While the Los Angeles Times and the entire Gannett system are clearly hurting for revenues, they are delusional if they really think that they can price access to their content behind paywalls in the same manner as The Wall Street Journal and The New York Times. At The Complainer, we view this as the final death blow to America's local newspapers—and, for lower income Americans, a dramatic reduction in access to non-broadcast local and regional news.
Jeff Bercovici at Forbes provides a nice "not-so-fast" analysis, here:
The Times is unique among newspapers in a number of regards. It is, by general acclaim, the best newspaper in the world. It’s a cultural signifier in a way no other American paper really is: You don’t subscribe to the Times just to read what in it — you subscribe because you’re the kind of person who reads the Times. It has, at great cost, maintained is quality at a time when just about every American newspaper has compromised by slashing its newsroom budget. (The Journal’s an exception to this, although whether its quality has gone up or down since Murdoch took over is a matter for debate.)
And it’s national — moreso than ever. With the tablet edition, a subscriber in Topeka or Duluth can get the same product at the same price as a subscriber who lives in Manhattan. Yet it’s also increasingly local, with regional editions in San Francisco, Chicago and Texas. The Dallas Morning News already has a paywall in place, and the San Francisco Chronicle is planning one. Won’t it be interesting to see how many readers in those markets decide that, if they’re only going to pay for one newspaper, it might as well be the Times?
At the Complainer, we are taking a much more aggressive stance:
We are willing to go out on a limb when we predict that overall traffic will fall significantly when Gannett—and the LA Times—introduce paywalls. Instead of charging readers (for what many believe is less-than-exceptional content), they should have looked at ways to improve advertising revenue by increasing traffic and engaging more out-of-region readers in their online communities.
The New York Times and The Wall Street Journal might be able to get away with digital subscriptions because they have become a truly global newspapers/news-sources of record, with strong, proprietary content driving traffic for global readerships. Few of Gannett’s papers (or, the LA Times) can come close to matching anything close to that level of content—or community. Expect to see growth for the NY Times and the WSJ.
We’ll be shorting Gannett.