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Competing business models to save the newspaper industry are breaking ground not in Boston or New York, but in Down East Maine, as two local publishers try web-based strategies that couldn’t be more at odds.
Village Soup Inc., a chain of four local papers with headquarters in Rockland, last year blurred the line between advertising and editorial by letting local merchants pay to post their blogs on its Village Soup family of websites.
Last month, the Ellsworth American took a turn in the opposite direction, replacing its online presence with a site called Fenceviewer, which features summarized versions of the paper’s articles. The full Ellsworth American is available weekly as a PDF download to those willing to pay a $32 annual subscription.
“Beginning around the first of the year there was a swelling of opinion inside the news industry that we couldn’t continue to give it away for nothing,” said Ellsworth American publisher Alan Baker. The company toyed with a micropayment strategy, as had other newspaper sites nationally at the time. But in the end, Baker said, “We decided we’d hold our nose and jump.”
Nationally, the newspaper industry is desperate, grasping at straws such as e-book readers to make up for plummeting print ad revenue. Yet in the microcosm of small-town Maine, local newspapers are trying new strategies — and one publisher has an idea he hopes to export nationwide.
Village Soup, which also has a paper in the state capital, is now under contract to expand its online model to five newspapers in Alabama and New York state via a software-as-a-service model hosted on virtual, cloud-based servers. Village Soup publisher Richard Anderson claimed that his strategy is already a success, saying the sponsored blogs generate 19 percent of the company’s $2.5 million annual ad revenue, according to a May 1 piece he wrote on the media blog Reflections of a Newsosaur.
In Anderson’s model, advertisers pay to blog, and their posts appear under a home-page “bizBriefs” column with a headline and a byline that look exactly like news articles. BizBriefs posts are supposed to be confined to informative postings, and many do — like a mortgage broker’s post on Federal Reserve Board Chairman Ben Bernanke’s comments, or sewing tips from a fabric store. About 600 people clicked on a local dentist’s post about the dangers of oral piercing, Anderson said.
The click-throughs for display ads don’t compare, he said. “Banners and buttons, no matter how closely you target the content … it’s difficult to get people to read what you have to say.”
It’s a strategy that makes sense, said Dharmesh Shah, chief software architect and founder of Cambridge-based Hubspot Inc. According to Shah, when businesses post informative content, web users tend to find it and click on it. However, the model may be difficult to duplicate outside Village Soup’s hyperlocal context, he said.
Community businesses likely to blog on a newspaper’s site are very aware of who’s reading and why, he said.
“When you narrow the focus and most people know the individual/business posting, you’re less likely to be an idiot,” Shah said in an e-mail. “It would be like walking into a neighborhood cocktail party and starting to scream about the new promotion you’re having at a car dealership. It just wouldn’t work.”
The Ellsworth American’s payment strategy serves an even narrower niche. From 12 percent to 15 percent of its subscription revenue is in mail subscriptions — typically snowbirds who get the paper by mail during winter months. Problems with the postal service have taken their toll.
So far, about 100 readers have subscribed online, said Chris Crockett, the paper’s IT manager, but it’s still early in the process. There have been “some comments,” about the new model, he said, but many people have been satisfied to be pointed to the paper’s trimmed-down free site.
“This is such an interesting time,” Baker said. “We are optimistic. We think this is an opportunity for us, with the economy soft.” The subscription downloads may cost more, but they offer more: they are searchable and include ads as they appear in the print edition, he said. “We want to come out of this recession with an even stronger business model than we had going in.”
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