WCPO Plays Long Game With Paywall Gamble

WCPO Cincinnati drew both skepticism and a great deal of curiosity throughout the industry six months ago when it started asking consumers to pay for premium online news content.

Little is known so far about the success of the WCPO Insider, as the premium service within WCPO.com is known. The station’s owner, the E.W. Scripps Co., is keeping the results close to its vest for now. But it recently opened its doors wide enough to show that the entire WCPO news operation has shifted in dramatic ways.

Notably, there’s WCPO.com’s significant content ramp-up as the site veers away from the industry’s “if it bleeds, it leads” maxim in favor of in-depth stories in niche areas like business, the arts and education.

To accomplish that, the station added 30 new digital newsroom staffers.  And they’ve had a buoying effect on its broadcast as well as online platforms, station management said — not to mention stirring the competition to respond. (See sidebar, page 20.)

The WCPO experiment, whose boldness derives from an unprecedented request of its users, ultimately has Scripps re-examining its entire approach to TV news content and cross digital/broadcast news production. In the process, it’s reframing its marketing message and has come up with a new plan to give consumers value beyond a pure content play — using the consumer data it’s now more closely collecting and parsing to heighten user affinity and personalization.

This activity comes on the verge of Scripps’ pending merger with Journal Communications’ broadcast and digital operations — potentially widening the impact of the premium foray, if it is deemed a sound business investment and revenue generator.

BY THE NUMBERS

Scripps won’t release any of its digital revenue data from the WCPO experiment so far, nor will it share the size of its investment in the station’s digital staffing ramp-up, although executives there say it has hit all of its internal targets. The number of subscribers “is robust,” according to Adam Symson, Scripps’ SVP of digital.

Ed Atorino, a managing director at The Benchmark Co. and a financial analyst who follows Scripps, said none of those target numbers are likely to be big. “It has minimal financial impact,” he said, adding of the investment: “people are small numbers. The big numbers are buildings and new studios.” But WCPO added no buildings or studios for the new initiative.

However, the publicly traded Scripps’ big picture on digital dollars is available. Overall 2013 digital revenue totaled $40 million, a number that Carolyn Micheli, VP of investor relations, said Scripps expects to see rise by one-third this year. Digital comprises only 5% of the company’s overall revenue, however, and Micheli said that is expected to drop because of digital’s low percentage of political advertising, which itself will rise considerably in 2014.

Headquartered in Cincinnati, Scripps chose WCPO as the “petri dish” for its paywall experiment because of the station’s close proximity to the downtown headquarters. Executives, including CEO Rich Boehne, are known to stop by regularly to check on progress.

“Instead of trying to boil the ocean, we’re using WCPO as a prototype, and we’re building a lot of different trials around that engine,” Boehne said. No plans have yet been revealed concerning what other stations Scripps might pinpoint for premium online services, should the WCPO strategy prove successful

Within the Cincinnati market, WCPO is a strong No. 2 in total day and 6 p.m. news ratings, according to Nielsen live-plus-same day household data supplied by the station. The numbers rank it between Sinclair’s WKRC, a CBS affiliate, at No. 1 and Hearst Television’s NBC outlet, WLWT.

According to Mark Fratrik, SVP of commerce at BIA/Kelsey, total TV over-the-air revenues for Cincinnati in 2013 were $141.4 million, of which WCPO received $37 million, or a 26.2% share. There were also $5.7 million in online revenues, but BIA/Kelsey doesn’t break down that figure to the individual station level.

Since Feb. 8, the WCPO Insider program has been in soft launch on the site. The project originated out of Scripps’ Digital Solutions Group, an entrepreneurial hub inside the company under the direction of Dave Peterson, who had been a member of the DSG team and now serves as digital GM, a parallel position to the station’s GM and one that reports directly to Scripps digital chief Symson.

To outside users, the Insider program is barely noticeable, as small “9” icons denote exclusive content, and marketing for the program has been minimal during its six-month life.

Behind the scenes, however, WCPO has been enmeshed in changes for more than a year, starting with a major hiring boom that brought in the 30 new staffers, plus freelancers. These include vets from daily papers, business papers and alternative newsweeklies, former Patch staffers, a data specialist and even an online radio site director. (WCPO.com itself doesn’t have a radio component.)

“Our business is full of empty promises,” Symson said. “This is not a marketing play. We made the content investment first.”

Peterson said the ramp-up was about building value in consumers’ minds about WCPO’s importance in their lives. “A lot of this is about giving before we ask for something,” he said. For example, users who click on the “9” icon are taken to a page offering them four weeks of premium content for a minimal price. The promo in mid August cost 1 cent, but normally it’s $7.99. And after the month-long trial period, subscribers are asked to pay $79.99 for a yearly subscription.

In addition to its own niche coverage buildup, later this year WCPO will also be the first TV station to join in the digital content-sharing relationship that The Washington Post has extended to a number of local newspaper companies around the country to deepen their value proposition to users.

CONTENT SKEPTICISM

Not everyone agrees that content alone will be enough to convert users to subscribers. “I take a dim view of local content as something people are willing to pay for in the digital world,” said media analyst Gordon Borrell.

“All the data I’ve seen shows that people don’t value local content to a great extent. The vast majority of people do not place a high enough value on local content to pay for it,” Borrell added. However, he said he thinks Scripps is brave to try it, and is a likelier company than any to make it work.

Media analyst Alan Mutter is also skeptical. “Most information is commoditized, so is there some special level of content that’s so valuable that I have to have it?” he asked. “And even if you have this wonderful premium local content, if it’s news and it’s important, everybody else is going to find out about it anyway.”

MARKETERS STEP IN

Overcoming that skepticism or indifference falls to WCPO Insider’s marketers, who came up with a new marketing campaign for the service this summer.

So far, Peterson said that most subscriber conversions are happening when subscribers click to find out more about individual stories behind the paywall, but the new campaign is more sweeping. 

“This is really all about activating the consumer and reframing for the consumer what WCPO Insider really is,” Symson said, in discussing the new marketing.

In the meantime, Scripps has spent months marketing on a more grassroots level, courting local tastemakers, bloggers and agency people, hosting breakfasts and other meet-ups along with pursuing a sampling strategy on social media, allowing people to share some Insider content for a few days.

“Those who transact with us out of the gate are going to be our biggest supporters, the most valuable to telling the story to other people in the Cincinnati community,” said Courtney Bott, senior director of digital marketing for Scripps. “By experimenting and trying different ways of putting stories in the hands of influential people around town to share for us or advocate on our behalf, we might get on to something new.”

Equally important, Bott and Peterson say, is creating an environment around WCPO Insider that provides access to newsmakers and input on the kind of content covered, along with members who feel that they’re making an impact on the Cincinnati community.

As to those consumers, meanwhile, who chafe at the paywall, complaints are handled by Peterson himself and a community team on a one-on-one basis. “We have to have swagger,” Peterson said. “We can’t say we’re sorry. We believe our content has value.”

It’s not yet clear, however, that the community WCPO badly wants to cover has even fully noticed the experiment.

“I’m very active on social media, and I get lots of e-mails from my readers, and I don’t hear anything from the average consumer,” said Carolyn Washburn, VP and editor of the Enquirer, in speaking of the paywall. Those among the media’s core source group in the city, she said, are only somewhat more aware. “I think they don’t 100% understand it yet,” she said. “The source group is kind of watching with some interest.”

Peterson, Symson and others acknowledge that the content play won’t be enough, so they’re now developing member benefits to augment it. The first foray was a Father’s Day offer in June that bundled a one-year Insider subscription with a $50 gift card for a popular local rib restaurant and two rounds of golf at a local course.

Peterson said those benefits will evolve continuously as WCPO studies Insider user data and behavior to heighten relevance, tools that are only in the early stages of internal development. “As we get to know people and what they’re interested in better, we’re going to be nimble and tweak the experience.”

TWO NEWSROOMS IN ONE

Another significant development from the Insider experience has been its effects on the broadcast newsroom. WCPO Digital is essentially a parallel unit inside the station with a parallel management structure, operating with a certain degree of independence from the station.

That said, Jeff Brogan, WCPO’s VP-GM, said the infusion of new journalists has elevated the overall operation. “You add roughly 30 journalists to your newsroom [and] you’re only going to benefit.”

Translating that new stream of digital content on air, however, has been a slower process to hack through. “It has been tougher than we imagined,” Brogan said. “It’s a challenge in that each platform is different; the audiences are different; the expectations are different.”

The process of collaboration has smoothed out over the last several months, and Brogan said most of the content gathered for Insider “is getting on television in some way, shape or form” each day.

In part, that’s stemming from more front-end collaboration — getting on-air and digital journalists to collaborate on certain stories, Peterson said. And it’s also coming from better training the digital staff.

This has also been helped by Brogan and Peterson’s long relationship; they worked together previously at Scripps’ West Palm Beach, Fla., station where Brogan was news director and Peterson director of new media. Peterson now attends all of the broadcast station’s daily department head meetings, and a daily morning meeting encompasses both broadcast and digital staffers.

Additionally, WCPO Digital staffers work on more of an enterprise calendar than their counterparts, allowing for more lead time in on-air story planning for their content.

Whether and how the infusion of new content moves the Nielsen needle has yet to be clear. “It’s too early to tell,” Brogan said. “If we have strong content on broadcast, our Nielsen ratings are going to go up. This is doing nothing but helping us.”

JOURNAL MERGER EFFECTS

With Scripps anticipating a broadcast footprint of 34 markets, up from 13 (pending approval of its merger with Journal), the implications of its WCPO experiment only widen.

Symson and his digital team are staying with the broadcast business when the companies split, and he and Boehne have signaled every indication that they’ll be staying the experimental course. The merger, Symson said, only amplifies the impact of WCPO’s nascent efforts around building up business-to-consumer relationships, bundles and use of consumer data.

“It gives us lots of options and more scale,” he said. “That’s an overarching theme of the transaction in general. We’re going to add a number of really desirable markets — some of America’s most digitally connected markets — and that just spells opportunity.”

This story originally appeared in TVNewsCheck’s Executive Outlook, a quarterly print publication devoted to the future of broadcasting. Subscribe here.