Lord knows I want the Orange County Register’s print-centric business model to be successful. It is the model of simplicity: Beef up the content + charge for content = Profit!
But an article at The Guardian that asserts that model’s success doesn’t actually show any success, except in the area of spending more money.
The article sums up the paper’s approach since CEO Aaron Kushner took over Freedom Communications a year ago: Add more staff and pages, prioritize print over digital, erect a hard paywall. A quote from editor Ken Brusic perfectly captures the reasoning:
“Imagine it’s your daily coffee. Each time you put down your money the cup gets smaller and the brew gets weaker. That’s essentially what’s happened to American newspapers. We took things away from people and at the same time gave content away free on the web.”
I happen to agree with that. The first instinct of publishers over at least the past 10 years (if not since the dawn of publishers) has been to cut payroll and expenses first, seek new revenue channels later — which is lunacy. I was in Media General’s corporate offices in the late 2000s when the economy began collapsing, and the company’s three metros went, among other cuts, from four racing writers to zero, two science writers to zero, full-time state capital staff eliminated except at the one paper actually located in a state capital, each newsroom collapsing to focus on “the franchise,” local news. You had the sense of medium-sized, hefty dailies with big ambitions shrinking their staff and ambitions to become oversized small dailies. But the prices stayed the same. I always wondered what would have happened had they offered readers a choice and laid out the economic realities, explained that advertising had collapsed and what that meant for staffing. What would the readers have chosen as their preferred way of handling the budgets? Maybe the same thing. We’ll never know for sure.
In Orange County, Kushner’s approach essentially is turning back the clock to experiment with the approach no one tried: Provide the content and see if you can make that work. The Guardian asserts that “as the paper prepares to celebrate the experiment’s first anniversary, it appears to be thriving.”
But the definition of “thriving” I’m familiar with wouldn’t seem to apply here:
“Home deliveries are flat, compared to a year ago, but circulation overall is sharply up if you include an expanded stable of 28 weekly newspapers.” I would not count them, because the rest of the article didn’t talk so much about beefing up the staff and content of the weeklies. “… Revenue is ahead of target, said Kushner, without elaborating. Annual figures are due to be published in September.”
Where is the skepticism we would bring to any other businessman? Kushner SAYS revenue is ahead of target. But what was his target? You double your staff in one year and make your paper so heavy that, as deputy editor of local news Rob Curley says, it could kill a cat, you incur gigantic expenditures. It’s really easy to ramp up spending. Ramping up revenue is a good deal harder. So what does the Register and its there’s-no-more-free-content approach charge readers for this giant, cat-killing package? Print or online, it costs just $1 a day. I would be shocked if that covers even the cost of the newsprint and ink the Register is using. The Register has been working to increase advertising, but with readers contributing just $1 a day, the idea that advertising has increased enough in just one year, especially coming out of a recession and in a national slump in advertising, for the venture to break even seems ludicrous.
If you were to tell me that Kushner expects to lose money for a while, build the product and its reputation, use that to bring in more advertisers and revenue streams, gradually increase the cost to readers, and eventually get it to where both the print and online products are sustained as primarily pay-for-content products supported by readers rather than advertisers, I could believe that.
Just don’t tell me it’s “thriving” right now and expect me to believe it without any numbers to prove it.
Newsroom With A View 
[…] off free Internet access. The company claims it is having success, though circulation is flat. As I wrote recently, until someone produces numbers, the jury has to be considered out on that […]