AzCentral to Charge Readers....

This is how the world ends.

Republic Media parent Gannett Co., Inc., announced a series of initiatives Wednesday including a new pay-for-online subscription model that executives project will return the company to a growth mode.

Gannett is spinning this move as an "inflection point"; it's a return-to-growth mode in which they stop simply winding down the paper and try to actually increase revenue.

Give me a break.

Gannett's move is the fulfillment of a prediction that I made in 2007.

Conventional wisdom holds that the drop newspaper advertising revenue will be offset by increases in Internet advertising revenue.  Unfortunately, a close look at the numbers reveals that the conventional wisdom is wrong.

That prediction come true and web revenue comes nowhere near offsetting lost print revenue.  Naturally, other companies have been in the same boat and have taken the logical step of trying to sell their web content.  For most of them, it's been a disaster.

You will recall that the Tribune took a series of drastic steps before its rapid collapse.  One of those steps was charging for its web content. 

The bottom line is that there are just too many sources of information.  People don't pay for web content. 

Newspapers have also made a mistake of accentuating their weakness.  The easiest thing to find on the web is opinion pieces.  EJ Montini and Linda Valdez confer no unique advantage for the Republic.  The Republic's advantage is news gathering, yet the the major papers have tried to compete with the web by highlighting opinion writers and cutting down on actual news coverage.  They are playing to their weakness.  Montini costs the paper a great deal of money and his opinion pieces are marginal compared to other web content...why highlight a dinosaur? 

The subscription service will be a disaster.  Web hits will plummit.  The buzz factor will disapear and the Republic will no longer be the go-to source for news. 

Yes, it's an inflection point.  But not the one that Gannett Brass hopes it will be.

Comments

[Its a Dry Heat]

Accelerating the collapse will be the decline in internet ad revenue as the companies that place the ads look at how few eyeballs are actually looking at their ads.

Once that spiral starts, I can't see how they can escape.

[Son of September]

It's not just that the Republic is in the news business, they're in the general news business. When the market shakes out, there will be a couple dozen specialty news/blogs sites to replace the Republic. Most of those sites, paid (like Capitol Times) or not, will be providing content to a narrow audience, just the kind of audience advertisers like to concentrate on.

[Blackbird03]

I smell toast!

When they realize this is just a fantasy -- it will be too late. They really don't have much in the way of unique content that is worth anything.

I wonder what would happen if they sold and re-branded it the "Arizona Republican" and hired some right leaning writers (maybe even Greg as Editor) to cover Arizona based news, issues and local community stuff? Think it would sell? I'd buy it.

[Dewey]

That model actually does work. We did that with a rotisserie chicken. The first pieces were free, but we took bids on that last drumstick.

Of course, once the last drumstick was sold everybody went home, and I have to confess that they didn't come back again. But the main point is that the picking of the carcass--I mean the model designed towards growth and value creation--did return us to a modicum of profitability.

For the short term.

Or maybe the actual reason the other guys didn't come back was because we beat them over the head the whole time they were here with incomplete and biased information.

[dave72]

"Strengthen the foundation of [Gannett Co.] by finding, developing and retaining the best and brightest employees through a robust Leadership and Diversity program." Gannett 10K filing, Feb. 2012

Twenty years of diversity-driven hiring to meet EEO goals leads to mediocrity. The AZ Republic staff of newbies is a prime example. They chose to ignore the Fast and Furious gun-running scandal right under their noses, but now wrote a "history" of the scandal a year after the fact. Who needs a historypaper?

Mediocrity leads to failure. See Gannett's personnel cuts and declining sales and profits in their 10K.

Repeating the same behavior, over and over again, even though it is not working? Insanity.

[tim]

I rarely agree with Jeff. This is one of those few times. The Arizona Republic will soon be irrelevant.

[janfan]

Perhaps this pay wall will help Gannett pay Craig Dubow his $5.9 million cash payment in April, which is part of his "get lost" severance deal that totals $37.1 million.

http://jimromenesko.com/2012/02/24/dubow-gannett-separation-agreement-appears-in-new-filing/

[Barry M. Aarons]

Sir Tim Berners Lee, who invented the World Wide Web in 1988 has now passed Guttenberg as the most influential figure in the history of the written word!

[Beth]

For the life of me, I cannot understand why Brahm Resnick continues to have Greg on his show. Channel 12 is owned by Gannett, which also owns the Arizona Republic. All Greg does is rub his hands together in glee at the prospect of the Republic's demise, trash good reporters and generally dismiss the newspaper. Brahm would do well to have a more unbiased contributor on his show. I, for one, will never watch when Greg is on. He is a joke. But he is not funny in the least.

[Dewey]

I agree completely. Channel 12 should pretend like Greg doesn't even exist. They should not allow him or anyone else who disagrees with the views of the Gannett Corporation onto our, I mean their, airwaves.

And they especially should not allow anyone on who is not funny in the least. Oh wait, they're already doing that.

[westsider]

Greg, Why is this in the future tense: "the Republic will no longer be the go-to source for news"?

You have been pointing out for years that they are an unreliable source of news.

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