Dear Editor,
Stabroek News has a remarkable record in defending whatever vestige of democracy is left in Guyana. SN like newspapers all over the globe is facing an information perception crunch and it is getting worse with the government’s attempt to starve newspapers of government ads. Understandably, SN generates the most online traffic in the nation for a newspaper and wants to benefit from it. The question is how? This move to get paid online subscriptions is not a financially prudent one. I submit that the cons outweigh the pros. Firstly, the diaspora target group living in the developed world does not pay for news even if they could afford it. Newsday tried this and it backfired spectacularly. Newsday spent US$4 million on a new website and got only 35 subscribers some 3 months after launch. New York Times is getting a backlash over their attempt. Fundamentally, with so much news available on the internet those who can actually afford it refuse to pay for it. Secondly, cost is an issue. I could get the New York Times online edition for US$49.95 per year plus all kinds of perks. SN costs US$86.40 per annum. Third, the target group will only pay if the product delivers special information such as the Wall Street Journal which actually helps one make money. Quality is paramount to payment. SN is excellent quality for Guyana, but isn’t good enough to attract fees from a large chunk of the 15,000 daily overseas readers.
Fourth, these overseas readers have unlimited internet access from their homes, phones and offices. They can access SN’s competitors quite easily online. Fifth, the overseas readership mostly accesses the site to scan the news. A minuscule percentage write letters and post comments. They will simply go to SN’s competitors to scan. Sixth, given the extensive level of internet access in the diaspora community and the fact that SN’s website has been in existence for several years, the current 15,000 per day overseas online readers is likely near the maximum market reach for this group. Any future growth in numbers from the overseas contingent of online readers is likely to be slow. This market has stagnated. Seventh, the cost benefit analysis does not favour SN with this decision. 25% or 5000 of SN’s daily readers are in Guyana. It is cheaper for them to buy the newspaper in Guyana. Overseas readers who cannot buy the physical newspaper are being asked to pay more with this plan. The 5000 in-Guyana visitors will not pay US$86.40 per annum to read the news online. Therefore, that 5000 is a virtual zero revenue group. The 15,000 overseas daily readers will not pay, not because of affordability, but because of mindset. A scan of responses to this announcement indicates that SN would probably get a maximum of 100 to 200 subscribers per annum when it launches its paid service in December. This is US$8640 to US$17,280 in yearly revenues coming from the overseas readership. Is this enough to offset the loss of traffic and the resulting loss of existing and potential website ad revenues? SN will lose readership which will plummet from its 20,000 per day to about 5% to 10% of that number. That severe dip in readership will assault existing ad revenues from the site which are based on traffic.
Eight, SN has a clear advantage over the competition with its website’s comments section and its interactive nature. A move of this nature is inopportune exactly at the time when internet bandwidth has increased in Guyana (although price is still problematic), the government is launching a hare-brained scheme which will put 90,000 computers into the hands of the people rather than schools, and the government is expanding its own bandwidth in the future putting more government offices on the web. The future is advertising. SN would be foolish to decimate all its hard work over short-term gains and watch its competitors copy its methods and profit in the coming brave new world. Ninth, Guyanese people are inherently cheap. They will seek the cheapest option even if they could afford it. Tenth, the target market in the diaspora is accustomed to free news from the West Indian publications which make their income from advertising. There is great opportunity to increase revenues from advertising. Given its current traffic, SN could also shift into other areas such as public polling and surveys. Eleventh, the target market is accustomed to getting perks when asked to pay a subscription such as the Wall Street Journal. Newsday online is free to Optimum Cable customers. Is SN offering any value-added bonuses? Twelve, I wonder if SN made a mistake with the cost of newsprint. US$840 per tonne is inconsistent with the market prices for newsprint in the last few months. SN should utilize its clear advantage to expand its advertising revenue rather than seek online subscriptions particularly on the cusp of an approaching internet access tsunami in Guyana. A reduced fee schedule is certainly another option for SN to consider.
Yours faithfully,
M Maxwell
Editor’s note
The management of Guyana Publica-tions Inc (GPI) has thought carefully about the decision to commercialize the website and is well aware of the adverse experiences of other newspapers. Nevertheless this is the way of the future and some newspapers have found models that provide a satisfactory amount of revenue from online subscriptions. Increasingly, there will be migration from print to online subscribers and the Stabroek News and the Sunday Stabroek must be properly positioned for this change. The trend in the online media industry at the moment is oriented towards ensuring that content is paid for.
The comparison of rates with the New York Times (NYT) is inapplicable here. The NYT has a much larger subscriber base than SN and could therefore afford to pitch its rates much lower. We do believe that our online edition provides valuable information now, and there are ongoing changes which we believe will make it even more useful to readers particularly as the general election approaches.
GPI is well aware that there are other sources of information on Guyana and these will be used by those who are not prepared to pay. The company is however confident in the quality of its output and its credibility. GPI can also reasonably query how free online readership, aside from Google advertising, has enhanced the position of the newspaper.
Thirteen years of investment in a free website has not significantly improved the company’s bottom line and has not protected it from a vicious ongoing attack by the government. There is undoubtedly much goodwill as a result of the free service but nothing else at a time when it needs to continue to grow revenues like every other private newspaper. We have decided that print subscribers will not be further burdened at this time.
The time has therefore come for the potential of the SN website to be monetized. Interestingly, many of those raising objections to paying for the online service have in the past urged that GPI free itself from dependence on state advertising. This is exactly what has been embarked upon and each user whether print subscriber or online reader should pay for this service.
It is not accurate that overseas subscribers will have to pay more for access. Of the options offered only the daily and weekly passes work out to be more expensive because of the processing costs associated with such small transactions.
Some readers and others who have commented on the subscription service have blithely asserted that there is a vast pool of advertising revenue waiting to be harvested by GPI. Such views are misinformed. Domestically the advertising market is depressed and the same pertains to important segments of the overseas market. We continue to make strenuous efforts for local advertising and for ads on the website not taken up by Google. As of now there are no perks on offer save for the planned increase in content that will be available.
The figure quoted for newsprint is correct and we have since been quoted an even higher figure.
As an aside it should be noted that there will still be free content on the website – editorials and letters in particular – and stories with important public service value. We reiterate that the cost for providing credible coverage across the length and breadth of the country is significant and we do this extensively – coverage of the remote community of Tobago in the North West being a recent case in point.
Some readers online have suggested that because they subscribe they should be allowed to comment unedited. That will not be so. The subscription is for the news stories and Stabroek News retains the right to edit these comments in line with the company’s rules.
The first subscription for the online service was paid for today and the company is fully confident that it has embarked on an initiative which is crucial to securing the future of the newspaper.
We thank Mr Maxwell and the many others for their valuable comments on our commercialization plan for the web edition.
