Can a Pay Wall Save the Struggling Times Argus and Rutland Herald?

Frugal news consumers, beware: No longer can you save a few bucks on newspapers by reading the Barre-Montpelier Times Argus [1] and the Rutland Herald [2] for free online.

As of October 1, those dailies, both owned by Vermont Community Media, went behind a so-called “pay wall” that requires readers who don’t get home delivery to buy an online subscription for $2.99 a week, or spend $1 on a day pass. That’s what it costs to get the scoop on state politics, high school sports and other happenings around central Vermont.

For years, conventional wisdom has held that newspapers should make online content free in order to drive up web traffic, thereby making that content more valuable to potential advertisers. But with daily newspapers losing print revenue faster than they can make it up online, more and more are engaging in what Editor & Publisher calls the “great paywall experiment” and charging for news on the web.

Like daily newspapers everywhere, the Times Argus and Herald have taken serious hits as print subscribers have migrated to the web and classified ads moved online to craigslist. Since 2001, print circulation for weekday and Sunday editions of both papers has dropped by 36 to 43 percent. Business was so bad in 2009 that the company laid off 14 employees, four in the newsroom.

Special-projects manager Rob Mitchell explains that the new pay wall was designed to accomplish two things: to stabilize circulation revenue, which has been falling for years; and to create a new business model in which online news gathering isn’t paid for solely through web advertising.

But will Vermonters accustomed to getting news for nothing open their wallets to pay for stories that, in some cases, they can still find elsewhere for free?

To date, the Times Argus and Herald have sold around 600 e-subscriptions for $2.99 each, and about 500 day passes for $1 apiece, Mitchell says. That’s a small fraction of the papers’ combined 19,340 weekday print circulation, yet Mitchell says it’s “way beyond expectations.

“We went into it with crossed fingers,” he says. “But when we saw the numbers of people who were registering and paying, it was — I don’t want to say we were giddy, but we were pretty excited.”

Based on the experiences of other publications that have gone behind pay walls, the newspapers’ managers expected web traffic to drop anywhere from 10 to 90 percent. Page views have, in fact, dropped since the pay wall was introduced, though Mitchell won’t say by how much, except to note it’s “not catastrophic.

“For us it’s not about traffic. It never has been,” Mitchell says. “It’s about serving our readership in the state of Vermont.”

For that $2.99 a week, online subscribers get full access to the websites of both papers and can download “e-Editions” that reproduce every page of the print paper as an interactive PDF. A variety of slightly more expensive subscription packages offers readers access to the e-Editions, plus home delivery of the actual newspap er. The papers are developing an iPad app that’s due next spring.

If the pay wall works, the timing could prove prescient. For the first time, respondents to an annual survey by the Pew Research Center for the People & the Press said they get more news from the web than from print newspapers.

So far, though, news website pay walls have had mixed results. TimesSelect, the short-lived attempt by the New York Times to charge for its columns online, was abandoned in 2007 when the paper’s managers realized advertising was a better source of online revenue. By contrast, the Wall Street Journal has built a loyal online subscriber base with financial news and analysis that readers have proved willing to pay for. And in recent months, newspapers such as Newsday, the Waco Tribune-Herald and the Worcester Telegram & Gazette, which is owned by the New York Times Company, have started charging for online news.

David Mindich, a former CNN assignment editor who chairs the journalism and mass communication department at St. Michael’s College [3], says he doubts whether the pay wall can work for the Vermont dailies, but adds he’s rooting for them because “we need good, quality journalism.”

“It’s hard to imagine getting a critical mass of people paying for a local newspaper when they can go to another source for free,” Mindich says. “It’s like the old phrase, ‘Why buy the cow when you can have the milk for free’?”

Now retired, Martin Langeveld of Vernon published the Brattleboro Reformer [4] from 2004 to 2006. He likens a pay wall to “trying to put the genie back in the bottle. When you’re hit with a disruptive technology, you’ve got to move with that and not try to prevent people from accessing it,” he says.

Vermont’s largest daily newspaper, the 32,450-circulation Burlington Free Press [5], is still free online. But a number of smaller daily and weekly papers have restricted web access for years — or never put content online in the first place.

The Valley News, a daily serving Vermont and New Hampshire in the Upper Valley, has been “cheerfully behind the curve” on the web, says editor Jeff Good. Years ago, Good says the paper’s publisher advised him against putting the whole paper online. So the paper’s website offers what Good calls a “Whitman’s Sampler” of stories — a national, a local, a sports and an editorial. The rest of the day’s headlines appear online, but without the stories. You have to buy the paper to read them.

That might buck a decade of conventional wisdom, but Good points out that the Valley News was one of only two newspapers in New England that added circulation in the last six months. “I’d like to think that is partly because we’re protecting our newspaper,” he says.

The Caledonian-Record, a fourth-generation family-owned daily based in St. Johnsbury, launched a redesigned website November 3 and put most of its content behind a pay wall. Subscription rates range from $8 for two weeks to $150 for a full year. So far, 44 people have e-subscribed, according to assistant publisher Todd Smith.

In 2009, the Record raised its newsstand price from 50 cents to 75 cents, and lost almost 20 percent of its print circulation over the following year. For Smith, the pay-wall decision boiled down to, “If you want good, professional investigative journalism, you gotta pay.”

One thing that’s allowed some of Vermont’s rural papers to all but ignore the web is a near monopoly on news coverage. M. Dickey Drysdale, editor and publisher of the weekly Herald of Randolph, notes, “We have daily newspapers that circulate here, but none can claim to have the full scoop on our area. None of them really tries.”

His paper charges $33 a year for access to the current week’s paper online and currently has 178 e-subscribers. Print circulation is around 6000.

The Times Argus and Rutland Herald might be the only news sources in some towns they cover. But that’s not the case at the Statehouse, where their company’s three-person Vermont Press Bureau competes for Capitol scoops with a dozen other news sources that are still giving it away for free.

Among those providing free online coverage of the Statehouse are the Free Press, Seven Days, Vermont Public Radio, WCAX, WPTZ, the Brattleboro Reformer, the Bennington Banner and nonprofit news site VtDigger [6]. The hard-charging founder and editor of VtDigger.org, Anne Galloway, was a victim of layoffs at the Times Argus in 2009.

Mitchell admits the availability of free Statehouse news is a concern. And it doesn’t help that the press bureau recently lost two of its most seasoned reporters — Louis Porter and Dan Barlow — to jobs at left-leaning advocacy organizations. The solution, Mitchell says, is to produce a “top-of-the-line product.”

“We have to be careful that we don’t lose an inch,” he says, “but we also have to focus on what our readers need from that Statehouse coverage, rather than trying to beat the other guy.”