GateHouse freebies are stifling potential competition

By Billy Dennis on July 8th, 2007

Via the Springfield State Journal-Register online editor’s blog:

We here at sj-r.com are in the process of making some major changes to the site. One of them involves getting rid of the section of site that was available only to subscribers who signed up for a “Login” account. We completed that change Thursday afternoon and, as a result, removed the “Login” link.

For the uninitiated, sj-r.com has always been a little different when it came to newspaper Web sites. We only posted certain newspaper stories onto the part of the Web site available to everyone for free.

If you wanted to see additional newspaper content online, you needed a password-protected “Login” account, which was available for free to newspaper subscribers or for a monthly fee to those who don’t pay for the newspaper.

Those days are now gone. No more subscriber accounts or passwords. Everything we’re going to offer on the site is available to everyone.

I’m tempted to say this is a move in the wrong direction (more on that later). What the industry as a whole needs to do make the Internet it’s primary method of delivering it’s product: news. Right now, their deliver their news by cutting down treet, turning it into paper, deliveriing this paper across the nation (alobng weith barrel upon barrel of ink), applying the ink to paper, then delivering, often by hand, from one door to another. Or, they can press a button and publish the exact same newspaper articles on the Web.

So what’s stopping them? Doesn’t GateHouse Media (owner of the SJ-R and the Peoria Journal Star) want to pinch pennies?

Well, at this exact moment in time, advertisers aren’t yet as accepting of Web advertising as they newspaper advertising. That’s changing as online ad revenue is growing while newspaper ad sales are shrinking. And for some reason people seem more willing to spend 230.10 every year to have a paper edition of the SJ-R (with its 12-hour old news) delivered to their doors ever morning (maybe) than they are willing to pay perhaps $5 or even $10 a month to have access to the same content of delivered to their homes computer 24/7. This paid version could include access to the newspapers entire online archives, online comics (potentially unlimited in number) and coupons.

I would rather pay $10 for the Journal Star online (provided they put ALL their content on their site; they don’t now) than pay $221 through a subscription. So will the nation’s increasingly Internet savvy and wired news consumers.

So why not bite the bullet now and charge for a fully-loaded online version? It can’t hurt.

Actually, it could. As soon as GateHouse publications start charging, then online-only start ups can start charging too without having to compete against the mainstream media’s free version. I’m convinced that’s why GateHouse told the SJ-R to stop charging. GateHouse wants to make it impossible for anyone to compete with them.
And I think a case can be made that when MSM gives away their content for free, it’s not for the benefit of consumers, it’s to their detriment by making it financially more difficult for competitors to go into business. Perhaps one day, we’ll have officials at the federal level who actually work for consumers. When’s the last time the feds said ‘no’ to a gready media corporation?

Hat tip: Marie.

GateHouse,Springfield,State Journal-Register,Peoria Journal Star,media monopolies

10 Responses to “GateHouse freebies are stifling potential competition”

  1. Chase Ingersoll says:

    Excellent analysis.

  2. anonymous says:

    Wow, you want to pay $10 instead of $210. Fantastic business model. Newspapes would stay in business for decades under this plan. Simple fact is that the industry has learned that people don’t want to register at all even for free sites, let alone pay for a site. But you are a pundit.

  3. Billy Dennis says:

    Perhaps I was unclear. That’s $10 per month compared to $210 a year, or $120 v. $210 for one year of home delivery or God knows how much to buy it from a newsbox every day.

  4. AnotherExJSer says:

    GateHouse Web guru Howard Owens appears to be unalterably opposed to charging for online newspaper content. He spends considerable space on his blog arguing that it’s self-defeating.

  5. Billy Dennis says:

    JSer: The smartass reply would be that he knows better than I the value of the stories that appear in GateHouse newspapers.

    Seriously, though, they DO manage to convince people to buy the dead tree editions. Is the same information unsellable in digital form? I think not.

  6. Eyebrows McGee says:

    “So will the nation’s increasingly Internet savvy and wired news consumers.”

    The nation’s increasingly Internet savvy and wired news consumers expect online content to be free.

  7. Billy Dennis says:

    They can expect what they want. It costs money to get the news. It’s vastly mroe expensive to print news as opposed to posting it online. They are going to get online news whether they want it or not. Eventually, they WILL be charged for it. TANSTAAFL.

  8. Mister Ed says:

    My tired old eyes can only read so much on the internet before the headache begins. I don’t have that problem reading the printed word. Mister pundit you might find this out when you get a little older.

  9. Somebody says:

    Wonders never cease. Bill and I actually agree on something.

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