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L.A. Times Hoping Time Is Right in Move to Monetize Niche Content

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Things could get very entertaining after Tribune Co.'s largest newspaper walls off Calendarlive.com.

Do newspaper Web sites cannibalize their print circulation? That is, are people dropping their newspaper subscriptions because they can just go online and read that newspaper content for free? Perhaps, though there is little hard data to support this one way or the other.

Tribune Interactive and the Los Angeles Times researched the subject and, faced with inconclusive results, decided to take the offense: On August 4, LATimes.com walled off the online entertainment section, Calendarlive.com. Now people who don't subscribe to the paper will have to pay $4.95 a month, or $39.95 a year, to access Calendarlive. To entice readers, the Times is touting improved search and listings, and discount coupons.

Times executives say it is too early to gauge changes in traffic, or subscriptions.

While paid content is popping up all over online, and experiments abound, my first impression was that this was a bad idea. Who would pay that much for a limited amount of content? Wouldn't it hurt the national exposure for top-notch movie reviewers Kenneth Turan and Manohla Dargis? Won't surfers simply flock to the plethora of free competition online?

But most of all, haven't LATimes.com readers been through the wringer enough? These are the same people who had to register for the site -- with some people having to register a second time after the paper was purchased by Tribune Co. They've also had to endure third-party e-mail advertisements as a hidden cost of registration. And let's not forget the flurry of pop-up ads.

Thankfully, the Times has tried to improve on all those customer service fronts, changing pop-up ad frequency to once a day, targeting their e-mail ads more precisely -- and reviewing the whole "ad mail" service -- and trying to make the move to paid content with Calendarlive.com hassle-free. The paid wall was only erected last week, but so far, "there's not nearly as many complaints as I expected," said Janette Dean, head of customer service and archive supervisor at LATimes.com.

Dean points out that paid content is hardly new for news sites, including the Times. Even before the Web, you could only get Los Angeles Times content via Prodigy -- the TimesLink service was $4.95 a month for Prodigy subscribers or $6.95 a month just for TimesLink, according to Dean. The pay-or-free conundrum is something that's played out across online content, with little consistency. Certain content has brought in money: financial (WSJ.com, FT.com), pornography, sports fantasy leagues or fan sites. But general news or even entertainment news has been spotty.

A benefit for print subscribers

So why take Calendarlive.com behind the pay wall? Mike Silver, vice president of strategy and development at Tribune Interactive, looks at it another way. "We want to redefine what it means to be a subscriber to the newspaper," he said. Tribune Co. owns the L.A. Times and 10 other newspapers and their sites. "Offering online [premium content] to print newspaper subscribers would enhance the benefits of the print subscriptions. There was also a desire at the company to develop new revenue streams and ways to derive benefits from our online publishing activities."

Joe Russin, assistant managing editor for multimedia at the Times, concurs that the idea was to enhance its relationship with print subscribers, and he downplays the idea of making a lot of money with online subscriptions. Russin says Calendar's online life has had a "varied history," noting that at one point it was almost spun off from the newspaper site. He adds that the section also beefed up its online editorial staff, aligned with Citysearch, then cut its staff after the paper was purchased by Tribune Co.

That checkered past sounds vaguely familiar for the folks at AOL Time Warner, who have gone through pay-to-free-to-pay models, with a wall being slowly but surely erected around all magazine content online this year. The Wall Street Journal's Matthew Rose recently wrote that the latest Time Warner experiment has been a "remarkable success," with increased subscriptions and "traffic for most titles is steady."

Despite the gloomy talk about how difficult it is to support free Web sites with advertising, Silver notes with pride that his interactive division is seeing a serious uptick in advertising and classified revenues and has been profitable since last year. But why not squeeze out a few more dollars and keep things diversified? Just because Tribune Interactive is doing well in current revenues "doesn't mean we shouldn't be also looking at opportunities to directly charge consumers for things that we do online," Silver told me.

Though many smaller market newspapers, such as the Albuquerque Journal, have walled off much of their online content, it's interesting that Tribune Co. chose its larger-market papers to do experiments. It launched a premium BearsToday service for the Chicago Tribune site, and a premium package for Newsday.com similar to NYTimes.com (crosswords, Long Island guide, archives, etc.). But Silver won't rule out paid content at his smaller-market newspaper sites, including walling them off completely.

Helping the competition?

The Times' Russin says there were a lot of people at the paper who were concerned about the Calendarlive.com wall, and the loss of readership. When registration was implemented at the site, LATimes.com lost 25 percent of traffic, and it took a year to recover to earlier levels, Russin says. But the occasional reader who stops by the Times site through, say, Google News, isn't worth much to the business. A smaller set of regular visitors -- and especially those in the local area -- are worth more monetarily to the Times.

But Russin says he's torn as an editorial staffer. He likes "bopping around" online and reading free content, but he understands that as a business, the Times has to make money to pay his salary and those of other working journalists.

For cost-conscious surfers, even in the Los Angeles metro area, there are other free options online. For general movie and book reviews, there are hundreds of sites. For local entertainment listings, there's the Los Angeles Daily News, LA Weekly and more -- online and off.

David Poland, an L.A. entertainment writer who pens The Hot Button online, mourned the loss of reading top entertainment reviewers from the Times online, but chalked up all the competitors -- including himself -- who would benefit. "It is a huge gift to The New York Times, which immediately becomes the unchallenged No. 1 newspaper in movie coverage on a national basis," he told me. "On the Web, it helps RottenTomatoes.com, which will become a source for people looking for alternatives. It will help, minimally, the ticket sites that people go to directly for times and ticket info."

So it could give an opening to the little guy, like Poland's Hot Button or his work on MovieCityNews.com. "In the rest of the world [outside L.A.], my little voice about movies is suddenly louder than this massive paper.... That's the funny thing about the Web. Stop updating and they stop coming and the site dies very quickly. The L.A. Times is replaceable. EW [Entertainment Weekly] is replaceable."

Rafat Ali, who runs the PaidContent.org site, was expecting Tribune Co. to do more paid content, but making Calendarlive.com pay was not what he expected. Ali wondered if the move would work in the long run, saying, "There are so many entertainment guides out there." When he lived in New York, he rarely relied on the daily newspapers to decide where to go out -- he went to Citysearch online, or looked at the alternative weeklies. Ali also wondered if people who listed their events with Calendar would want a restriction on access to that information.

As for the cannibalization question for print, Ali notes that there could be other reasons print subscribers are dropping out -- perhaps free news and information at sites other than just LATimes.com.

Keeping the customer in mind

While making money and diversified revenue streams are important for any business, keeping customers happy is just as important. Donn Friedman, assistant managing editor at the Albuquerque Journal, said his editorial staff had to answer support calls when they walled off content. He welcomes the Times' experiment, but says he has concerns about their 14-day free trial, after which you're charged automatically on your credit card. The Journal didn't do that because of expensive chargeback costs when people forgot to cancel, got charged, and reversed the charge.

Plus, you can only cancel your Calendarlive.com free trial via the telephone, on a number that's not staffed 24 hours a day. Still, LATimes.com's Dean says they will accept e-mail cancellations and even voicemail cancellations after hours. They want to utilize the phone cancellation method because they can get live feedback from people and try to improve the site. And Tribune's Silver was impressed by the Times' dedication to making the changeover smooth for customers, especially newspaper subscribers who'd have to input information.

Peter Krasilovsky, vice president and senior partner at Borrell Associates, says that generally it doesn't pay to put newspaper content behind a pay firewall. However, he does like niche content, such as the sports newsletter Packers Online, or the crosswords and news tracker from The New York Times on the Web. Krasilovsky says the Times is on the right track with making Calendarlive.com a niche site, but he has concerns.

"My qualms about Calendarlive are that it cuts off free access to basic newspaper content and doesn't really add new content to what had been available," he told me via e-mail. "The latter is not a prerequisite; the former is. If the L.A. Times wants to charge for simple movie reviews and music reviews and features -- integral elements of the print newspaper -- it should just put the whole thing behind a firewall. I think the L.A. Times is going to alienate an entire generation of potential users by freezing them entirely out."

In the end, the move is an experiment for the Times and Tribune Co., and it's way too early to gauge success or failure. Like every other free-or-pay move online, you might even get free access to Calendarlive.com on some future date -- or you might be paying to see all of the L.A. Times online. How readers react to this move will mean everything.

The Tribune Co. hopes all its paid content forays will bring a domino effect, with more media companies putting content behind walls, forcing the consumer to finally pay some of the cost for expensive editorial content. But the skeptics look at it differently. "Will they go back to a free section?" Poland asks. "Only if they are sane."

[Conflict note: I wrote a regular column called Cybertainment for the Los Angeles Times Calendar section in the late '90s.]

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Correction
This article originally stated that columns by Los Angeles Times media columnists David Shaw and Tim Rutten are now only available to paying subscribers online. In fact, their columns are still available for free at www.latimes.com/ news/columnists/
Story Links
Calendarlive.com
Glaser Online: L.A. Times' Sneaky E-mail Ads
LATimes.com
PaidContent.org
The Hot Button
Wall Street Journal: More Subscribe After Time Ends Free Web-Site Access (subscription required)
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Mike Silver: "We want to redefine what it means to be a subscriber to the newspaper."

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