Back in 2009, the Newport Daily News made headlines with its announcement that the paper would pull all its stories off the standard HTML-based Web and make them available only to paying customers – and only at the steep price of $345 a year for digital access, more than double the $145 charge for print subscribers.
So how’s the experiment going? Columbia University’s Graduate School of Journalism offered this update in “The Story So Far: What We Know About the Business of Digital Journalism,” a high-profile report released last week:
And then there is the Newport Daily News, a 12,000-circulation newspaper in Rhode Island.
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.” …
There is, in some publishers’ pay plans, an aura of frustration over the inability to convert large online audiences into advertising revenue. Moroney, of [A.H. Belo's] Dallas [Morning News], is simply being more candid than most when he notes that much of the News’s online ad space goes unsold, and so a cut in traffic to the site will have little financial impact. Others, such as Albert Sherman of the Newport Daily News, frame a paywall as a way to protect the print edition, but some print circulation has already been lost because of free alternatives.
The entire “Story So Far” report is well worth a read – there’s a lot in there about A.H. Belo, too, though as above the focus is on the Dallas Morning News.