>> New updated online spreadsheet
>> Excel file version
In partnership with the NAA (Newspaper Association of America), and the help of Borrell Associates, AdPerfect and Centro, we have put together a new updated spreadsheet exploring different scenarios for paid online content for 50K circulation newspapers. We have run numbers on scenarios ranging from fully paid to mixed paid / free.
Our previous and first post showed 9 different possibilities for paid online content scenarios for a 100K circulation newspaper. We based this first set of numbers on an average of publicly available and proprietary data from North American newspapers (some of which are our clients). This set of scenarios was just a first step in running numbers to take a look at the possible revenue generation.
In this post, we run numbers for a 50K circulation paper to be closer to the average US newspaper.
* 50,000 print subscribers
* $17 / month for the print version (7-day)
* Website with 250,000 UV and 2.5M PV
* $12 display ad CPM
* $4.50 local remnant ad CPM
* $0.95 national remnant ad CPM
* 5% unsold inventory
* $.20 CPC with .36% CTR for contextual ads
* In this version we have also introduced a subscriber acquisition cost of $49.18.
For an approximation of the current online revenue based on the above assumptions, the online revenue is a little over $700K.
Then we ran the numbers for the following scenarios:
No more print version. All print subscribers are subscribing to the website that is 100% behind a paid wall. NOTE: It is highly unlikely that 100% of existing print subscribers would sign up for the web version.We are just demonstrating what could be the potential maximum revenue if all 100% did at HALF the print sub price.
Revenue = $5.2 M
Great direct marketing campaign resulting in 2% of current UV subscribing to the website. 100% behind a paid wall. They pay the same price as the print version. For all of the following scenarios, the print version still exists.
Revenue = $1.0 M
3rd scenario: Same assumptions as scenario 2, except the subscription price is halved to $8.50 / month.
Revenue = $524 K
4th scenario: Same assumptions as scenario 2 and 3, except the subscription price is again halved to $4.25 / month.
Revenue = $269 K
5th scenario: Direct marketing campaign resulting in 1% of current UV subscribing to the website. 100% behind a paid wall. They pay the same price as the print version.
Revenue = $517 K
6th scenario: Same assumptions as scenario 5, except the subscription price is halved to $8.50 / month.
Revenue = $262 K
7th scenario: Same assumptions as scenario 5 and 6, except the subscription price is again halved to $4.25 / month.
Revenue = $135 K
8th scenario: Mix of free and paid models. 60% of the site's content is free. There still are 250K UV. 1% of these UV subscribe to the paid part of the website for $8.50 / month.
Revenue = $686 K
9th scenario: Mix of free and paid models. 80% of the site's content is free. There still are 500K UV. 1% of these UV subscribe to the paid part of the website for $8.50 / month.
Revenue = $828 K
You can see these updated figures on my spreadsheet (on the 2nd tab named "50K circ"). You can also download the excel file to play around with the numbers.
As mentioned in the first post, we didn't take into account the cost side (with exception of the introduction of the acquisition cost per subscriber). However, none of these scenarios would cover the actual costs of newspaper operations. In our next iteration, we will factor in the cost side to take a look at net revenue. It will be another one of the critical factors on the end-decision of whether or not to go paid.
If you think something is missing or doesn't make sense, please comment. Also, if you have any suggestions, feel free to let us know. We're always looking to improve upon the analysis. Please email me at anytime at nwang (at)mignon-media (dot)com.
A big thanks to Beth Lawton at the NAA. Thanks as well to Gordon Borrell of Borrell Associates, Inc., Sean McDonnell of AdPerfect and Shawn Reigseker of Centro for their assistance.
More to read:
- Paying for online news: Sorry, but the math just doesn’t work. (Martin Langeveld - Nieman Journalism Lab)