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USA Today publisher sees hope in mobile platforms

USA Today's new publisher said yesterday he hopes to expand the newspaper's revenue from mobile phones and portable electronic reading devices, and pledged to fight The Wall Street Journal's bid for readers in hotels.

The comments from David Hunke, named USA Today's publisher in April by Gannett Co., come as the top US newspaper by circulation - along with the rest of the media industry - is grappling with steep advertising declines. Newspapers are struggling to find ways to get readers to pay for online content without killing the flow of traffic to their Web sites and devastating their Internet ad revenue.

As one step toward expanding its revenue sources, on Aug. 3 USA Today will start selling e-mailed replicas of its daily newspapers for about US$10 a month, Hunke said at a gathering of reporters. USA Today already has been selling electronic editions for US$13.95 a month, but now it is switching to a new technology provider and putting more resources into promoting the service.

Other newspapers, including the San Francisco Chronicle, have similar products, which are not big producers of revenue. USA Today's previous incarnation of its electronic edition averaged 1,217 subscribers from October through March, the latest reporting period covered by the Audit Bureau of Circulations.

Hunke said it was not yet clear whether print subscribers would get the new electronic version included in their delivery service or whether they would be asked to pay the extra fee, which is the case now.

Hunke said he does not envision charging for access to the newspaper's main Web site, a step other publishers are contemplating. He added that USA Today was not represented at a recent meeting in Chicago where several newspaper executives discussed the idea.

But Hunke said mobile platforms, like Apple Inc.'s iPhone or digital reader devices being developed by Inc., Plastic Logic and other companies, will offer ways for newspapers to charge for news. In fact, Hunke said he regrets that USA Today didn't start by charging for the newspaper's iPhone application, which is free to download.

"I'm not sure we realized what we had," he said. "I think that's a value readers will be willing to pay for."

Hunke, who was previously publisher of the Detroit Free Press, which is also owned by Gannett, said USA Today will not follow the strategy pursued by the Free Press and The Detroit News, which cut home delivery to three days per week to reduce costs.

"Our readers are constantly moving," he said, referring to the travelers USA Today has long targeted.

On that front, USA Today is facing a tougher challenge from The Wall Street Journal. This month the Journal won a contract from Hyatt Hotels & Resorts to provide newspapers for free distribution to some guests.

Hunke said USA Today will be competing more aggressively in hotels but offered few details on the newspaper's strategy for holding on to the market, which accounts for nearly half of USA Today's circulation. The Journal is "very serious competition for us," he said.

Robert Christie, a spokesman for the Journal's parent company, Dow Jones & Co., declined to comment on Hunke's remarks.

USA Today's circulation fell more than 7 percent to 2.11 million for the October-March period, while the Journal's edged up slightly to 2.08 million, according to the Audit Bureau of Circulations.

USA Today saw a 36 percent drop in advertising pages in the first quarter. And Gannett overall has been cutting expenses with layoffs and unpaid furloughs. Hunke would not rule out further job cuts in the second half of the year if revenue continues to deteriorate.


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