Dana Blankenhorn has some advice:
Newspapers have always given away their content. Always. The money you pay for your daily paper goes only toward its distribution costs. The ink, the paper, the printing, and the entire editorial budget (which is just 8% of the total, although publishers act like it’s the whole thing) — that comes from advertising.
Where does the money come from? Many sources:
* Display ads next to copy, which papers now know how to get online.
* Help wanted ads, lost to specialist sites.
* Real estate ads, lost to specialized sites.
* Automotive classifieds, lost to specialized sites.
Then there’s a very, very important type of ad, the advertising insert. Newspapers haven’t even tried to replicate this online, although they could.
When newspaper publishers say they want to end subscriber “freeloading,” they are showing an enormous ignorance of their own business, not just the Web.
They have already hurt their circulation dramatically by requiring registration of all users. This also causes a lot of people to lie, to trade registrations, and lowers the value of the papers’ registration database. It can cut online circulation as much as 60-80%.
Add a toll gate to your stories and you cut that circulation again, another 90%.
So what newspapers are in the process of doing is destroying their circulation base, using backwards logic, and providing a wide opening to any competitor who can maximize online ad revenue and keep the gates open.