Paywall blues: Denver Post running on empty?
It was the road the Digital First CEO hoped never to travel
It’s hard to tell whether it’s an act of desperation or simply a major reality check, but whatever the case, the Denver Post is soon going to a paywall.
What makes this particularly newsworthy – beyond the fact that many thousands of Post online readers would now have to shell out cash to read the product — is that Digital First Media CEO John Paton, whose company manages the Post, has been an adamant opponent of paywalls.
He has called paywalls the business of “stacking pennies.” Now, if it’s lucky, the Post will be stacking — and counting — your pennies, which would soon begin to look a lot more like your dollars.
The Post will roll out the paywall on Dec. 2. After a one-month trial period, digital subscriptions will start at $11.99 monthly while print and digital access will cost $5.50 weekly.
It’s another shock, certainly, at the Post, which recently suffered yet another round of layoffs (a situation about which I know far too much) and saw the retirement — was it a forced retirement, as speculated? — of longtime Post owner and publisher Dean Singleton. It could all be a coincidence, of course, but that’s never the way to bet.
In the Post’s story on the paywall, Denver Post CEO Mac Tully said, “This is a strategy that, quite frankly, is a long time coming. We keep forcing our subscribers to pay more for content and turning it around and giving it away free to everybody else.”
But that’s not the way Tully’s boss, Paton, sees it. Paton, who has said that paywalls are the lazy newspaper executive’s way out, announced the change on his blog. He likes to announce stuff on his blog — the forward way for a forward-thinking executive. But the announcement was a hard look back. The money quote: “We need more gas in the tank if we are going to complete this journey of print-to-digital journalism.”
More gas would mean, we assume, more money. Digital First — which is the second largest newspaper publisher in the country — had experimented with paywalls at various MediaNews papers and didn’t much like the results, or the money. Paywalls cut back on page views and, according to Paton, they haven’t provided much revenue. And yet, he’s now going all in, at least in the short term. There may be a few newspaper executives smiling as Paton has had to eat some digital-dime crow.
Paton has been an advocate of open access, getting the most possible online views, and finding a way to monetize the digital product across the Digital First chain. Apparently, it hasn’t been working.
He says digital revenues have climbed 89 percent over the last three years at Digital First, but 89 percent growth — when you’re starting at close to zero – hasn’t been nearly enough. Paton’s project was, as he put it, to stack digital dimes to replace the falling print dollars. This move can only be called a retreat, and an embarrassing one.
The conventional wisdom in the industry is that the critical mistake was made years ago, when newspapers decided to give away their content. Everything flowed, mostly downhill, from there. Yes, information wants to be free. But it also had to be paid for. And so, newsrooms have shrunk, bureaus have closed, and niche blogs have taken over many of the areas where newspapers used to dominate.
Now, after years of allowing free access, newspapers are moving as quickly as they can toward the pay model, with the expected resistance from consumers.
Digital First and the Washington Post were the major holdouts. The Washington Post went first — and then was sold. Digital First, with its 75 newspapers, doesn’t have the option of a Jeff Bezos coming to the rescue.
So, paywalls. It does sound a little like desperation.
“I do think long-term they can restrict audience growth, and that’s something we’ll have to be careful about,” Paton said, according to the Post story, of paywalls. But he says they are “a good, strong business initiative.”
In an interview last summer with paidcontent.org, Paton didn’t sound quite so enthusiastic about a paywall — which he calls “All Access.”
“All Access is nothing like a solution for our industry, but it could buy some gas in the tank to get down the road,” Paton said. “It is currently the rage in our industry because it doesn’t require you to think too much about the digital future you have to build – just what you might be able to charge your print customers today for it.”
As Paton said, newspapers’ resistance to change has been “aided and abetted by lousy CEOs and news executives who refuse to take the necessary risks to build this industry’s future.”
Denver Post non-subscribers will have to pay for access after a number of free reads — starting at 25 – per month. As you’re paying, remember that Post executives really don’t want you to do this.
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