This wasn't totally unexpected, and if I had been paying attention to what McClatchy was doing, I could have warned people about it with more lead time. On December 4th, 2012, the Anchorage Daily News announced it is becoming the latest newspaper in the McClatchy chain to institute a metered pay wall. Effective December 18th, ADN will operate behind what is best described as a "flexible pay wall", meaning that a non-subscriber will get only a limited number of free reads in a 30-day period.
Specifically, although casual readers will be able to access their homepage and section fronts, such as local news, sports, features and business, at no charge, a subscription will be required to read more than 15 pieces of content in any 30-day period. Current print subscribers will be able to add full access to ADN's online news for 60 cents a week or less, depending on the renewal term. Those who only want a digital subscription will be able to purchase a package that includes mobile, web and the electronic replica of the print newspaper for $7.97 a month or $79.95 a year. ADN publisher Pat Doyle says that the print and digital editions will not mirror each other; they will be published on different schedules and have slightly different content. Note that ADM turned off the comments to their story, which is understandable, but which also denies them immediate feedback from the public.
What Pat Doyle did not disclose was whether or not this was strictly a voluntary decision by himself, or whether it was imposed upon him from the top down by McClatchy, which is ADN's parent company. There is good reason to ask this question. In their second quarter earnings statement released on July 27th, 2012, McClatchy, which publishes 30 newspapers in 16 states, disclosed that they intended to test-market flexible pay walls at five of their newspapers (later identified as the Sacramento Bee, the Modesto Bee, the Fort Worth Star-Telegram, the Columbus GA Ledger-Enquirer, and the Biloxi Sun Herald), and that they would expand it to all of their newspapers beginning in 4Q2012:
"We are also offering new subscription packages to our readers. After a number of experiments and analysis on pay models, we intend to roll out a metered plan in the third quarter in five of our markets. We will offer readers a combined print and digital subscription package that will include access to web, certain mobile and replica editions for a relatively small increase to print home-delivery rates. We'll also offer online-only digital subscriptions to users after they read a certain number of pages. Once the first wave is launched, we intend to expand this model to our other markets beginning in the fourth quarter of this year".
In their third quarter earnings statement released on October 25th, 2012, McClatchy identified the five test markets and gave a progress report:
"In early September, five McClatchy newspapers – The Sacramento Bee, The Modesto Bee, the Fort Worth Star-Telegram, the Ledger-Enquirer in Columbus, Ga., and the Sun Herald in Biloxi, Miss. – introduced new subscription packages, known as our Plus program, for digital content that ended free, unlimited access to the newspapers' websites and certain mobile content. The Plus program includes subscriptions for both combined digital and print readers and digital-only readers. A metered paywall on each of the newspaper websites requires users to pay for content after accessing a limited number of pages or news articles for free each month. Existing home delivery subscribers are given free access to the digital content and rolled into the bundled print and digital Plus program when their subscription renews.
"We are excited about the early results. Thus far, only a small percentage of renewals have opted out of the Plus program, telling us our print readers value our content and high-quality journalism and are willing to pay extra for it in digital form. Similarly, we have added thousands of new digital-only subscribers to our paying customer base. We intend to expand this model to our other markets beginning next month. We believe the new subscription revenues will begin to make a more significant impact in the fourth quarter. In 2013, we believe the new Plus program could add more than $20 million depending on a number of factors, including how quickly we complete our company-wide rollout.
Another publishing chain, Gannett, imposed a flexible pay wall upon all its newspapers except for USA Today in February 2012. By June, the pay wall was in place at 49 of Gannett's 80 newspapers, and company officials said their digital subscription strategy was on pace to contribute $100 million of additional operating profit by the end of 2013. However, TV stations in Gannett locations are ramping up their free online news capabilities to take advantage of it, as KPHO did in Phoenix after the Arizona Republic launched their paywall in September.
The Mat-Su Frontiersman, which is not part of the McClatchy chain, also instituted a flexible pay wall on September 17th. They give you five free reads in 30 days. Both the Kodiak Daily Mirror and the Ketchikan Daily News have total pay walls.
Prognosis: Because the Anchorage Daily News is so overwhelmingly dominant, this decision should benefit them financially. One other advantage is that the number of trolls in the comments to ADN stories will be sharply reduced; it will clean up the discourse. However, KTUU Channel 2 is also expected to benefit if they keep their access free, since they'll attract readers who don't want to pay for ADN news. And if KTVA Channel 11 can get re-vitalized after being purchased by GCI, they also stand to benefit. Another prospective beneficiary is Alaska Dispatch; since they have no large brick-and-mortar operation to support and they have built a solid reputation for qualitative journalism (Craig Medred notwithstanding), they could attract more readers. On December 27th, Alaska Dispatch editor Tony Hopfinger reacted, saying “Time will tell whether something like this will actually help them. But all indications from folks I've talked to and the response we've got from Alaska Dispatch is that people are simply not going to pay for online access.” Dispatch is an online-only publication with much less overhead; it is financed solely through advertising.
Since I blog on Alaska politics and current events, unlimited access to ADN is relatively important for me. I may get a digital subscription once the deadline passes and I can assess the impact first hand, since ADN is an Alaska business and we should strive to patronize Alaskan businesses whenever possible. But first I want to see how well the other sources could substitute for limited access to ADN.