New wrinkle #1 on newspaper business models

This week I found two new wrinkles on efforts by newspapers to fix their broken business models, being decimated by the commodization of information (including news) in the Internet era.

One new wrinkle was the flyer in the San Jose Mercury News, advertising their new “Mercury News e-Edition.” As the flyer says

Starting August 2008, the Mercury News is offering a FREE TRIAL of the new e-Edition to our current print subscribers. And, as an existing subscriber, you can get access to an exact digital replica of the Mercury News in PDF format every day at substantial savings if you subscribe to the e-Edition. You’ll see very story, picture, and ad for as little as 4¢ per day. Offer ends August 31, 2008.

Based on the flyer, I tried the demo, which was very versatile:

• Unlike the usual HTML version, you see actual page images, with photos and ads.
• It has a much better browsing model than any HTML or PDF solution. As with the dead tree version, flipping through pages is quick and clicking on a given shows the story in expanded text to the right.
• The “jump” is a hyperlink, so you can easily continue with the story.
• Text can be enlarged, an automatic “large print” edition for aging Boomers and pre-Boomers.
• It has a low-res dialup version (marked “56K”).
• You can get a PDF of any page, and download a ZIP archive of one or all of the pages. The PDF is fully printable with selectable text.
• They claim to allow laptop and PDA browsing, although to read it on an airline you’d need to download the PDFs before takeoff.

Minimal digging shows that the Merc is using NewsMemory, a turnkey service that proudly proclaims

NewsMemory offers publishers high-tech, headache free solutions in creating electronic editions, electronic archives, electronic tearsheets, and electronic clips.

Because the NewsMemory solutions are primarily based on service driven and turnkey models, newspapers are able to get started with little or no investment and can immediately begin to create new streams of revenue.

NewsMemory electronic editions are the most “publisher-friendly” e-editions available on the market.

NewsMemory’s technology automatically converts any publication into an online e-edition without the need for heavy PDF downloads, proprietary viewers, or slow plug-ins.

NewsMemory provides a turnkey solution with no need to change the newspaper’s workflow and it seamlessly integrates with existing technologies.

NewsMemory is “electronic editions made easy.”

The turnkey solution comes from Tecnavia, a Swiss company that has been peddling NewsMemory it for more than five years. The service is already being used by Gannett papers, the largest US newspaper chain.

OK, this is a nice technology, generally improved (and more cleanly and cost-effectively integrated) from the conventional dead tree version. The website promotional copy even reminds Bay Area ecofreaks that they can even “Save a tree.” (I kid you not).

But what about the business model? It’s the same old same old — pay us a weekly subscription. All electronic is $59/year vs. $130 for all paper and $69 for a hybrid electronic/paper with paper only on Sunday. (There are some contradictions in the website pricing — clicking through on $49/year becomes $59/year). There is also a suggestion that the newspaper plans on using the e-mail addresses for spamming (under the guise of single opt-in e-mail advertising).

It’s a great solution for people who like the idea of newspapers, but what about those who think Yahoo News or CNN.com is good enough? Are they going to go to the trouble of signing up and paying money?

This online edition makes one thing very very clear. Why do I give a hoot for the national or foreign editor sitting in San José? I don’t need most of section “A” or the national business or sports coverage — I can get what I need from the NYT or LAT or WSJ or Time or Sports Illustrated. What I can’t get from these sources is news of my Almaden neighborhood, San José, or California.

My prediction: within five years, this sort of approach will migrate to a free, local-only paper available online, supported by tightly targeted local advertising. For the national/international news, there will be an electronic front-end provided either by the national chains (Gannett, Tribune, NYT, McClatchy) or syndicators (NYT, LAT/Washington Post).