. If you lost access to Bravo, you’d probably adapt quickly and just end up watching a lot more A&E. Likewise, if you’re cut off from the New York Times, you’re just switching over to the Washington Post. So that’s the approach that needs to be taken: a bundle rather than an a la carte selection. All of the country’s major news outlets would have to band together online under a single programming package for which readers would pay a unified monthly fee. The key is that it’d have to involve such an overwhelming chunk of North American news outlets that readers would have no choice but to pay for the access if they want to consume the content. Unless a reader has no other way to get at the news, they’re aren’t going to pay up.  (So, yes, we’d have to confront how to handle aggregation by other sites, like Buzzfeed and the Huffington Post. Maybe they’d be invited to the table too?)

Totally unfeasible, right? Given how many corporations are involved, how they’re are bound to be disagreements about how revenue should be shared, and the technical hurdles involved in setting a one-size-fits-all paywall across websites developed on many different systems, probably.

But how about a local experiment? The Morning News and D and the Star-Telegram and the Observer and all the local TV stations should create something like a Dallas-Fort Worth Online News Network, work together to create a paywall structure for all the sites, agree to a revenue split that’s based on average traffic of each, and give it a shot. Invite along the smaller outlets too, like the Star Community Newspapers. None of us individually has a monopoly on Dallas news, but collectively we do.

How much would you pay for monthly online access to Dallas-Fort Worth news? That’s worth something, isn’t it? I mean, if you’re forced to pay up (and, in this case, that’s what we’d be doing.) Readers who still want a la carte offerings can still watch the local news broadcasts or pick up D or the Morning News on newsstands.

We’d reach an agreement to do this for a set period time, but it’d have to be an all-for-one, one-for-all proposition. It’ll implicitly teach readers to place some monetary value on the local news. Which is what we must do. So, Morning News folks, have your business people call our business people.

 

(N.B.:  This harebrained proposal is entirely of my own concoction. It is not one of Wick’s harebrained schemes that he’s asked me to back-channel to the Morning News via a seemingly tossed-off blog post. If you’re wondering what I stand to gain from any of this, besides the potential for a sustainable and healthier media job market, I’m sure Wick and I can reach an agreeable commission structure for my contribution.)

34 comments on “Why It Matters That the Morning News Failed at Paid Content

  1. The price point was all wrong. Make it $11.96 a year instead of month and it’s a no-brainer even if the content is meh.

  2. The Department of Justice’s Antitrust Division would probably frown on your proposal.

  3. Well, that sort of collusion seems like an interesting and anti-competitive use of market power. IJS.

  4. I’m glad to hear they will be trying to improve the mobile site. I am an online newspaper junkie and use a lot of mobile newspaper sites. The DMN mobile experience is by far the worst that I have encountered.

  5. Jason, a few more thoughts on this, based on what I know of internal discussions the News has had before and during the premium site launch:

    • It’s hard to know what lessons were learned by The News because so much of what went wrong here was a result of disorganization instead of strategy. The central question the premium site tried to answer — would people money for a better web experience (what they internally called a “velvet-rope experience”) — was never answered because that experience never materialized. This was partly due to the suicidal timeline the project employed (which caused all other digital projects current and future to be neglected) but also because some elements were never rolled out. The experiment was supposed to have three components (what Dyer would often call “three legs of the stool”): 1) a better looking site; 2) one with little-to-no ads; 3) one that offered significant subscriber perks. The third part — which was Dyer’s responsibility — never really happened. They imagined offering Christmas card photos taken for you by Pulitzer-winning photogs, or game-watching parities with beat writers. They ended up offering T-shirts. That was part of the problem. The other:
    • The marketing/sales folks who were effing this cat never got newsroom buy-in. Top newsroom folks were against the premium site from Day 1. Once the premium site went live and starting siphoning traffic (not much, but some) from the basic site, the newsroom freaked. Understandable, since you were diluting the newsroom’s only real measure of success. And even if you think big gray corporate newsrooms need disruption, you’re not going to convince them when your efforts fail spectacularly. The number of non-subscribers who actually came to the premium site, looked around, and said, “I’ll pay for this” was “a fingers-and-toes” number, I was told today.
    • The News is not thinking right now about how to squeeze more money out of subscribers. It’s just trying to find a way to reach a mobile audience so it can THEN figure out how to then monetize it. The mobile efforts to which Dyer refers is just a mobile version of the premium site — I know, I know, at least this time everyone will get it for free. But there is a comprehensive, integrated (advertising/newsroom/marketing/subscription) strategy being put in place for a mobile-first platform that should start rolling out this fall and continue for a few years. It’s another valiant effort by the DMN to be nimble, to figure this new-media landscape out before it kills them. But first …
    • They have to do what Dyer wrongly says they’ve done: Take valuable lessons from their failures. The DMN learned NOTHING from this it didn’t already know. The paper learned it with its paywall, and its tablet app, and when it tried to charge for high-school scores: People won’t pay for content that is ubiquitous, and the newsroom will (perhaps rightly) sabotage any effort that doesn’t get its reporters the biggest audience possible.

    Which gets us to your proposal, Jason.

  6. Dad gum guv’ment.

    I know, I know, valid objection. I thought about the possibly problematic collusion, but I didn’t care to get it into it in the post since all the rest of it is complicated enough to make it a longshot anyway.

    But the bottom line is that I don’t think any of these outlets is going to pull this off on their own. If there’s no means of doing it within the government’s good graces, then I’d beg some outside company to come up with the paid-content system and to get every local media organization on board.

  7. I actually think this is a case where the law hasn’t caught up with technology. Under current FCC rules, yes, big problem. But should it be? I’d argue no, not when every single government agency or business is today it’s own publisher — and usually enjoys a larger audience than any regional newspaper. I think the idea that the MSM can unduly influence public opinion is a relic, one that is becoming increasingly proven wrong by social media and govt/corps acting as their own publishers.

  8. I have always looked at the subscription price of a newspaper or magazine as being the cost of the paper and delivery of the print product. I do not know if that covers it or what % it represents. The advertising would then pay for the content.
    The internet allows for a “no cost” delivery system without the cost and upkeep of transmitters and towers that local radio and television stations have. It also allows traditionally print news sources to have immediate coverage to compete with radio and tv.
    Once you make it past the cost of delivery it is up to the quality of the content to attract readers.

  9. What you misunderstand is that we can’t charge anywhere near what we get for print ads for online ads because, as I mentioned, the advertising pie is split too many ways. Plus we’ve got a couple of our key deliverymen (Google and Facebook) helping themselves to a massive cut before the reader even gets to us.

    The disparity also exists despite of, or actually partially due to, the fact that online we have data demonstrating precisely how many eyeballs viewed our content, whereas in print….we make a good guess.

  10. Whatever happened to that “competition is the life blood of all businesses” crap we’ve been hearing all our lives? Have we finally reached the understanding that it’s nothing but bulls**t spoon-fed to us by BIG businesses whose monopolies are indentured and protected by an army of well-paid lawyers and politicians? Because that’s what you’re talking about, right, creating a news monopoly? Here’s the beauty of free enterprise: you guys may create a “company store” outlet, but if we don’t like it, WE’LL MOVE. Welcome to the twenty first century!

  11. Exactly my view. The framers only understood a free press as operating in a hyper competitive entrepreneurial ecosystem of information, with the reader in the driver’s seat, “voting with his penny” to reward or punish those presses he found believable or not. Now, in order to hang on to their paychecks, you see otherwise credible journalists arguing for the licensing of official journalists — the Soviet model — or for “non-profit” journalism, which makes about as much sense as non-profit used car lots, or, as you correctly perceive above, even more monopolized journalism. Just think if the steam engine industry had been able to pull that off, we might still have them! See my comment above. See my book, “The Dunking Booth.”

  12. There’s nothing wrong with a-la-carte service, which is what the music industry moved toward with iTunes and where TV is moving to post-cable.

    Instead of bundles or whatever you suggest, I’d be happy paying 99¢ for a story I really want to read, like the scoop on Alamo Drafthouse opening in the Cedars.

    Make it easy and seamless to pay for the story you want to read (no password every time, just click to confirm) and done.

  13. The issue with that is anyone who didn’t want to pay for the original post featuring that news could very soon have gotten the information on another site that might not have been charging for it. And there’s no way we’re getting $0.99 per article. Unless you only very rarely read news content each month, you’d be much better off with paying a monthly full-service charge (like $11.96) than paying that much per read.

  14. That’s the one they hate. They always want to say to the reader, “Well, instead of this ‘best writing’ thing, how about a free white pages phone book app?” because they can do that one.

  15. It seems quite simple. Offer the highly-advertisement laden version free. Perhaps delay the front page news (like D Magazine offers the print version first, then the articles become later available online). Web-only. Then, there is some price point at which people will pay for a non-advertisement, web+mobile+alerts news venue. What’s the price point? Dunno. Not $11.96 per month. Is it $11.96, as your commenter jdruebert suggests? Maybe. Seems fair to me.

  16. I spend a lot of time looking at what drives traffic to our site and to other sites. It pains me to say it, but online, it is usually not the best writing that wins eyeballs.

  17. I think the problem is an antitrust concern relating to pricing. What you are describing, in economic terms, is called a cartel. Competitors agreeing not to compete with each other on price is a big no-no. The DOJ antitrust division and FTC (not FCC) would be all over it.

    If you need a good example of how the DOJ might view the price impact of publishers who get together to potentially prop up their failing business model, check out what happened to Apple and the book publishers. http://online.wsj.com/news/articles/SB10001424052702304444604577337573054615152 (I offer no opinion concerning the DOJ’s actions or any of the involved parties’ positions).

  18. What you’re proposing is very similar to the relationship between banks and credit/debit payments networks, where the publishers are the banks, your subscription platform is the card network, and readers are the merchants/cardholders.

    MasterCard and Visa were bank-owned associations until their respective IPOs in the late 2000s. Visa Europe still is. Having a third-party running the subscription platform facilitates a basic business function without infringing on the competitive aspects that make each publisher unique.

    And if the third-party platform was owned by a collaborative of publishers, subscription revenue would be shared among the content creators without having to give a cut to an unaffiliated intermediary. Plus, dividing the revenue based on traffic ensures competition among publishers to create the best content.

    Of course, merchants don’t have to accept credit cards and consumers can always pay with cash. The corresponding “cash option” would be to provide users with the option to only subscribe to content from one publisher.

    Just like the issuing banks incentivize us to use their cards with loyalty and rewards programs, the subscription platform could offer tiered pricing for access to content on the metropolitan, state, regional and national levels that provides more value the higher up you go — kinda like the way cable companies price their bundle packages (Fios charges less for its “triple-play” TV/Internet/VoIP package than it does for TV/Internet alone).

    In another payments parallel, some of the country’s biggest merchants are developing their own mobile payments platform through a Dallas-based collaborative called Merchant Customer Exchange. When MCX launches its technology, there will be a common mobile wallet app, and merchant-specific apps will also leverage the MCX electronic payments technology.

    If companies like Walmart, Target, 7-11, Brinker, Southwest Airlines and many others can be member-owners of MCX, it seems like a ubiquitous subscription platform for publishers wouldn’t run across collusion/monopoly issues. And if you take it a step further, don’t (or at least didn’t) the DMN and Star-Telegram have a content sharing deal for North Texas sports coverage? That seems more anticompetitive than a mechanism to ensuring publishers get paid for the content they provide.

  19. Best writing is far too narrow. We should say “Best work,” which would be best writing, best editing, best photos, best page design (very important), not to mention best promotion, ad sales and general publishing, but always with this in mind (read my book): Americans from the beginning have wanted to be out on the field of battle themselves, making history, smelling the cordite, maybe taking a little blood spray on the cuff, and that’s the show they come for in the press. In order to take them there, the press must be a player in history, a combatant out on the bloody field, making things happen. It never occurred to the founders that press would be professional or even terribly responsible. They saw the press as inheriting the role of the unruly revolutionary mob out on the cobblestones with torches. Jefferson talked about how power and privilege must always be forced to walk through an excoriating wall of fire if democracy is to escape the choke-hold of aristocracy. That’s the role the press used to fill when it was truly free, meaning truly competitive. Now that role has been seized by commenters online. They draw audience because they are hot. Mainstream media lose audience because they are not.

  20. And if you are talking about photos of hot looking fantasy partners, sure, that’s tried and true. We share a lot with Vaudeville, when we’re good, because we know we need a good show to fill the seats out front. By the way, that;s one reason your founder and publisher is still in business when so many of his peers are not.

  21. I don’t agree with your implication that if the press reverted to the hyper-partisan gossip rags they were in the days of the Founding Fathers that the country would be better off. Nor do I believe that’s anything readers online are going to pay for, since they can read any YouTube comment thread (as you suggest) and digest much of the same swill. Everybody’s got a printing press online.

    That said, has the press lost some of its vitality since moving from being a rough-and-tumble, blue-collar trade to become a white-collar profession? I’ve no doubt that it has. Could the mainstream media stand to up its game? No doubt. But I’m convinced that there’s a structural flaw in our model of financing online news — we’ve taught a generation of readers that news isn’t worth paying for, not even the $1 they might shell out for the same information on sheets of papers.

    (And you’re not going to win me over citing that duplicitous coward Thomas Jefferson. He talked a big game, but he never lived it himself. He was an aristocrat.)

  22. Sorry about Jefferson. I guess we have an issue there, eh? You see the press as more professional. I think that’s a little aspirational. We’re all still pretty much worker bees as far as I can tell. Anyway, you and I are not where the big things happen. The big things happen on the golf course when the publisher is out there with the powers that be. When they jump on him or her for running those stories about money missing from the opera guild, he can tell them he has to give the readers the truth, much as he hates doing so, because if he doesn’t those unscrupulous bastards across the street will tell them the truth just to get ahead of him. In a non competitive environment, a a local print monopoly, for example, those stories are dead before he hits the showers. The closest thing I have ever seen to integrity in the news business is competitive anxiety. And by the way, whenever I hear the word “professional” tossed around in our craft, I smell boredom coming.

  23. I don’t believe the collaborative online partnership I’m floating is a monopoly the same way that you mean it. Each publisher remains independent of the others. They still compete for traffic, to gain a larger piece of the shared revenue pie. The only agreement being made is that all will place their content behind the same paywall.

    As for Jefferson, yeah, don’t get me started.

  24. For some reason the email they sent announcing this had the subject line: Premium Site Update and not the more fundamental truth of: Total Fiasco. That said, I am enjoying the digital access to the Washington Post they provided.

  25. I do understand the difference in the rates for print and online as well as the actual views versus the good guess. The online content will be there forever with current advertising and available to a much larger market if the content is relevant and interesting.
    In my opinion, the newspapers and news magazines in this country made the mistake of choosing to be political in their reporting instead of being investigative and unbiased. Credibility is what they used to sell but once that is lost, who will pay for someones slanted opinion?

  26. It is an incredibly simple concept: create content worth paying for. I pay $20 a month for the New York Times without blinking an eye. Their content and enterprise reporting are worth every penny. The Wall Street Journal has had a paywall for decades and does quite well. Why? Because their content is worth paying for.

    The Dallas Morning News has cut content and raised prices consistently over the last 20 years. When I can get everything they do elsewhere on the Internet, why should I pay them for it?

  27. Except the NY Times is going through the same woes the DMN is going through, with revenues shrinking. Fewer and fewer people are paying for what it does, too.

  28. OK, you all left me way behind somewhere in your discussion of technical journalism matters and Jefferson. Which happens. Like interpretations of “Dallas cuisine”, “best writing” means something different to everyone. Some like Rosemary Rogers, some like Doris Kearns Goodwin. The best publishing endeavors embraces both. It’s been that way through history. Look at what radio did to magazines back in the first third of the last century. Yet somehow they adapted and survived.

    So because I know very little about the subject, it seems that the dimension to advertising that is an advantage to online publishing is the element of time. Unlike a printed paper, the advertisements can be swapped out after a number of “views”. So there is my penny’s worth of logic.