Newspaper: Charging or not for online content? Numbers for 9 scenarios.

>> Direct access to our online spreadsheet.

UPDATE 2 (2/9/09): We added a new tab to the online spreadsheet with other numbers.

UPDATE 1 (2/8/09): Based on your feedback (thanks to all), we have updated the numbers and uploaded a new excel file.

The paid model scenario is back into the conversation. Is it a good idea for newspapers to go back to OR begin an online full or partial paid model? We have been thinking about different scenarios, and calculating the revenue outcome. We based our numbers on figures from different newspapers in North America.

Base assumptions:

• 100,000 print subscribers
• $14.75 / month for the print version (7-day)
  
• Website with 500,000 UV and 10M PV
• $10 CPM (3 impressions per page)
• $.20 CPC with .5% CTR
  

Based on these figures, their actual online revenue is approximately $1.8 M.

Then we ran the numbers for the following scenarios:

1. No more print version. All print subscribers are subscribing to the website that is 100% behind a paid wall. NOTE: It is very 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.
   Revenue = $6.1 M
   
   
2. 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 = $1.8 M
   
   
3. Same assumptions as scenario 2, except the subscription price is halved to $7.50 / month.
   Revenue = $943 K
   
   
4. Same assumptions as scenario 2 and 3, except the subscription price is again halved to $4.75 / month.
   Revenue = $613 K
   
   
5. 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 = $907 K
   
   
6. Same assumptions as scenario 5, except the subscription price is halved to $7.50 / month.
   Revenue = $472 K
   
   
7. Same assumptions as scenario 5 and 6, except the subscription price is again halved to $4.75 / month.
   Revenue = $307 K
   
   
8. Mix of free and paid models. 60% 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 $4.75 / month.
   Revenue = $1.6 M
   
   
9. 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 $4.75 / month.
   Revenue = $2.0 M
   

You can see these figures on my spreadsheet. You can also download the excel file to play around with the numbers.

We didn't take into account the cost side. However, none of these scenarios would cover the actual costs of newspaper operations. It would be interesting to have the acquisition cost / subscriber and advertiser. 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 share a comment. Update the file and send it back to me at nwang(at)mignon-media(dot)com.