‘Newspapers should diversify revenue sources to stay competitive’

AUSTIN, Texas ― Jim Moroney, publisher and CEO of the Dallas Morning News, faced the same problems that threatened other newspapers around the world: declining subscriber base and print advertising revenue.

Proponents of digital-oriented media might argue that it is time to shift the company’s focus to online and mobile platforms to grapple with the woes of the print media, but Moroney said the digital-centered strategy is riddled with pitfalls, at least for newspapers.

Moroney, who is also serving as chairman of the board of the Newspaper Association of America, said that digital advertising turned out to fall far short of the expectations, certainly not enough to pay for 325 reporters and staff at the Dallas Morning News.

“We researched 3,000 subscribers, and even though we offered digital subscription at a rate that was half of the print subscription, they wouldn’t stop print subscriptions,” Moroney said in an interview. 
 

Moroney argued that his newspaper’s core print subscribers do not see digital versions as a substitute to print newspapers.

“These core subscribers see digital as an add-on, so putting a pay wall or meter is not a good idea for existing subscribers,” he said.

Rather, what newspapers have to do is charge digital readers who don’t plan to subscribe to print, Moroney said.

Of course, charging readers at a time when plenty of news is available free of charge is risky. But this does not mean that newspapers should stop experimenting with new options.

For instance, the Dallas Morning News is looking at various payment models such as “pay-per-article” and “day pass.” Alternatively, some readers might be allowed to read articles with lots of ads for a small fee, while others could opt for more expensive, ad-free digital subscription plans.

Moroney noted the importance of looking beyond the traditional boundaries reserved for newspaper companies.

“Newspapers should develop a strategy that assumes a constant rate of decline in print advertising, and they should build a strategy that overcomes that,” he said. “Don’t depend on digital advertising to save you.”

So what should be done? Moroney’s idea is that newspapers should not only bolster their print and digital advertising as much as possible, but at the same time go out and find some other way to tackle the declining source of revenue.

“We’ve talked to start-up companies and said, ‘We’ll give you this much advertising in return to own a part of the company,’” Moroney said. New partnerships with such start-ups actually helped the Dallas Morning News secure new sources of revenue beyond print and digital subscriptions.

His solution is essentially cross-subsidizing quality journalism through the formation of new businesses.

Forging external partnerships to buttress a print newspaper commanding a solid reader base might not be a universal cure for struggling newspapers, but it’s meaningful for print media companies to expand their business horizon to preserve their core business, especially as market conditions continue to deteriorate.

Moroney is not entirely opposed to running a digital-only version of newspapers. “If you’re going to go digital only, you have to find a narrow topic and go deep,” he said.

By Yang Sung-jin, Korea Herald correspondent
(insight@heraldcorp.com)