Saturday, November 5, 2011

Local News 2.0: Gazette Begins Groupon-style "Deal of the Day" Service

CORRECTION: The Gazette has contacted Maryland Juice to make a few significant corrections to this article. It turns out the Gazette opened the "Daily Deal" revenue stream in 2010 -- not recently. Perhaps they even precede the Washington Posts "Capital Deal" program. I guess local papers were innovating earlier than we thought. Oops!

  1. We started the Daily deal on 11/17/2010, just about a year ago.  Not just recently as your article states. 
  2. No idea was migrated from The Washington Post to The Gazette, including The Daily Deal.  We chose to do that on our own because we could see from Groupon, Living Social, and other such groups that there were revenue opportunities that looked promising. 
  3. We are not the local news arm of The Washington Post….we run independently of The Post Newspaper.  We do provide some content to their Local Living section of The Washington Post Newspaper, but our newspapers are independent companies within The Washington Post Company, and not a part of The Washington Post Newspaper
UPDATE: An area journalist has pointed out that even Kaplan is now failing to prop up the Washington Post's revenue. See this article: "Washington Post third quarter newspaper losses exacerbated by Kaplan declines."

As newspapers increasingly struggle to find revenue models in the digital era, we are seeing novel new activities from area papers. Some, like the Baltimore Sun, seem slow to think beyond the traditional combo of subscription-fee and advertiser-driven revenue models. In fact, the Sun has begun doubling down on this model by charging readers to see articles. Note: it takes a few seconds for the "Sun Block" to kick in, so if you quickly hit Ctrl-A, then Ctrl-C, you can copy the article content into a word processor to read it without any annoying obstructions. :)

I think charging readers for news content is a long-term losing proposition (unless you are a trade publication), but I will write more about that later. For now, let me just say that portions of the newspaper industry seem to be following the path of the record companies and film/tv industry in being very slow to adjust their business models to the new world order of the Internet. In fact, if you count on advertising revenue for much of your financing, it seems difficult to reconcile that with the lower number of pageviews you will get when you start charging readers for your content.

As Maryland Politics Watch often mentioned, The Washington Post has the ability to subsidize its news coverage through profits from its Kaplan test prep company. Now WaPo and its local news arm, The Gazette, are kicking in yet another novel revenue stream -- by competing with "deal-of-the-day" websites like Groupon and Living Social. The Post had already been doing this for months, under the name Capitol Deal, and I am guessing that is a successful model since they've migrated the idea to The Gazette. See the image to the right.

Basically, it looks like the Post & Gazette are looking for new ways of monetizing their reader base and email lists. Very interesting. What next, Gazette-branded burger chains? Mmm.

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