In some markets, electronic replicas may replace free news sites
A different version of this article appeared in the Online Journalism Review. Here’s the version on the OJR site.
In the sprawling terrain of eastern Washington, the era of free local news on the Web is drawing to a close.
The Spokane Spokesman-Review, long known for its innovative new media operation, plans to launch a digital edition this summer in tandem with closing off large portions of its Web site to non-subscribers.
“Simply put, we’re tired of giving away today’s news for free,” says Shaun Higgins, the paper’s director of marketing. “We can’t afford free riders on our service. Otherwise, we’ll have to stop paying our staff.”
The Spokesman-Review is not alone: An increasing number of publications are launching digital editions — replicas of printed newspapers or magazines that readers can view on screen or read on newsprint in remote locations. More than 225 newspapers worldwide now offer them in some form.
For most publications, a digital reproduction offers a way to beef up circulation, reach new readers or retain print subscribers. Some readers prefer to pay for an electronic replica of the print paper rather than visit the publication’s free Web site. While fewer than 1 percent of online news readers get their news this way, the number is growing, and with it comes two upsides for the media company: These are subscribers who pay — and who count toward print circulation totals.
While most newspapers see digital editions as modest adjuncts to their Web operations, a handful are going a step further. They’re eyeing digital editions as a possible solution to the dilemma facing the vast majority of online news providers: the mindset of “if it’s on the Internet, it must be free.”
The Arkansas Democrat-Gazette scaled back its Web site, adopted a subscription model and launched a digital edition one year ago. The Montreal newspaper La Presse pulled the plug on its free news site in March and launched an electronic edition alongside a scaled-down Web presence that features teasers and wire service stories.
Following that same path, Spokane has decided to put all its newspaper content behind a pay wall on SpokesmanReview.com when it debuts its digital edition. And the Orange County Register is pursuing similar plans this fall.
To be sure, not all papers launching digital editions plan to close off large portions of their Web sites to non-subscribers. In the past few weeks, the Philadelphia Inquirer, Newark Star Ledger and Sacramento Bee have either signed up for digital editions or launched them and have no plans to trim their Web sails.
For these and other publications, the biggest prize dangled by digital editions is not subscription revenue but circulation gains. The Audit Bureau of Circulations — which sets the rules on what can be counted as paid circulation — issued new rules last July, clarifyng how newspapers may count paid digital edition subscriptions in their circulation totals.
The ABC counts the digital edition toward general print circulation if all these requirements are met: (a) the digital edition costs a customer at least 25 percent of the price of the print edition; (b) the digital edition has the same name as the print newspaper; and (c) the electronic version is clearly identified as a newspaper edition.
In this era of slumping print subscriptions, that’s good news for newspapers. Increases in circulation can drive up the prices papers can charge for advertising and in turn beef up a newspaper’s bottom line.
“For us, this has been a circulation tool, not a revenue tool,” says Ginny Greene, content director of Gazette.com in Colorado Springs, which has 1,580 paying subscribers to its digital edition. “Our circulation people are just ecstatic about the numbers,” which is tipping the paper’s circulation toward the 100,000 mark.
Digital editions get a mixed reception
In Spokane, the paper recently conducted a focus group with a dozen readers who were shown a prototype digital edition. “The consensus was, This is pretty cool. Some people even said they’d pay for it,” says new media chief Ken Sands, who was surprised by the results.
The move to a digital edition at the Spokesman-Review is chiefly an effort to fend off perceived cannibalization. An internal marketing study concluded that the free SpokesmanReview.com site has cost the 105,000-circulation newspaper perhaps 2,000 to 4,000 subscribers. Some readers dropped their subscriptions in the economically depressed region and turned to the news site. At the same time, the paper has coped with the high distribution costs of serving an area big as the state of Indiana with only 700,000 people.
“A decade ago I said as soon as we have an electronic product that replicates the printed page, that’s salable to advertisers and that counts as circulation with the ABC, we’ll have our answer,” Higgins says.
That day has arrived. The paper will launch a paid digital edition as early as July or August. “If you’re not a subscriber to the Spokesman-Review, your ability to get any content from the SpokesmanReview.com site will be limited,” Higgins adds.
If more newspapers follow suit, it may send a shock wave through the détente that has existed until now between online news staffs and their digital-edition counterparts, which are attractive to publishers in that they require little or no additional staffing.
For now, most newspapers continue to see digital editions as a niche product. “I’ll be interested to see how a product like this does, how big a niche the audience is,” says Ralph Frattura, who runs the new media operation at The Sacramento Bee. “I don’t think it threatens existing online operations.”
Not all new media managers are enamored of digital editions. Adrian Holovaty, lead developer for World Online in Lawrence, Kansas, says, “I’m opposed to digital editions because, in their current state of evolution, they offer readers little of value that a decent Web site doesn’t already provide and improve upon several times over. Let’s face it: Digital editions are currently nothing more than glorified newspaper screenshots. They are awkward to navigate and offer yesterday’s news.”
Others agree. “Frankly, launching a digital edition coupled with shutting off most of your Web site to non-subscribers sounds like a terrible idea,” says a new media manager at a midsize newspaper.
Vin Crosbie, a prominent newspaper consultant who has dealt with all the major digital-edition vendors on behalf of news clients, says news sites and digital editions serve different audiences and different missions. “They should be complementary to each other. You’re not stealing readers from the Web site,” he says. “A lot of the vendors will tell you that the new media departments don’t get it, so they steer around them and go directly to the newspaper circulation departments. They understand that increased circulation equals real money.”
Crosbie says that in addition to circulation gains, electronic editions offer these advantages over a newspaper or magazine Web site:
• Context. Digital editions allow readers to see not just the stories in the day’s paper, but where they played. Play tells readers how important editors felt a story was — information many readers miss when they read the news online. Decades of reading newspapers have trained readers to look for certain visual cues on a page, which can be lost in cyberspace.
• Familiarity. Some readers feel more at home with an electronic edition that bears the same branding, typography and design as the print paper.
• More effective advertising. Instead of a bottomless advertising hole, digital editions offer a finite amount of display ad space that can be enhanced with multimedia, ultimately bringing higher rates.
• Portability. Once the edition is downloaded to a laptop or other portable device, it’s all there and you’re free to roam without the need to remain connected to the Internet.
• Convenience. Many digital editions are downloaded to a subscriber’s computer automatically, without the user having to fetch it — sort of like a newspaper carrier dropping off an electronic edition on your front steps every day. That’s a vast improvement from even major news sites like the New York Times on the Web, where the burden is on the user to visit — and a typical user visits only six times a month.
On the downside, digital editions offer news that is at best hours old, so the immediacy of the online medium is lost. Links are sparse, navigation often tricky. Archives are usually limited. Interactivity is nonexistent. Web tools, databases and other online content can be hard to find or inaccessible.
The true promise of digital editions lies a few years from now, particularly if tablet PCs take off in a big way. Most of the current services already work when viewed on a portable slate-style device. Further out this decade, the long-awaited rollout of electronic paper — sheets thin as three human hairs and powered by batteries — also bodes well for digital editions. Both tablets and e-paper offer the prospect of rich interactive audio, video and advertising on screen, especially as broadband becomes more pervasive.
Two kinds of electronic replica editions
Digital editions come in two flavors: on screen or printed out.
The main vendors offering digital editions to be read on a computer monitor or portable device include NewsStand of Austin, Texas, and Olive Software of Denver, both of which offer vastly different products. Medien System Haus of Stuttgart, Germany, produces digital editions for several German dailies, and Qmags and Zinio Systems and are the digital vendors serving the magazine industry, with Zinio sending out three dozen titles to a quarter-million customers in 200 countries.
A few newspapers offer electronic replicas on their own, such as the Christian Science Monitor, Los Angeles Times, Akron (Ohio) Beacon Journal and Sharon (Pa.) Herald. The Monitor’s service, built internally and launched last June, sends out a daily email to 1,600 subscribers, who then log onto the csmonitor.com site to download a PDF (Adobe Portable Document File) of the entire newspaper.
“We’re a national and international daily,” says associate editor Tom Regan. “Miss the wrong plane, and the papers arrive late, especially in remote regions at home and abroad. So we wanted to give people a way to get the paper in a more immediate fashion. And there are just a lot of people who still want to read the paper in a print format, even if they like the Web site.”
The second type of digital edition is a completely different animal: newspapers replicas that are transmitted to remote locations where a facsimile on newsprint is printed out for customers. Companies competing in that space include NewspaperDirect, Satellite Newspapers and Newsworld.
Here’s a quick look at what screen-centric digital editions offer.
NewsStand: Your paper in one big download
NewsStand offers the only end-to-end solution for newspapers looking to launch and maintain a digital edition. The 50-employee company started out in 2000 and launched its first digital edition in the summer of 2001.
The advantage to the customer, says CEO Kit Webster, is that “if you can’t get the print edition in your hands, or get it in a timely manner, you can get it in digital form minutes after it rolls off the presses.”
NewsStand’s 40 clients include the New York Times (an early investor), Boston Globe, Minneapolis Star Tribune, Sacramento Bee, Barron’s, Harvard Business Review, Le Monde, International Herald Tribune, Toronto Globe and Mail, The Australian, China Daily and Manila Times.
Here’s how it works: When a newspaper goes to bed, an employee FTPs the prepress postscript or PDF files to NewsStand for processing. There, the files are converted to NewsStand’s proprietary format, hotlinks are added to the jumplines and urls that appear on the page, and the entire text of the paper is scanned in to enable readers to search by keyword. The original files are compressed by at least 70 percent, so that a 1.2-gigabyte file from the Harvard Business Review is sent out to readers at only 5 megabytes in size.
Many readers with broadband connections have the edition sent automatically at night, so it’s waiting to be read on their hard drive first thing in the morning. Readers can increase font sizes and jump around by using the NewsStand Reader. A number of newspapers have resisted the approach of forcing readers to download a proprietary reader, and next month that pitfall should be solved when NewsStand introduces a browser-based reader that requires no download.
The company won’t release numbers related to subscriptions, income, or how much money its newspaper partners get, though it does say it has subscribers in more than 100 countries. Publishers set the subscription price, typically at 70 to 100 percent of the cost of a print subscription. Generally, customers can buy a single issue or a monthly or annual subscription.
The biggest challenge facing digital editions may be that they compete to at least a small degree with the publications’ free Web sites.
“That’s a terribly political issue,” Webster says. “We can allude to it, but ultimately it’s up to the publishers. It’s certainly a challenge if the Web site is free and it competes with both the print paper and the electronic edition. You seldom find industries that give away their product for free.”
He points approvingly to La Presse’s decision to pull back from its free Web site while launching an electronic edition. “They decided to do what a lot of publishers privately say they want to do,” Webster says. “It takes a rare newspaper to make that difficult jump.”
Olive: A do-it-yourself digital platform
Where NewsStand offers a service, Olive Software offers a technology platform. The company started out in 1999 with a business plan of digitizing archives. Two years later it moved into digital editions and launched its first electronic newspaper on Halloween 2001. Today the Denver-based company has 45 full-time and 15 part-time employees and 120 clients, 50 of which have gone live.
Olive’s clients include The Washington Post, Columbus Dispatch, Norfolk Virginian-Pilot, Arkansas Democrat-Gazette, London Daily Telegraph, Austria’s Der Standard, and a number of Freedom Communications newspapers, including the Orange County Register and Colorado Springs Gazette. The Philadelphia Inquirer and Newark Star Ledger have just signed on as well.
Olive charges its clients setup fees ranging from $15,000 to $100,000 and up, says Shaun Dail, executive vice president. At last count, Olive’s 50 newspaper clients had 28,000 paying subscribers, with the Arkansas Democrat-Gazette topping the list at 3,500 subscribers to its digital edition.
“We’ve found that there’s a large segment of the public that prefers the newspaper edition online to the traditional Web site,” Dail says. “That stems from the fact that the newspaper industry has spent 200 years teaching people to read its product in a certain way.”
Olive’s digital edition provides an on-screen news experience that’s a cut or two above the NewsStand Reader: Stories can be summoned up and printed out individually, navigation is sleeker, and embedded story summaries pop up on screen. On the downside, the Olive license doesn’t include such niceties as billing, which requires a separate vendor.
Newspapers process their own finished postscript or PDF files by using Olive software to distill the content into Extensible Markup Language (XML), the universal format for structured documents and data on the Web. At the Colorado Springs Gazette, it takes two eight-hour shifts to accomplish the task each night because of human involvement required in such tasks as archiving, correcting headlines and naming ads, Greene says.
Unlike NewsStand, digital editions created using Olive software don’t require readers to download the paper or to download or use a proprietary “reader” to view the online paper: Readers use their Web browser to access the newspaper online just as it appeared in print.
Digital editions offer a convenient solution when print subscribers don’t receive their paper. They’re ideal for travelers, who usually don’t have access to a high-speed connection, and for times when a paper can’t publish: When drivers for the French daily Le Figaro went on strike, the paper immediately put up the Olive electronic edition.
But digital editions don’t always meet all the needs of readers. When Colorado Springs was hit by a blizzard in March and newspaper delivery trucks were stranded, readers turned not to the static digital edition but to the Gazette Web site for breaking news about the storm, stranded relatives and real-time updates, Greene says.
Should online news staffs be wary of digital editions? Says Dail: “Often new media initially feels threatened by this, but once they get into it, they tend to embrace it. The more they find out, the more they like it.”
Digital editions: Have it your way
The Columbus Dispatch launched its electronic edition on the Olive platform in March. “We wanted to offer customers and potential customers as many ways to read the ‘paper’ as possible — be it the regular print edition, the existing HTML Web site, or any other electronic method,” says Pamela Coffman, electronic publishing editor. “For example, some potential customers who aren’t candidates for home delivery now have another method of getting to the paper.”
The Dispatch’s electronic edition is currently free but will cost $4.95 per month in a few weeks — the same price as a subscription to its Web site. (Both are free to print subscribers.) “My personal feeling is that traditional newspaper readers will like the electronic edition because it looks like the newspaper and is easier to browse,” she says. “I think we’ll still have a substantial number of people who prefer the standard HTML site because it’s oriented toward seeking specific information quickly rather than browsing.”
In Spokane, managers are weighing whether to cast their lot with Olive or NewsStand. Either way, they want print subscribers to be able to access the entire Web site and the digital edition for free. But managing editor Sands says the paper will continue to provide wire service news, multimedia and Web-original material on SpokesmanReview.com without charge.
Sands has been tasked with shepherding the project while managing an online staff of four — already lukewarm to the new approach — and maintaining the Web site’s relevance. The SpokesmanReview.com receives 22,628 unique visitors a day, a 50 percent increase over the past year, and Sands had hoped that advertising would boost the new media group’s bottom line once the economy picks up. That’s unlikely, now that they plan to put direct-from-print content behind the pay gate.
The challenges in making all this work are formidable. Broadband is not widely available in the area, a dubious proposition for a digital edition. Staff Weblogs frequently contain links to articles from the newspaper. Under the plan, the Weblogs will remain outside the pay gate but only subscribers will be able to follow the links to content in the paper. “We’re going to have to finesse that,” Sands admits.
Another kind of digital editions: Location is no object
To date, the printed version of digital editions have proved more popular with readers than the on-screen kind. Consultant Crosbie says that among digital editions, the newsprint variety makes up as much as 70 percent of revenues.
Satellite Newspapers, which changed its name Monday from PEPC Worldwide, manufactures vending machines that sell newspapers directly to customers. The 35-employee Dutch company has about 200 machines scattered around the globe, with 45 in the United States, including locations at Marriott Hotels in New York, Los Angeles, Washington, D.C., and Waikiki Beach. A customer plunks $3.50 to $5 into a kiosk and minutes later receives an 11-by-17-inch tabloid size reproduction of the newspaper, limited to 48 pages. Publishers receive a royalty on each sale.
NewspaperDirect, outside Vancouver, B.C., has 34 employees and offers 140 newspapers from 40 countries. The company currently has between 70,000 and 80,000 monthly subscribers at hotels, resorts, cruise ships, corporate offices, embassies and among expatriates who live abroad. Fees range from $2.50 to $5 for an 11-by-17-inch black-and-white reproduction, with no page limitation.
“We have saleswomen on the beach at Pattaya, Thailand. If you’re a vacationer and you want a copy of today’s LA Times, they’ll call on their cell phones, drive off to the printing vendor on their dirt bikes, and 20 minutes later you’ll have it in your hands,” says Richard Miller, the company’s vice president. (The New York Times interviewed Miller here.)
Miller notes that newspapers in Dallas, Houston and Denver, among others, don’t have the ability to generate a PDF of their newspaper because of dated editorial production systems. Up until three months ago, the Chicago Tribune’s front section was paginated but its second section was not; today the entire newspaper can be transmitted worldwide.
The company is now moving into the delivery of newspapers on screen, with a focus on a portable, wireless tablet PC. “We believe that devices like the tablet PC will help open up digital editions to the masses,” Miller says. “We need to play in that space.”
A third company entering the arena of digitally distributed print newspapers is Newsworld of Oslo, Norway, which plans to roll out hundreds of vending machines in select markets. “For instance, in the Italian quarters of Los Angeles, we may have 20 to 30 vending machines providing La Stampa, La Repubblica and other Italian and European newspapers,” founder Nils Chr. Trosterud says by email. “In the Asian quarter of L.A., we may have 30 vending machines — also placed in the headquarters of larger Asian corporations — providing the fresh versions of several Japanese, Korean and Singapore newspapers.”
An attack of the clones?
While new media managers welcome the prospect of extending the paper’s print edition to foreign cities, some worry that the on-screen versions may detract from newspaper’s commitment to the Web.
“It seems ludicrous to me that a news organization might scale back its Web operations in favor of such a user-unfriendly dud of a product,” says the World Online’s Holovaty. “I’d think differently if digital editions weren’t merely replicas of print newspapers. I like the idea of rich-media digital editions that are updated constantly — but that day hasn’t come yet.”
Crosbie, the consultant, believes that digital editions will improve — even flourish — as the technology matures. He notes that some newspaper chains are looking at adding personalized editions that contain targeted advertising and customized editorial content. “It would be even easier to do that digitally than in print,” he observes.
The day may come in a few years when digital editions and Web sites meld the best of both delivery systems into a hybrid of the two, with an online edition that offers breaking news, today’s comics and day-old commentary in a contextualized and personalized format.
But until that day arrives, we’re likely to see tensions between staffed websites and digital editions continue to grow, particularly if more news organizations wall off their free news sites in favor of the clones.
