How PRWeb Converted From a Free to a Paid Model

Newspaper (and magazine) industry people often complain that they cannot charge for their content online, blaming the "culture of free," as well as other unfriendly characteristics of the Internet. Most of the time, I agree with them -- that Pay Train left the station a long time ago, and the news media simply did not climb aboard it in time.

But, at a time when many newspaper execs are re-examining their options to monetize their content, they could do worse than considering the case of a little startup that appears to have done what conventional wisdom holds is impossible.

PRWeb, which launched back to 1997, gave away its content until it was acquired by Vocus in 2006. The new ownership instituted a tiered fee structure (from $80 per press release to $320 for premium services). I learned about the company from Frank Strong, who said he had decided to contact me after reading my July 4th post, The Bleeding Edge of Media Business Models.

Strong, who is an executive at Vocus, described what happened as PRWeb transitioned from free to a paid model.

"Having braced itself for a massive public outcry of protest, that's when PRWeb discovered something interesting: The firm discovered just a small handful of people objected. Most customers were willing to pay and in fact seemed to embrace the new fee structures."

PRWeb now has 300,000 member registrants and more than 450,000 press releases on its service â€" still small compared to the big guys, PR Newswire and Business Wire, but impressive nonetheless. The site attracts around 2 million visitors per month, and has a quarter million RSS subscribers.

Strong adds that the company "was the first to pioneer the "direct-to-consumer" news release â€" this may seem like marketing speak but is actually pretty important to the business model because of its ability to index with major search engines and incorporate multimedia. Small businesses were able to get better page rankings in search and drive consumer traffic to their sites."

So, what can newspapers learn from this story? PRWeb serves small businesses with an easy, affordable fee structure. It is extremely Web-savvy and DIY-friendly.

Most newspapers, by contrast, simply target everybody, which ends up meaning nobody, really. But local newspapers could become much more valuable resources for the small businesses in their communities if they focused their resources on deeper coverage of the communities, leaving most state, national, and international reporting to others.

Much of this local coverage could be marshaled via hyperlocal technologies, such as EveryBlock.com's, which as we noted yesterday, now has opened its source code to all comers. If I were inside a metro daily, I'd be directing my development team to implement hyperlocal aggregation immediately. I want all the crime reports, traffic reports, real estate records, restaurant reviews, as well as geocoded blog entries, Flickr photos, Yelp reviews, Facebook and Twitter posts, and I want to make a lot of noise in my community about this new capability.

Once you've developed enough utility inside your product (you can still call it a newspaper if you wish), you can establish premium features priced to be affordable to small businesses, including advertisers, who are interested in growing their own presence online and attracting new consumers from their immediate vicinity. The transition to a paid model, maybe one not all that different from the old home delivery subscription, should follow quite easily.

Do I expect this to actually happen?

C'mon, dreamer. These are newspaper companies we are talking about. But just in case a single solitary newspaper executive can envision such a future, (s)he might want to do a quick study of little PRWeb, the startup that did.