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Newspapers’ free online content gives readers what they want, brings needed revenue boost

Newspapers’ free online content gives readers what they want, brings needed revenue boost

Today newspapers are finding new ways to compete and rethinking what it means to scoop the competiti
Newspapers’ free online content gives readers what they want, brings needed revenue boost
Mark Robarge, online editor for The Daily Gazette, updates the newspaper&rsquo;s Web site, dailygazette.com, from his desk in the paper&rsquo;s newsroom Thursday morning.
Photographer: Marc Schultz

Not so long ago, in the fiercely competitive world of journalism, newspapers fought for scoops, stories reported fast but held secret until press time in the hope of beating the competition to print.

Today newspapers are finding new ways to compete and rethinking what it means to scoop the competition, as they publish online as well as in print. Increasingly, stories are posted online before they appear in print and are available to readers without charge.

The changes respond to new technology but also reflect a business environment of weakening circulation and declining print advertising revenue.

“We’re trying to find a new avenue of revenue. The [free] Web site’s business model is revenue from advertising,” said Daniel Beck, general manager of The Daily Gazette.

The Daily Gazette launched its free Web site, dailygazette.com, in December, about 41⁄2 years after launching its paid subscriber-only Web site. The subscription Web site was, itself, a revision of The Gazette’s original online venture, a free Web site launched in 1996 that contained virtually all of each edition’s news.

The current free Web site features some but not all of the stories available in the printed and paid online editions of the newspaper. The free site also features additional content, including breaking news updates during the day.

The Gazette joins other daily newspapers in the region in creating a free Web publication.

Patti Hart, general manager for timesunion.com, said the Times Union has had a free-content Web site since August 1996 and has continually experimented with expanding it.

“The bulk of the newspaper is online as well as other content,” Hart said. “We started with stories from the newspaper and we added additional content like an interactive calender online [and] a database about high school sports.”

Conditions changing

The changes locally parallel similar developments across the industry and come at a time when business conditions are changing for most news organizations.

Six daily newspapers in the greater Capital Region, including The Daily Gazette, reported year-over-year losses in average Monday through Friday daily circulation to the Audit Bureau of Circulations last year for its September preliminary “Newspaper FAS-FAX” report.

Money spent for ads placed in U.S. newspapers in the third quarter of 2007 totaled $10.1 billion, down 9 percent from a year earlier, according to the Newspaper Association of America. NAA figures also show print ad revenue declined in six of the preceding seven quarters.

Conversely, 2007 third-quarter advertising revenues for newspaper Web sites grew by 21.1 percent to $773.1 million, marking the fourteenth consecutive quarter of double-digit growth for online newspaper advertising since the NAA first began releasing the figure in 2004.

Despite the growth in online advertising revenue, combined print and online advertising was down 7.4 percent from the third quarter last year, NAA numbers show.

NAA Digital Media Manager Beth Lawton said the rising and falling fortunes of online and print advertising revenues has many in the newspaper industry wondering if and when the two might meet to break even.

“We’re certainly heading in that direction because, online advertising revenue is growing at such a huge rate,” Lawton said.

A Scarborough Research random digit dial telephone survey of the Times Union’s readership, released to the ABC in 2007, showed that timesunion.com over a 30-day period contributed 30,387 non-print readers, a 7.9 percent total readership increase, to the paper’s estimated 412,939 readers within what it considers its coverage area. According to the survey 102,253 print readers in the paper’s coverage area also read the paper online.

Hart said timesunion.com is a profitable source of revenue for the Times Union. She said the Times Union decided to submit online information to the ABC’s September report, the first time the ABC published online data with its circulation figures, to show the combined audience of the paper and the Web site.

Some hesitation

For industry veterans, the idea of “giving away the news” for free online after charging for it for generations has been an adjustment. Saratogian Managing Editor Barbara Lombardo said there were initial fears that free online content could hurt the print circulation of her paper.

“That had been the philosophy years ago. Our newspaper company, like a lot of newspaper companies, was concerned about hurting ourselves, but our company like a lot of companies has woken up to the fact that readers are turning to the Internet for information,” Lombardo said.

Daily Gazette Online Editor Mark Robarge, who was previously online editor at the Observer-Dispatch in Utica, said he saw this hesitation in the Daily Gazette’s reporting staff during construction and testing of the Web site this past autumn, but it quickly passed.

“I think a newspaper Web site should supplement the traditional product, not replace it,” he explained. “If done right, it should not only draw people to the Web site who wouldn’t otherwise read our paper but also provide immediate and more in-depth reporting for people who already read the paper. When the reporters saw that, I think they saw that the Web site can give them ways to actually improve their reporting.”

In the third quarter of 2007, more than 59 million people, 37.1 percent of all active U.S. Internet users, visited newspaper Web sites, a 3.7 percent increase over the same period a year ago, according to data from Nielsen NetRatings.

When The Daily Gazette converted its free Web site to a paid subscription Web site in 2003, many newspapers were still trying to determine how the Internet could be used to expand readership and revenues rather than cannibalizing them. Many newspaper Web sites have offered a blend of free and paid content. The New York Times Web site, initially free, switched in 2005 to a hybrid of mostly free content with columnists and archives available only to paid subscribers, but then switched back to entirely free again last September.

On Dec. 13, Dow Jones & Co. shareholders voted to approve News Corp. Chairman Rupert Murdoch’s $5 billion bid for ownership of the company, which publishes the Wall Street Journal. Prior to the acquisition, wsj.com had for years been one of the few news sites globally to successfully introduce a profitable subscription model, with about 1 million subscribers, generating about $50 million in fees.

“We are studying it and we expect to make that free, and instead of having 1 million [subscribers], having at least 10 million to 15 million in every corner of the Earth,” Murdoch told the Associated Press in November.

Murdoch said he believes that a free model, with increased readership for wsj.com, will attract “large numbers” of big-spending advertisers. Since the acquisition, most of the Web site’s content has been made free.

Beck said some company officials at the Daily Gazette believed even in 2003 that eventually a free online presence would be needed again.

“The biggest thing the Web site is offering [the Daily Gazette is the chance to] become a 24/7 news operation,” he said. “Now we have stories going up live throughout the day. That’s how we need to compete with other media sources in this market.”

Some newspapers, long used to hoarding information until press time, have converted to live Web news updates only after overcoming the fear of “scooping themselves” by posting breaking news stories online before printing them.

Choice of platform

“In the beginning, I think it was funky to everybody, but I think we’ve come to recognize this is about delivering the news on the platforms that people want. It’s about preferences,” Times Union Managing Editor Mary Fran Gleason said. “If some people prefer to get their news online, we’ll give it to you that way. If you prefer to sit down with paper in your hands, we’ll give it to you that way. The Web site edition is us just as much as the printed version is us.”

Patricia Beck, publisher of the Gloversville-based Leader-Herald, said her newspaper’s corporate owner, Ogden Newspapers, has outfitted its newspapers with free Web sites for several years.

“The discussions were always concerned with where the industry was going and making sure that, no matter where our community was choosing to get its news, that we would be the source that they would look to,” she said. “There is no generation [gap] to the Internet now. I think that the senior citizens as well as the young people are learning to use it.”

In 2007, Ogden Newspapers launched a companywide initiative called the CU See You, an Internet social networking concept that links its newspaper Web sites to Web pages where digital photos taken by newspaper photographers can be viewed and purchased.

“We’re beginning to take off quite nicely with the revenues we’re generating online,” Patricia Beck said. “We’re a smaller community newspaper but we have an average of 7,500 unique visitors [to our Web site] a day.”

Lombardo said the Saratogian’s parent company, the Journal Register, recently invested in upgrades to its Web sites to enable video clips to be played and provided digital video camera equipment and training for staff members.

“All the [Journal Register’s] newspapers have added a position of Web editor and for a small newspaper to have someone with that title, I think, speaks to the importance of the role of online news,” Lombardo said.

Lawton said new types of media being made available on newspaper Web sites, including delivery of that media to mobile phones, is one of the major newspaper industry trends the NAA has identified going forward.

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