“Free Costs Too Much”

1. “Free Costs Too Much” Rupert Murdoch

3. My goal is to urge you not to leave money on the table during this period of significant transition!

4. How much longer do you think your print subscribers will pay for something you give away free every day?

5. What if Starbucks said: Bring your own cup and we’ll give you FREE COFFEE everyday. How many people would switch to free coffee?

6. Why we changed to paid • Print circulation was declining. • Loyal subscribers were moving to free. • Page Views far exceeded sold advertising impressions. • Online ad rates were dropping rapidly. • Online ad revenue is way too low to pay for the true cost of content. • Professional content has value.

7. Our newspaper started a digital subscription model 15 months ago.

8. Stockton After One Year

9. When reading a newspaper website, what do people say they are doing??

10. “I’m reading the newspaper”

11. In today’s time starved world, fewer and fewer people come to our print newspapers for enjoyment. For many, we have simply become a distribution vehicle for information they can get much faster on the web and people under 35 feel….. Mobile devices are better!

12. Pew Research ‘State of the News Media 2011’ • 50% get news from TV

13. Pew Research ‘State of the News Media 2011’ • 50% get news from TV • 46% get news online at least 3 times a week

14. Pew Research ‘State of the News Media 2011’ • 50% get news from TV • 46% get news online at least 3 times a week • 40% from newspapers at least 3 times a week

15. Ipad News Consumption Survey What is the likelihood that a newspaper subscriber who uses an iPad says he or she will switch from print to digital in the next six months?

16. Ipad News Consumption Survey What is the likelihood that a newspaper subscriber who uses an iPad says he or she will switch from print to digital in the next six months? 54%

20. Newspapers Share of Ad Revenue

21. Some Good News…. The IPAD and IPHONE are changing the value perception. The same people who used to say content should always be free, are now willing to pay for content on IPHONES and IPADs. 99 cents is the new FREE.

22. Freemium Just enough free to entice you and then up-sell you to a paid version ‘Angry Birds’ built on this model.

23. We built our website using the freemium model: Only local content is protected: All verticals, generic content, event calendars and section fronts are free Some items require a subscription: Text alerts E-mail newsletters E-edition

24. Three articles per month free

25. Three articles per month free • Ten articles per month free with registration

26. Three articles per month free • Ten articles per month free with registration • Unlimited access with paid online subscription

27. Value is in the content, not the distribution method.

28. The basis for our pricing model There is more local content on our website than in print. Print only = $199 Online only = $219 Print/Online = $239 EZPAY/Online = was $182

29. A Variety of Pricing Models

31. Examples of our Free Online Content

35. What have we learned • Results are better than predicted

36. What have we learned • Results are better than predicted • Unique visitors declined only 25% and page views only 35%

37. What have we learned • Results are better than predicted • Unique visitors have declined only 25% and page views only 35% • Paid users are more local, increasing their value to advertisers

38. What have we learned • Results are better than predicted • Unique visitors have declined only 25% and page views only 35% • Paid users are more local, increasing their value to advertisers • Opt-Out better than Opt-In

39. What have we learned • Results are better than predicted • Unique visitors have declined only 25% and page views only 35% • Paid users are more local, increasing their value to advertisers • Opt-Out better than Opt-In • Print Impact – We don’t know, but total circulation is starting to grow

40. What others have learned • No one has reported losing ad revenue • 80% charge print subscribers extra & charging print customers a fee seems to increase online only sales • Ad rates on paid pages can be higher than free pages. • Press+ has about 30 papers online today • $6.99/mo. about the average price

41. You have to establish value • The world is going digital • This is just the first step necessary to survive in a total digital future • The worst thing you can do is nothing

42. According to Borrell Associates: In five years: Mobile will represent 64.7% of all digital revenue

43. Slovakia: All newspapers in the country joined together with one paywall. Users make one monthly payment for access to all Slovakia newspapers. Revenue is split based on paying customers’ page views on each site.

44. Our Current Focus: • Launch Daily Deals • Launch a Digital Agency business • Develop an App for tablet editions • Modernize our existing websites • Stop chasing verticals we have lost

45. Recommendations: • Figure out why people come to your site. • Provide a service. People pay for services. • Charge for content and services. • Experiment and analyze. • Market and promote constantly.

46. Stockton After One Year