McClatchy to end unlimited access to web sites

mwashburn@charlotteobserver.com July 27, 2012 

McClatchy Co. announced Friday that metered pay walls will be installed at the company’s newspaper web sites, including newsobserver.com and CharlotteObserver.com.

While McClatchy did not disclose specifics of the plan, which will begin late this year, users would be allowed a number of free page views per month before being required to pay a subscription fee.

“After a number of experiments and analysis on pay models, we intend to roll out a metered plan in the third quarter in five of our markets,” McClatchy CEO Pat Talamantes said in the company’s quarterly earnings call.

“We will offer readers a combined print and digital subscription package that will include access to web, certain mobile and replica editions for a relatively small increase to print home-delivery rates. We’ll also offer online-only digital subscriptions to users after they read a certain number of pages.”

He said remaining McClatchy news sites will be converted beginning in the fourth quarter. He did not identify the five test markets that will begin charging in the first phase, but Observer publisher Ann Caulkins said Charlotte was not among them.

McClatchy reported a profit for the quarter of $26.9 million, 31 cents per share, vs. $4.95 million, 6 cents a share, in the same period last year despite declining revenue. McClatchy stock closed at $1.84 Friday, up 10 percent.

Digital sales surging

As print circulation has sagged over the last decade, newspaper companies are increasingly turning their attention to digital platforms.

McClatchy said Friday its revenue from total digital advertising – including digital sales bundled with print and those sold on a standalone basis – grew 5 percent in the second quarter. Digital ad revenue now represents 23 percent of the company’s advertising revenue, compared with 20 percent a year ago.

Other major publishers, including Gannett, The New York Times and Wall Street Journal, are also using pay models for their web services.

But pay walls can hurt the reach of newspaper sites, which are usually the dominant local web destination in their markets. In Greenville, S.C., for example, the Gannett-owned Greenville News lost market dominance on its GreenvilleOnline.com site when it erected a pay wall that offered free access to only its home page. Users had to pay a fee to access articles.

Now GreenvilleOnline ranks fourth among local web sites, running behind three local TV stations, which offer free content. Gannett relaxed access policies in May, now allowing up to 10 free visits per month in Greenville.

McClatchy also owns The News & Observer in Raleigh and The State in Columbia, the second and third largest newspapers in the Carolinas behind the Observer, and their associated web sites. McClatchy, the nation’s third-largest publisher, owns 30 newspapers nationally including The Herald of Rock Hill.

Washburn: 704-358-5007

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