Chicago Tribune trades in its premium subscription for a metered paywall
Tribune Publishing, along with Digital First Media, wait to hear the fate of ‘staking horse’ bids for the Southern California newspaper properties of bankrupt Freedom Communications, while OC Register executives stay on the sidelines until auction time
Things move at a glacial pace at the new Tribune Publishing. So when the company announced last year during the company’s third quarter earnings conference call that the publisher would move from a premium content strategy for its websites to a metered paywall in 2016, I assumed the move would occur on January 1. The move was made today.
The premium content strategy is a tricky one. First, it helps to have premium content. Premium content should be defined as editorial content that is financially valuable. An example might be new construction bid news by a construction magazine website – the equipment and company news could be open to readers, but the bid news would be behind a paywall.
The Chicago Tribune, though, put all sorts of content behind its paywall, including news that really didn’t belong there (like their independent columnist Robert Feder who covers local media). So, the move to a metered paywall, presumably made by Denise Warren, who was brought in to head digital, makes a boatload of sense.
“We’re introducing a new “metered” approach that will give nonsubscriber access to up to 10 articles each month before being asked to subscribe,” Tribune editors told Chicago readers.
“Those little blue “+” signs on some stories are now gone. That “digitalPlus” designation meant you had to register and subscribe to read many of the Chicago Tribune’s top stories — news exclusives, investigations, editorials, sports columnists and arts reviews among others. Other stories were free.”
What happens to those few readers that signed up for a premium content subscription?
Those readers currently subscribing to the program that was called digitalPlus get moved over to the Unlimited Digital Access subscription program. Since there will no longer be any content labeled as “premium” the paper has to smooth any ruffled feathers by telling the old subscribers that access to content will be limited for nonsubscriber.
The new digital subscription package costs $1.99 per week, or $1.79 per week, or $1.59 per week, depending on whether the reader signs up for a quarterly, annual or two year commitment.
For the sake of comparison, The New York Times charges $3.75 for its basic digital subscription which is supposed to include the website and all apps (it doesn’t if you are already an iPhone and web subscriber because its iPad subscription mechanism is broken).
Both papers are offering the first four weeks at 99 cents.
Tribune Publishing, along Digital First Media, submitted what is known as a “stalking horse” bid for the Freedom Communications assets which include the Orange County Register and Riverside Press-Enterprise.
A stalking horse bid serves as the opening price in a bankruptcy auction and offers certain protections should another bidder emerge at the time of the auction. It was assumed that a group led by Freedom’s chief executive Richard Mirman would submit a bid, they decided to stay out of this round of bidding. The reason may have been to avoid overpaying for the assets. Now, the early bids will set the minimum price at auction, so stalking horse bids tend to be a bit low.
Everyone knew the other two companies would bid because Tribune Publishing owns both the Los Angeles Times and San Diego Union Tribune (the OC Register lies between the two properties), and Digital First Media owns the Los Angeles Daily News, as well as other LA area papers including those that used to be owned by Copley.
(I once used to work for the Hearst owned LA Herald Examiner, and later the Copley owned Santa Monica Outlook, and therefore competed with the LA Times when it was owned by Times Mirror and the Daily News when it was owned The Tribune Company and then Jack Kent Cooke.)
Tribune Publishing has to assume that it can outbid Digital First Media which just last year failed in its attempt to sell itself off. (Digital First Media owned Journal Register Company, it might be remembered, filed for Chapter 11 bankruptcy as recently as 2012.)
But things have recently changed at Tribune, with a new investor brought in. Michael Ferro, previously owned as the owner of the crosstown rival Sun-Times in Chicago, invested $44 million and joined the Tribune Publishing Board of Directors as Non-Executive Chairman.
Ken Doctor seems to think that Ferro has come in like a bull in a china shop (my words, not his).
“Within the Tribune Tower in Chicago, Ferro has shared his own views on company strategy and operations, from big-picture issues down to more logistical details,” Doctor wrote. “In addition, he has visited Tribune executives in both Los Angeles and New York. Those executives, several confidential sources affirm, have been surprised at his forthrightness and sureness, two qualities that come as no surprise to those who have worked with the tech entrepreneur.”
Because there are real estate assets that can be sold off, and both of the initial bidders can use their existing facilities to reduce future costs, coming up with a successful bid may not be a difficult hurdle – at least for Tribune Publishing.
The next step in the process will be the submission of bids by March 11 with the auction set for March 16, according to reports.
No matter who wins, this will leave the winner with more debt as none of those involved have been generating the kinds of profits needed to absorb Freedom Communications using petty cash.