Two Traditional Publishers Still Trying to Make Online Pay Off

July 2, 2012

I found it interesting that the Chicago Tribune is undergoing another online redesign. My father, who is now 91, wanted to use the online version of the Chicago Tribune. The Web site was essentially impossible for him on both his desktop computer and his iPad. Since the hard copy of the paper was no longer available in Peoria, Illinois, he gave up. The Tribune is now trying to do a combination of free and pay wall in an effort to generate revenue, buzz, and engagement. For the story, navigate to “Redesigned Chicago Tribune Web Site to Wall Off Some Content.” Please, keep in mind that the story can be blocked from public access at any time, so you will have to become creative to locate the story. Here’s the passage which caught my eye:

Registration soon will be required to access premium features such as columnists, reviews, in-depth and investigative reporting and new content from outside news sources, the newspaper announced Tuesday. All content, including premium content behind the new registration wall, will be free. Visitors who choose not to register will still have unlimited access to basic content, which includes breaking news, photos and videos.

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I can get local news from services such as Topix.com. Although not perfect, my father can click an icon and see information.

To add spice to the new service, the Chicago Tribune will be adding additional content. The new approach seems to be working. “Tribune Digital Signups Exceed Wildest Dreams” asserts:

Chicago Tribune executives are ecstatic over initial reaction to their digital membership program, the first step toward instituting a partial pay wall for online content. As of early Sunday, more than 22,000 readers had registered as digital members since the redesigned website launched at 6pm Thursday. [June 28, 2012]. The news item reported:

At some point in the future, those who’ve registered will have the option to pay for premium content, including material from the Tribune, the Economist and Forbes. Details of the pay wall plan will be determined by feedback from users…

The challenge will be to generate enough money to pay for the digital effort, offset losses in traditional advertising, and make up the shortfall from the fixed and variable costs which are dragging down traditional newspapers. Will the Chicago Tribune hit its financial goals? I hope so. I also hope that the company gets enough money to invest in the interface. My 91 year old father is not getting any younger but to win him back as a subscriber, the Tribune has to deliver a service which is usable.

The other interesting online play is the push in the hard copy Wall Street Journal for the online business information service Factiva. I thought that splitting up News Corp. would surface the Factiva property as a crown jewel. I think my hunch is justified. Factiva has been around in one form or another since the days of Dow Jones’s love affair with BRS search and a mind boggling desktop client which I first used in the mid 1980s. Factiva is essentially a collection of content available online for a fee. (The Tribune is moving down this path as well.) Factiva was a separate company at one point, owned by Reuters and Dow Jones. Then Dow Jones sucked the company back inside Dow Jones.

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The service sure looks like it presents the same information available to me today via finance.google.com and finance.yahoo.com.

I saw today a full page advertisement for Factiva with the headline “The Good News.” The full page ad is on page A5 in my July 2, 2012, hard copy of the newspaper. The ad is Microsoft orange and tells me:

You can find and analyze information you need on global exports in a matter of hours.

The ad then tells me:

The bad news. It should take a matter of minutes.

The key points I am to remember on this giant image of a person who seems to be adjusting fabric is:

  • Access information you can’t find anywhere else
  • Save time with the most precise search and monitoring tools
  • Share insights with colleagues over multiple platforms.

The ad concludes by telling me that Factiva is “the intelligence engine.”

I would include an image of the ad, but I no longer have a scanner which can ingest a full page of the Wall Street Journal.

Like the Chicago Tribune, the Factiva service is a collection of content which is intended to have magnetic appeal. In a sense, the Tribune’s new service and Factiva are essentially similar in concept, although aimed at different audiences.

My views are:

  • The costs of maintaining these services are going to be high, and I don’t think either the Tribune or the Dow Jones CFOs will be happy when the number become available
  • The margins for these services are under severe pressure from free services and various big data vendors who can provide a grocery market approach to raw data
  • The market for for fee online services remains a tough nut to crack due to the costs of marketing, customer support, content licensing fees, and technology.

What I concluded from my consideration of these two quite separate examples is that there is not much innovation going on. Both services harken back to models that did not work particularly well in the 1980s, and I don’t think either will work as expected in the present business environment. Ah, traditional publishers continue to wrestle with the digital beasties.

Stephen E Arnold, July 2, 2012

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