Sustainable business models

~Southeast Missourian 1 of 10 publishers selected for Google News Initiative Subscriptions Lab

Google is partnering with the Local Media Association and FTI Consulting in seeking to help chart a future path for local journalism. It selected the Southeast Missourian among 10 newspapers to partner with on the endeavor. Most newspapers involved in the study are large metro newspapers; the Southeast Missourian is the smallest newspaper in the group.

"We invited 21 newspapers that were having success with digital subscriptions to apply for this unique opportunity," Nancy Lane, president of the Local Media Association, said. "We were impressed by the letters from their CEOs and the work going on at these companies. In the end, the judges chose 10 that came with a willingness to experiment and a commitment from the highest levels in their company. We're excited to work with this cohort on strategies that can change the trajectory of the newspaper industry."

Part of the selection process was identifying newspapers already experiencing some level of success with digital subscriptions. Since October, the Southeast Missourian has grown its digital subscriptions nearly 50 percent. The early success is due in part to an improved email strategy, updated meter system and a range of promotions.

Other newspapers selected to participate in the lab are The Houston Chronicle, Baltimore Sun, The Buffalo News, The Columbus Dispatch, The Idaho Press, The Portland Press Herald, The Charleston Post and Courier, El Nuevo Dia and The Toronto Star.

FTI Consulting, a global consulting firm, will review strategy and diagnostic modules for each property and develop a scorecard with actionable items. This review includes a mix of quantitative and qualitative research with the goal of understanding reader segments and willingness to pay. It will look at most departments within the organizations and align them with the objective of growing subscriptions.

Many in the news media industry are pivoting, if not making a 180-degree switch to reader revenue. With the emergence of a younger generation more apt to pay for streaming services -- Netflix, Amazon Music, etc. -- some publishers are bullish on the opportunity for news services.

The landscape of how media companies are refocusing strategy to digital subscriptions varies significantly.

The Wall Street Journal, for example, uses a propensity model. Based on reader habits, the technology determines how likely a reader is to subscribe.

Others like the Washington Post and Southeast Missourian use the more common approach of a metered paywall. After so many stories are viewed during a time period, readers are prevented from further access until they subscribe.

The third approach is a total paywall where only subscribers receive access. Many small media companies, including some newspapers owned by Rust Communications -- the parent company for B Magazine and the Southeast Missourian -- use this model in combination with digital advertising. The Athletic, a national sports journalism website, relies solely on subscriptions with the promise of no advertising and a different type of storytelling than its competitors.

"I know from experience that growing digital consumer revenue isn't as simple as putting up a paywall," Ben Monnie, director of Global Partnerships Solutions, News & Publishing at Google, said. "It requires a deep organizational transformation at all levels of the organization, from the newsroom to the marketing department to the product and technology teams. We started this program to go deep with a group of partners to accelerate this transformation and with FTI Consulting and the LMA, scale it to the rest of the industry, one publisher at a time."

Google noted that while some large publishers have made digital subscriptions a central aspect to their business model, there has not been a clear direction for metros and local publishers. But it's vital to the long-term health of quality journalism.

"We expect the GNI Digital Subscriptions lab will supercharge our strategy and give us tools we wouldn't have on our own," Jon K. Rust, publisher of the Southeast Missourian and co-president of Rust Communications, said. "Unfortunately, too many communities and institutions have been diminished -- and, increasingly, endangered -- by the deterioration of local news coverage. Building a business model that supports community journalism in a world of increasing digital reliance is important not just to Cape but to the country."

Why does your local newspaper matter?

1. It's a primary source for how consumers stay informed on local issues and candidates. Newspaper readers are more likely to be voters.

2. It connects readers with their community, covering both the hard-hitting topics, as well as championing important causes and highlighting individuals and groups who do important work.

3. Local newspapers paint a picture of the communities served. Whether it's a business looking to relocate or an individual moving to town, the local newspaper is a source for learning more about a community.

4. Newspapers, be it in print or online, are effective vehicles for businesses to market their goods and services. It connects buyers with sellers.