How Will Newsday Make Money Online?

Newsday, the NY tabloid-style newspaper, has announced that it will begin charging for access to its news online.   Meanwhile, sadly, the Rocky Mountain News is no more.  Other newspapers are in deep financial trouble — The San Francisco Chronicle comes to mind.  Paul Gillin and others chronicle the incipient demise of the print journalist on the blog Newspaper Deathwatch.  One of my follows on Twitter is the baby-faced The Media is Dying.  TMID’s tweets are a regular drumbeat, pounding out the rhythm of a seemingly dying craft. How will newspapers survive?

It all comes down to the online business model — a new one is needed.  A huge percentage of former newspaper readers now get the vast majority of their news online, for free.  Over the last several decades newspapers have held their own, with dips of course, through the emergence of radio and TV because newspapers could offer more in-depth coverage and stories.  But news delivered via the Internet is essentially the same product, for free. Meanwhile, while some newspapers have seen decent revenues from online advertising, I haven’t heard of any who can say it has entirely replaced both print ad and subscription revenues.  (Especially with the current economy.)

“Free” is hard-coded into the very fabric of the Internet.  It is inserted deep in the Internet’s DNA, rooted in the Internet’s non-commercial origins.  (If you can remember or have ever witnessed an old style “flaming” of a commercial interest during the early days of the Web, you’re nodding knowingly.)  Internet users expect Internet content to be free.

Some even resist paying for real things they associate with the Internet.  As an example, last week I went to the Boston Social Media Breakfast.  The first several #SMB’s were free to attend. They were sponsored.  But sponsorships are tough to come by these days so the event organizers decided to go ahead with the breakfast and ask attendees to pay for their breakfast — $7.00.  And some people still balked… and squawked.  (Unfairly I think, try and get breakfast for $7 these days, forget the terrific presentations and the networking opportunities.)

Do you remember the Kmart Tempest of ’08?  Chris Brogan and others received $500 gift cards to blog about shopping at Kmart before the holidays.  They did and told people it was sponsored blogging.  And still people squawked.  “This is the Internet — no making money!”  Sigh.

I’m a realist.  I’m a business person. I’m also a normal bargain hunting momma.  Free is good.  But if I want something, need something and I can’t get it free, I will pay what I think it is worth, or do without.  (I’d also like to make a living online.  Yes, I am conflicted.)  So how do newspapers survive in that environment?  I’m not sure that Newsday‘s approach is going to work.

My understanding of Newsday‘s online business is that it isn’t very strong to begin.  Visitors to the site don’t stay very long and they can certainly get the same or similar content somewhere else.  Why would they pay when they can get it for free?  Heck, even the Wall Street Journal and New York Times, prestigious papers with lots of unique content, have had their troubles getting people to pay for their content.

Today, every online business MUST use a multi-faceted strategy when it comes to monetization.  With the current economic woes, advertising alone probably isn’t enough but maybe you can build a positive cash flow other ways.  Maybe it is time to look at how online brands in other businesses make money.  Apple has managed to monetize music with 99 cent micro-payments.  Some small percentage of parents pay for subscriptions on Club Penguin — around $57 million worth when Disney scooped up the company.  Webkinz stuffed animals provide access to an online world and sell in stores for up to $15 — and have spawned a host of accessories.  Maybe newspapers should be thinking about things like:

  • Partnerships, sponsorships and underwriting
  • Virtual goods and currency
  • Micro-payments
  • Purchasable downloads (music, ringtones)
  • Coupons, gift certificates and specials  (See’s bargain restaurant gift certificates)
  • Associated real goods for sale — either through brick and mortar or online stores (I know the Boston Globe sells books and photos for example)

How do you think it will work out for Newsday?  Will newspapers survive?  Next up — The Kitchen Table survey.