"Against the Grain": Jim Moroney on the Decision to Erect a Paywall at The Dallas News

Categories: Media
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Shortly before The Dallas Morning News announced the erection of its paywall, which goes into place February 15, publisher and CEO Jim Moroney sent to the staff a memo in which he wrote: Brace yourself. Said Moroney in a phone conversation with Unfair Park at 6:30 this morning, as he was driving to the airport to catch a flight to Phoenix, the memo more or less warned: "We'll be ridiculed and vilified, because this goes against the grain." And, sure enough, in comments here and on the paper's website and even on The Consumerist this morning, skeptics outweigh supporters of the pay-to-play plan by, oh, a thousand to one, give or take.

"We've done things before that amount to taking risks, and this is another one," Moroney tells Unfair Park. "And I said: Look, this may not succeed." But, he says, it was necessary to at least try. He explains why in a lengthy Q&A that follows, which is free.

We've known the paywall was coming for some time; and you've hinted at it for months, if not longer. At the same time, you had to know what the reaction to the announcement would be. What in the end was the rationale behind charging readers for online content?

Our industry has been trying to prove that they can continue to grow page views and sell more ads and make a bsuiness of it, and here we are 15 years later, and 10 percent of total revenues comes from online, and that's not one of those acceleration paths that's sustainable. When you look at how far ad revenues have fallen, it doesn't seem to me continuing to grow more page views and sell more ads based on that is a strategy that is going to work. So there are other ways of trying to create different business models, and for ours, one of the ways that has been successful has been selling access to the content through the paper, and we need to take a chance and see if, on tablets particularly and smartphones obviously, people are willing to pay for content. ... As I said in the note to the staff, when you're seeing four years of declining ad revenue and you're unsure if that'll turn around any time soon, the failure we have is the failure to take risks, and if we fall flat on our face, we'll pick up and move on.

Does that mean there's a fish-or-cut-bait date?

I honestly haven't set a date. I did say we've got to give the strategy time to succeed. We'll course-correct. We're not going in ham-fisted, saying, "Damn the torpedoes." We'll course-correct as the data suggests. We'll give it time. You set your sights on 2011 and work this as well and as hard as you can. It's like taking depth measurements along the way.

You're not only charging $16.95 for access to online content, but you also upped the $30 monthly subscription price by $4. Which leads one to believe this is as much about the print product as the digital delivery.

It's about both. My personal opinion is there isn't a metropolitan newspaper company that can make whatever this eventual transition is into a mostly digital business without having a healthy print product, because so much revenue is still tied up in that. You have to be sure you're still having a strengthened newspaper product, and then you look at how you make this digital transition. For us, we've gone to the customer and said, "We need you to pay for more of the cost of what we do every day than we have in the past," because the "ad subsidy" -- and it was a subsidy -- I don't think it works online and works to a lesser degree in print than it used to. It's like, in the old days ad rates went up regularly. Some modest increase in the cost of the paper has to be reckoned with as we have wage increases, and newsprint's been going up in the last six months.

We have not increased the price of the paper since May 1, 2009. I think that some modest increase in the price of the paper for the people who want to continue to purchase it is probably in the cards going forward. It's like most other products. If you look at milk, cereal, most of the things we consume, Coca-Cola, there's a small but steady increase in the price of the goods. The business model has changed to what's now a 55-45 split between ads and consumer contribution, and there will have to be a small increase every couple of years, if not more frequently.

More than a year ago, during a Dallas Press Club panel, you said you'd be more likely to charge for hyperlocal news stories -- say, City Hall or police pieces -- than investigative stories. What will the paper now charge for, and how did you come to that decision?

The way we distinguished what would and what wouldn't be [behind the paywall] was whether we thought it was a commodity. Today breaking news is pretty commoditized. The television stations, maybe even KRLD, will be on breaking news, and it's available to everyone, and its covered as it happens. You can put a camera up, and it's news. If a gas well blew up, and if we made that available to everyone for free, and then turned around the next day and offered analysis on why it happened, that probably wouldn't be free. Anything we're originating, anything that's unique to us, something that's not duplicated in other local media outlets, those are the things that'd be available only to people who pay for it.

Wire news, breaking news, commercial content, obits -- all of that will remain free. And there will be a little bit of judgment call from time to time about what's a commodity and what's not, and I trust our newsroom will make the right call as things begin to evolve. I think we'll all be in a learning process and err more to the side of "this is something unique to us" in the beginning and make course corrections along the way.

You'll have a chance this month to register with the site with name, rank and serial number, and you'll see a "D" by some articles, and that'll indicate that's a story that in the future you'll have to pay for. There will be a mix of stories, and some days you'll see a lot that are free, and some days local news dominates the headlines and you'll see three, four "D"s there.

You guys tried this a few years back by charging for Cowboys content. It didn't last long. How's this different?

It worked to a degree in that there were a reasonably good number of people who paid for it. But with that newsletter versus selling ads around it, the math worked out in favor of the advertising. And it was a time when costs per impression online were a lot higher. Today, with the amount of available inventory and the seemingly decreasing CPMs, I don't think the math works anymore. It may be if we did that all over again, we may  say it's better to leave it paid.

On Cowboys, for instance, a game summary is probably going to be free, even if we write it. The AP's writing it, the Star Telegram's writing on, ESPN  is too. But what does Tim Cowlishaw or Jean-Jacques Taylor think about the game? Those are the things that become more valuable. As I like to say: We need to be providing perspective and interpretation and analysis. The why and how, the perspective, is what is distinguishable.

How much do this new subscription rate -- and the talk of raising rates more often -- commingled with the less-expensive paywall have to do with preparing folks for the inevitable demise of the print product, whenever that day may come?

The thing I am more interested in is the people who subscribe to the paper and getting them used to the digital apps. I wonder if people will say, "I am no longer a newspaper reader." That may be a high-class problem. These are our best customers -- the people who pay $360 a year to take The Dallas Morning News -- and making these things available to them at no additional cost is a way of saying I'd like to see what their engagement is. How often do they use a tablet, a smartphone? They're already our most engaged users -- the people who subscribe to the paper. Part of this is to see how their digital reading behavior changes. And maybe the app is as good or better than the print edition. There's that possibility, and I think we'll have have to wait and see.

But in the course of your conversations about the digital future, were there indeed talks about: One day, when the paper version no longer exists ...?

We have raised the price of the paper deliberately, and as our in-and-out subscribers have departed, we're down to a core group that I like to say have a bumper sticker that says, "You'll pry the paper from my cold, dead hands." I think we'll be publishing a paper for a long time -- past a decade and a half, as far out as I can see. The only caveat I have is if these same people -- people not unlike you and me -- say the iPad is as equally good and more affordable, if that group says, "I no longer need to have that physical product" ... maybe you won't have a printed product. But for the next decade, the business is too dependent upon the print to unplug it. The business model doesn't work unless you reduce the scale of our newsroom. If you want a 50-person newsroom, a 75-person newsroom, we'd be having a different discussion. But the scale of our newsroom is what differentiates us from everyone else in the market.

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72 comments
RPTexan
RPTexan

I used to read the DMN every day. Now anything worth reading is blocked. It's a useless site now.

guest
guest

Why would I pay for the Dallas Morning News when I can be much better informed about the local news by reading the Dallas Observer?

mrs. bob mong
mrs. bob mong

I'll pay any price for the brilliant commentary of Steve Blow.

Daniel Daugherty
Daniel Daugherty

Meanwhile, they'll continue handing out free copies of the print edition to every non-subscriber in the Metroplex

FRED
FRED

"Relatively little suburban coverage" - you must not read the sports section. They rarely cover a Dallasschool - the only thing inside LBJ is the swooning sychopancy they give HP. And the Friday Neighbors section only covers private schools.

J.A.R.
J.A.R.

So to all the DMN haters...

What makes you think TDMN cares whether you stick around or not?You obviously don't pay AH Belo any money now -- do you?And yet they turned a profit for the last few quarters without you.

Moroney has wisely steered the DMN to have a more equal revenue balance between advertising and subscription fees. Right now the News has enough subscribers and ad revenue to put out a paper and make some money. AND they have NO DEBT.

Ask any other newspaper company in this country if they'd like to have TDMN's revenue balance and debt load.

TDMN is in the business of providing content. A couple hundred thousand people per day are willing to pay for that content. And true, they've been asked to pay more than most papers charge, but they pay it.

We're past the days where more eyeballs reading the ads (online or in print) at any cost (free) will make a serious difference in cashflow. The website ads are not footing the bill. More eyes on those ads will not make enough to make the effort worthwhile.

TDMN is providing content for those who are willing to pay for it.

If that's not you...good riddance. They're not going to lose a penny by providing you less free content on the internet.

Robert Wilonsky
Robert Wilonsky

Meanwhile, the site is down at this very moment:

"Internal Server Error

The server encountered an internal error or misconfiguration and was unable to complete your request.

Please contact the server administrator, webtech@belo.com and inform them of the time the error occurred, and anything you might have done that may have caused the error.

More information about this error may be available in the server error log."

You get what you pay for, I guess.

LaceyB
LaceyB

I also gave the boyfriend an iPad for xmas. Gorgeous graphics and lovely toy. But "affordable"? What planet is this guy from? One extra gadget and a protection plan to the 16GB was almost $650. Seems kinda steep to me.

LaceyB
LaceyB

I would dearly miss the printed page of any newspaper...taught myself how to read that way (well, that and "Wheel of Fortune"), but, never thought it would be so expensive that I'd have to give it up. I also dearly miss my NYT Crossword. Quick's just isn't hard enough. Even then, I'd call in edits (movie ratings posted incorrectly). My parents's friends would call in for rec's, since they knew I read everything around 8. If print went away, I'd buy the last DMN I could find, dye it black, and wear it for a day or two in mourning. But, I won't miss their bribed republican views. Or the fact that they want to charge their own city for what matters at the highest price, online or not.

GWC145
GWC145

The Dallas Morning News will have to improve its product considerably to make it worth what they charge now. Weak columnists, relatively little suburban coverage, sensationalized stories and failing to address issues I'm really interested in are making the paper a bad investment. I would likely move to the less expensive digital version, if the web design is ever improved or just drop the paper all together. I am a core reader and the core seems pretty hollow these days.

Rooster
Rooster

I am one of Moroney's "best customers -- the people who pay $360 a year to take The Dallas Morning News"

The fact he hiked my rate 10% to pay an online service I'm not going to use has frosted my ass.

I'm currently doing some soul searching to determine how much I read my DMN. While I dig having a paper in front of me in while I eat lunch, I have to question if it's $30+ worth of dig.

Tom L (No, Not That L)
Tom L (No, Not That L)

Providing content that people are willing to pay for is a good internet business model. The thing is, Moroney, do you really have content people are willing to pay for? Most of the news content of my paper version of the DMN appears to me to be national and international. Sorry, Jim, but there are many better and still free sources for that. Local news? Again, sorry, but I don't particularly trust the DMN on local news. In fact I depend more on THIS website for local news than the DMN. That leaves ... what? TV Guides? More easily obtained online elsewhere and--again--for free. Comics? Ditto.

So where's the content?

Randy King
Randy King

Any of you kiddies ever actually run, or even manage a business forced to change with the times?

I'm sure Moroney gives snark from cubicle fodder the all same weight as the Observer does The Dallas Woman's Club.

Mavdog
Mavdog

does the DMN have unique product that people are willing to buy? yes.

Is the traditional business model of selling that product on paper and delivering it to a home ceasing to be a viable, profitable model? absolutely.

Moroney is doing exactly what a good businessman would do...he is trying to stay ahead of the curve and not be run over by being behind it.

I recently changed my WSJ subscription to a digital one that I read on my iPad. It's about 60% of the cost of having the paper thrown on my yard each day and I don't have all the paper to toss out.

I added the NYT this week, and will pay them for the ability to read their paper digitally each day. Same for the WaPost....

So yeah, I'll pay for the DMN too, because I want to read the unique content they have to offer.

This is the future folks, and give credit to Moroney for embracing it. Hopefully it keepd the DMN in business, we need them around.

cp
cp

His analogy to milk and bread is seriously flawed. This is what you get when you have no competition. Aldi started selling milk for $0.99 a gallon. And now Kroger, Alberton's, even Wal Mart- who said they weren't askeered of Aldi- have all followed suit. I saw that milk was on sale at the CVS on Lemmon for $2.99.... I guess CVS didn't get the memo: MILK IS CHEAPER THAN ONCE AGAIN!

Steve
Steve

Yeah, but what about local mainstay QUICKDFW??? I need my douchebags!!!

jdub1772
jdub1772

My issue, as it appears to be with others is how do you go from free to 17 bucks a month just like that? Wouldn't four times the subscribers at 4 dollars a month be better than just a few at $17?

Howard
Howard

This should be obvious to do, but as a public service, just bookmark the following links and you can roll your own Dallas daily news for free:

http://www.nbcdfw.com/news/loc...http://www.myfoxdfw.com/http://www.bizjournals.com/dal...http://www.publicbroadcasting....http://dfw.cbslocal.com/catego...http://www.wfaa.com/news/local

And throw in whatever blogs from the site we're on (the Observer), Pegasus News and D Magazine to include more local news, scenes and gossip coverage, and at that point you really have to wonder what the hell the DMN has to offer online that is worth paying.

heyheymama
heyheymama

The hubby and I agree with other commenters: DMN content - whether on paper or electronically - just isn't there. We are very satisified with the DO content, both on paper and online, and have been saying for years that we get far better local news coverage from you all. I peek at the DMN website once in a blue moon; we do get a Sunday paper delivered, only because the WSJ doesn't publish on that day.

Halldecker
Halldecker

Belo's last major innovation was the Q-Cat.

Remember that one?

TimCov
TimCov

Let's see, I spent an average of about 10 minutes a day (~300 minutes per month) on the DMN web site. Compare that to other digital subscriptions I pay for:Netflix - ~1200 minutes per month and I pay less than $10Youtube - ~300 minutes per month and I pay nothingWorld of Warcraft - ~1000 minutes per month and I pay $15 per month.Other News Web Sites - ~1200 minutes per month and I pay nothing.

From what this article is describing, the main thing behind their pay wall will be opinion pieces. If I want to read people's blogs, I can do that for free at other web sites (like the Dallas Observer). I see no real value in paying for one of their subscriptions.

cp
cp

I have paid for s full subscription for 11 years until yesterday when I canceled it.

John_McKee
John_McKee

Pay them money? No, I do let them derive revenue off me when I visit their website. Their content is worth exactly what I am sometimes willing to pay for it, having my eyeballs seared by their ads when I visit their site and my demographic as a viewer of their website.

I do and will pay for content with a credit card that I consider valuable, I do not think that the DMN has that value and if they want to make any revenue me either make their content valuable enough to me to pay for it or charge me exactly what I am willing to pay for it now, viewing an ad for AT&T U-Verse.

Jay Hawk
Jay Hawk

Yes, but they've also cut staff and resources to turn that profit and not have any debt. Is what they have left worth what they're charging? That remains to be seen.

Jay Hawk
Jay Hawk

Saw that too - you don't want to charge for that.

Mister_Mean
Mister_Mean

Always liked those bad liniks to the Denton Record Chronical on thier blogs.

Rooster
Rooster

Congrats on said boyfriend. Miss your blog though.

cp
cp

Paperbacks are pretty cheap at Half Price Books. Who says you need a newspaper?

But I understand, I used to have this little ritual where I couldn't wait for Wednesday Happy Hour, so I could grab a DO fresh off the press, go to my local watering hole and just read the whole thing. But Robert explained to me that they went with another printer- one that bound the DO together with staples- and so the deliver times are not the same. And since Thursdays and Fridays are out, and I just can't wait for weekends to turn into Monday so that I may continue my ritual, I've been reading stuff at home, online instead. Now granted, it's not as fun (but it HAS saved me a ton in bar tabs), I have gotten used to a little thing known as CHANGE.

Montemalone
Montemalone

Just put your laptop in front of you.Although I admit, the keys will get sticky while you're eating.I use lots of alcohol and q-tips.

LaceyB
LaceyB

Believe it or not, I ran 2, up til this xmas. Film companies, to be exact. Which makes it hard to get a desk job, when all you've done is manage & go to school, at the age of 29.Alas, had to conform to industry standards on apple from PC on both writing & editing software, keep electronic records, everything my business school taught me to do (some on paper--thanks, UTD!), had to go on websites, computers, etc. Also, as a teacher, everything becomes electronic, and, that profession is dragging its heels. Had to teach my master teacher how to use Word, attach with email, etc.So, yes, I get your point...as a youngster.

Tom L (No, Not That L)
Tom L (No, Not That L)

So you're saying ... what? That Moroney has a tough job ahead of him? He sure does. That he shouldn't listen to any snarky comments because he has such a tough job to do? Yeah, that has really worked out well for the CEO of Blockbuster, hasn't it?

DoubleOJoe
DoubleOJoe

"he is trying to stay ahead of the curve and not be run over by being behind it."

I can see the tread marks on his back from here. If Moroney wanted to stay ahead of the curve, he's about 15 years too late.

ScottsMerkin
ScottsMerkin

I would vehemently disagree that DMN has a unique product the people are willing to buy. The product sucks but its the only daily product available to people who dont have a computer or smart phone. Anyone tech savvy enough to have one of those is smart enough to know they can get the news free from all the other local news outlets and if you want it Dallas specific you have the observer. Now unless you just have to read Steve Blows opinion columns, and to be honest I will miss laughing at his idiocy, There is nothing I need form the DMN. You dont get non biased reporting there, you get reporting based on what Lepp and the Belo want you to know from the so called "paywall pieces" they will have

LaceyB
LaceyB

My Lactose-free never goes down. Still cheaper than organic by about a quarter, and still stays good for about a month (and is sweeter), but, bread is supposed to go way up this year, if I remember correctly.

Anyone know if they sell Lactose-free at Aldi? May be worth the bus ride...

cp
cp

Than GAS... milk is cheaper than gas

Mister_Mean
Mister_Mean

Thank you Howard. How about the comics? Any suggestiions?

LaceyB
LaceyB

TimCov--You are awesomely organized & seem quite truthful. Most guys I've been with are more like:~5400 min WoW/mo.~600 min YouTube/mo.~4 min buying a woman a drink/mo(Rest of date night-45 min) trying to hook up based on only buying that one drink and being a super-douche.45min- wondering why the strategy didn't work driving alone back to Cedar Hill (or burb) while whacking it & trying not to swerve or speed.

I like your time management way better. Much better balanced.

mark zero (Jason)
mark zero (Jason)

I always wonder if they do that to boost the click-throughs of that paper.There's no other reason I can think of to have an article hosted at DMN one day, with people commenting, then the next day have it be at DRC. And it's quite annoying to have to re-login.

LaceyB
LaceyB

Aww shucks. I have to say, wasn't sure I had a lot of followers. Got some to tell still. Stay tuned. There will be more, oh yes, there will be more. Www.baddatesindallas.com

Thanks so much! Made my day!

Rooster
Rooster

You are not dragging me into the 21st century. I refuse to go....

Mavdog
Mavdog

really? ALL "the product sucks" in your opinion? then you are probably not a customer of the paper today and you're unlikely to be a customer tomorrow when it is pay as you read digital.

Me, I do like to read the columnists (not blow, for he truly has an eponymous column...) like cowlishaw, taylor and sherrington; and the local news stories, and yes occasionally even the editorial page. There's always the investigative pieces, such as problems @ UT Southwestern and Parkland, let's not forget who broke the EBJohnson scholarship brewhaha.

cp
cp

If you consider their version of Silk (which is on-the-money and I wouldn't be surprised if its Silk's own "private label"), then yes, they do.

Guest
Guest

Lacey, find somethign else to do.

Mister_Mean
Mister_Mean

Thank you for the link to the comics. I can now pack up my Q-Cat and live in peace with out the DMN!

Ed D.
Ed D.

I use chron.com for most of my comics needs but there are several good options, including the Seattle Post-Intelligencer's site.

TimCov
TimCov

Hey, I'm married and hate bars. My wife and job take up the rest of my time.

John_McKee
John_McKee

Let's also not forget that they endorsed her nutjob opponent because they didn't bother to do a Google search on him before endorsing him and their embarrassing retraction, their awful reporting on the TRP and their failure to disclose their conflict of interest when cheerleading the convention center hotel. They often function as nothing more than a mouthpiece for the Dallas Citizen Council.

Yes, they have broken some major local stories but they are hardly a beacon of journalistic integrity in our city.

luniz
luniz

It sucks compared to the NY Times, Washington Post, Wall Street Journal, etc. It's an inferior product compared to those at a greater price. It should be a local supplement to national papers at a much lower price point.

ScottsMerkin
ScottsMerkin

wierd, they may have broken the story, but within an hour, every news source was reporting it. So if you want to pay $34 or $17 a month to know a story 30 minutes before me then fine. I sure hope the news stations dont start charging me to watch their invetigative stories. I read the DMN website daily, I like Evan Grant and JJT too but Im not going to pay to read their opinion. And anything that they may actually break as "News" will be all over other media outlets shortly. And if I want specialize stories for Dallas by Dallas, Ill come here where my daily blog is free and I have a lifetime subscription that costs me nada

LaceyB
LaceyB

Don't hate on me, just bc I asked about LF milk at Aldi. If it's something else you read that I wrote about, well, you are probably pissed, because I am right on the money, 100%, correctomundo. I'm not hurt. You shouldn't be, either. Wasn't about YOU, just likely, people like you, on $2 Tuesday at Primo's. But, if you're doing it, I'm gonna call you out. So don't. Easy peasy, right? Don't hate. Comment on the issues. Today was greatness. You should have been able to find something other than me, I hope.~~Kisses

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