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Letter from the editor: Few newspapers charge for online content

Big change came to three newspapers on the Iron Range last week. If you wanted to access the Web sites of the Mesabi Daily News, the Hibbing Daily Tribune and the Grand Rapids Herald-Review, you had to pay.

Big change came to three newspapers on the Iron Range last week. If you wanted to access the Web sites of the Mesabi Daily News, the Hibbing Daily Tribune and the Grand Rapids Herald-Review, you had to pay.

You could pay by being a subscriber to the papers' print editions. In that case, the Web edition would come as a free extra. Or you could pay separately for only the Web edition -- $6.95 a month.

The three papers are taking a bold leap. Most newspapers around the world have refrained from the paid-online model, preferring instead to generate readership and then monetize it with advertising. It's the same model that has worked for centuries with our print editions.

Wait a minute, you say. What about that subscription I buy for the News Tribune? Or those 75 cents I plunk down daily -- $1.50 on Sundays -- at the convenience store?

Circulation revenue for newspapers makes up only about 20 percent of our overall revenue. The rest comes from advertising. And that 20 percent really just covers the cost of printing and distributing the paper. Salaries of people in most departments, as well as other costs, always have been paid with advertising revenue.

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But if you've been following the media industry lately -- and I mean all aspects of the media industry, including radio, TV, magazines and billboards -- you know: Advertising revenue is down. It's partly because of the recession but also because of some fundamental changes shaking up our business.

So media companies, including ours, have been looking for new revenue from new places. And I give the three Range papers credit. They're trying something new. Will it work? Even they acknowledge they aren't sure. But in a story in our paper last week, Bill Hanna, co-publisher and executive editor of the Mesabi Daily News, said the papers decided they had to give it a try.

"We've been giving away our most valuable resource, our news content, for too long," Hanna said. Meanwhile, with revenue down, he noted, cost cuts have reduced the size of the three papers' newsrooms.

The same dynamics have been at work at the News Tribune and at newspapers nationwide. As it has occurred, more newspapers have been talking about charging for their online editions. Several large media companies have met to discuss how they would do it. So far, only the online edition of the Wall Street Journal really has made it work.

Rupert Murdoch, CEO of News Corp., which bought the Journal two years ago, initially discussed eliminating the paper's fee for its online edition. But now he's reversed course and wants to extend the paid model to the Web sites of the company's other newspapers.

So what do we think about all this at the Duluth News Tribune? For now, not much. Like anyone else in the industry -- and most businesses everywhere -- we're looking for new revenue streams. And we agree with the rest of the industry: Our Web sites offer incredibly valuable content. Local news you can't get anywhere else. Photo galleries. Videos. Comment boards (love 'em or hate 'em, people read 'em). And obituaries -- especially popular with snowbirds in Arizona who can't go buy a print edition of the News Tribune.

It's tempting to consider charging for all that value. But at the News Tribune and our parent company, Forum Communications Co., we still think the advertising-based model gives us the best chance to run a strong business based on strong content.

Would our online audience, which averages 25,000 to 30,000 unique visitors every day, shrink if we suddenly asked those readers to start paying even a small amount? Absolutely. Would that make advertising sales more difficult? Yes. Would the revenue from those who agreed to pay make up the difference? We don't think so.

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So we're committed to keeping duluthnewstribune.com free for now. Already, more advertisers are seeing the value of placing their messages on duluthnewstribune.com. We think even more will do so as our audience continues to grow.

Rob Karwath is executive editor of the News Tribune. You can reach him at (218) 720-4177 or rkarwath@duluthnews.com .

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