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Denver Post CEO Mac Tully on new paywall, taking over from Dean Singleton

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We recently spoke with Dean Singleton about his decision to retire as MediaNews Group chairman and Denver Post publisher next month. Regarding the latter, Singleton said, "It's Mac's newspaper now."

Mac is Post CEO Mac Tully, Singleton's successor as publisher -- and the man charged with overseeing a just-announced metered paywall that will end unfettered free online access to the paper. This week, we chatted with Tully about the paywall and succeeding Singleton. Here's what he had to say.

The paywall move is being made by all of the newspapers (including the Post) owned by Digital First Media, the company that encompasses MediaNews Group. According to the paper, non-subscribers will be able to view "25 articles on the desktop website or 99 articles on mobile devices" without charge. But if they want to see more, it'll cost them $11.99 per month for a digital-only subscription, or a new customer rate of $5.50 per week for a print-and-digital subscription, with other packages available.

Until recently, Digital First CEO John Paton had a reputation of being rigorously anti-paywall, and in a blog post about the new policy, he doesn't exactly sound like a true believer. He writes in part, "Let's be clear, paid digital subscriptions are not a long-term strategy. They don't transform anything; they tweak. At best, they are a short-term tactic. I have said that often enough in the past. But it's a tactic that will help us now."

As for Tully, former president and publisher of the San Jose Mercury News, who took over as Post CEO around five months ago, he sounds considerably less conflicted about the approach.

"This has been an evolving discussion for a couple of years," he says. "As you know, there have been a number of different newspapers and newspaper organizations that have gone this route prior to us that we've obviously been watching with interest. Then, about six months ago, we began to have more earnest discussions around this -- so it's not something that just crept up. In fact, it's a discussion the newspaper industry should have probably looked at a lot harder over a decade ago."

When paywalls were brought up back then as a way to staunch the red ink flowing from the newspaper industry, plenty of observers responded with the horse-is-out-of-the-barn analogy -- i.e., customers who've grown accustomed to getting their online content for free won't be happy if they're suddenly asked to pay for it. Tully doesn't dismiss this take out of hand.

"You can certainly argue both sides of it," he acknowledges, "and I think there are valid arguments on both sides. But it's exciting for us, because it's an opportunity to really recognize the fact that we have Pulitzer Prize-winning content that's valuable and unique. And charging your print audience for it while giving it away for free online is a flawed strategy in my opinion.

"I was out with an advertiser over five years ago," he continues, "and he made a comment that really resonated with me. He said, 'Mac, I know how valuable your print audience is, because they're willing to pay hundreds of dollars a year for something I can go online and get for free.' And that resonated, because we work so hard to create unique, valuable content that's valuable to readers, and yet we turn around and give it away online."

That's simplifying things, of course. The online content is supported by advertising -- but the rates for online ads are much lower than those for the physical newspaper. Paton's phrase for the phenomenon, repeated in his most recent post: "Print dollars are becoming digital dimes."

The paywall is intended to supplement those dimes. "We're going to create this content and produce it on the print side," Tully says, "but also on the web page and on our apps and all the different devices people access. And how people choose to access that information is really their choice, which is a really cool thing. They can choose the platform, they can choose where they consume it, and they can get all that for one price."

At the time of our conversation, Tully hadn't gotten a lot of external feedback about the paywall notion. But the reaction from employees has been mostly positive, he maintains.

Continue for more of our interview with Denver Post CEO Mac Tully. "We had an all-employee meeting Monday night to announce this," he points out. "We gave all our employees the opportunity to ask questions -- and there were a lot of questions. But for the most part, people were excited by the fact that we're going to value our content. Not everybody applauded, but I got a lot of applause when I said that we're going to have people say, 'I want that and I'm willing to pay for it.' People in the newsroom work really hard for that content, and for the most part, I think it's pained them that we were just giving it away."

Beyond philosophy is economics, and the Paton blog statement that "we need more gas in the tank if we are going to complete this journey of print-to-digital transformation" could be interpreted as implying that the newspapers won't be able to survive without a cash infusion of the sort a paywall may provide. That's not how Tully sees it, though.

"If we chose not to go this route, it wouldn't have meant the demise of the Post," he says. "But we think it's the right route to go at this point."

Other papers around the country are cutting back on the number of days when home delivery is offered -- and indeed, we recently got a call from a Post reader living in the metro area who said the paper's website wouldn't allow him to sign up for a seven-days-per-week print subscription.

Does that mean the Post may stop delivering on some weekdays -- perhaps Mondays and Tuesdays? Absolutely not, Tully says.

"That sounds like a glitch in the system," he says about the would-be subscriber's story. "We have a seven-day offer...and we're not in the frame to go less than seven days a week at this point. I can't say that will be the case forever, but this is a great newspaper, and I can't see eliminating days. The Post has won four Pulitzer Prizes in as many years, and that's a feat that's only been matched over that period by one other paper: the New York Times. With that kind of brand quality, I don't see messing around with that strategy."

Besides, the Post is going through more than enough changes right now, what with Singleton about to hand over the keys to the operation. Succeeding him will be "a challenge," Tully says. "He's an icon in the community and I totally respect him. He hired me a number of years ago [for the Mercury News job], and I've never met anyone more positive in my life in the face of so many challenges we've had as an industry, and the challenges he's had physically. But when you talk to Dean, he's smiling and very positive. The glass is always half full and the sky's always blue. He's left very big shoes for me to fill."

Regarding Singleton's comment about the Post being Tully's newspaper now, "I don't see it that way," he says. "This is the community's newspaper, and it's [editor] Greg Moore's newspaper. He's been at the helm of a paper that's won all these Putlizers, and I want to let Greg do what he does on the news side. I don't want to mess around with that. My focus is on the challenges and opportunities we face on the business side."

And that includes making a paywall work.

Send your story tips to the author, Michael Roberts.

More from our Media archive: "Dean Singleton on retiring as MediaNews Group chair, print's decline and the future."

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