While writing about the Patch business model, I noticed in Romanesko that the Sonoma Index-Tribune dropped its $5/month paywall after Patch opened up in its market.
That action pretty well crystallizes the challenges news organizations face as they move toward paid-content models in competitive information markets. And it suggests that many, or even most, will ultimately fail.
Although incumbent print media may have good reasons to try to get value for their content online, even if only to slow the erosion of their print products, other actors may not be so compelled. Companies like Patch are operating purely under the Axiom of the Audience Imperative, where they rationally will always seek any additional reader they can attract for less than the marginal cost of production and delivery. Since the marginal cost of serving one additional reader online is essentially zero, they will always tend toward free. After all, they have no interest in limiting their attractiveness as an advertising platform by charging for content and restricting their audience.
The only way to escape this imperative is to carve out a non-competitive niche. News outlets could, in theory at least, so distinguish themselves on the basis of quality or depth or timeliness or perspective or ease of use or some other dimension that they can effectively lift themselves out of the competitive fray and charge for access. The Wall Street Journal is probably the best example of this, with its unique value in the business world; the New York Times may have a shot, too, because of its high quality and depth.
And countless publishers are now counting on the unique value of their local news reports to pull off the same trick in their markets.
As someone who hopes they succeed, at least for a while, and who has indeed pushed down the same path, what’s discouraging about the Sonoma reaction is not that they caved, but that they caved so quickly and to such a weak competitor.
I’m not familiar with the Index-Tribune, but it appears to be a pretty typical small weekly, or twice-weekly in its case, with a paid circulation of about 8,000 and a sister lifestyle magazine. (It actually sounds similar to the Monadnock Ledger-Transcript, where I was publisher for a few years, before the paper absorbed the competing Transcript and added a second day of publication.) It has an editorial team of about six. It’s got a Town News-built site; nothing flashy but serviceable.
In September, the Index-Tribune started its paid content experiment. The numbers on Compete appear show a big hit to their traffic, cutting it by maybe a third to a half, but it’s hard to tell precisely, because of seasonal variation and the short time frame. In any case, Patch comes in less than three months into the experiment, presumably with its typical single-reporter staffing plus stringers, and the Index-Tribune throws in the towel.
The inescapable conclusion is that the Index-Tribune’s site and content was not sufficiently differentiated and irreplaceable in the eyes of readers.
Now it may well be that the Index-Tribune is not a very good paper and had no chance of succeeding with paid content, with or without Patch. Maybe all of its 8,000 print readers are just traditionalists who need to feel a paper in their hands, no matter how bad it is. Certainly their website is not as slick as the Patch site, which can’t be helping them in this battle.
But I suspect the Index-Tribune’s experience points to a more discouraging truth, one that will dismay publishers across the country in the months and years ahead, as they try to charge for content while facing an ever-widening array of free, community-based competitors: Our readers don’t love us as much as we think.
For most people, I suspect, general community news is pretty much a commodity. Journalists may see a huge gulf between established players and thinly reported news sites that rely on community contributions, but for many people the competitors are good enough. Readers may still respect and turn to the traditional outlets. But if there’s a free, “good-enough” alternative online, they are unlikely to pony up the subscription fee to support the old standby.
Sigh.
Even so, it’s probably still a good idea for print publishers to push ahead on paid content models. (As long as they do it wisely. And as long as they are prepared to act quickly if conditions in their markets change.) It certainly won’t help their web operations. But it may help to preserve their flagging print operations long enough for them to step smartly into the electronic future.
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