USA Today unveils page-turning digital revamp
By Ryan Nakashima, AP Business Writer
USA Today, the nation’s second-largest newspaper, is unveiling an overhaul of its printed and digital editions for the second time in less than two years.
USA Today’s print version will introduce a redesign on Friday. It changes the logo for the first time in its 30-year history and nearly doubles the number of pages that use color. Editors will also use color more often to do things such as highlight text in key portions of stories.
The newspaper, the first major daily to use color when it launched in 1982, will also feature more graphics and photos. The newspaper’s front page and section fronts will sport a “ball” icon that will contain a different graphic or photo each day to reflect noteworthy news.
Meanwhile, Gannett Co.’s flagship national daily is changing the look and feel of its website and mobile apps. Readers will have to click or finger through pages as if they’re perusing a digital magazine.
The page-turning model allows USA Today to sell full-page interactive ads that support video. They will appear between news pages. On mobile devices, readers will flip through pages with a finger swipe, while on the Web, users will navigate back and forth by clicking on right or left arrows.
But even as it makes changes, USA Today is resisting charging for access, even though such an online pay wall has helped other newspapers including some at Gannett boost circulation revenue.
The move, says management, is strategic.
The newspaper’s decision is one of the first tests of Larry Kramer’s management. The 62-year-old founder of financial news service MarketWatch was named president and publisher in May.
His appointment comes as hundreds of newspapers nationwide have already converted to a model that requires readers to pay for online or mobile access. Pay walls have helped increase circulation revenue. The New York Times Co., for instance, launched one in March 2011. By the end of June, it had 532,000 digital subscribers companywide, which helped boost quarterly circulation revenue by 8 percent from a year earlier.
Kramer defends the decision to keep USA Today’s digital content free-of-charge. He says USA Today differs from Gannett’s 80 regional newspapers, which began putting up so-called “metered” pay walls this year. Those newspapers are starting to require readers to pay for online access after reading a certain number of stories on the Web for free.
“Their news is essential in a different way,” Kramer said ahead of the redesign’s launch on Thursday. “We’re trying to introduce new forms of consumption of news, and we have to give it to people for free to get them to try.”
The move is also an acknowledgement of USA Today’s unusual business model. More than half of its 1.7 million paid copies each day are subsidized by hotels and given to guests for free in rooms or lobbies. Readers may be less accustomed to paying for it than, say, The Wall Street Journal.
USA Today hasn’t sold many digital copies partly because it hasn’t put up a pay wall. In the six months through March, the latest period for which data is available, it sold an average of 35,000 digital copies a day in the form of digital replicas of the print edition and e-reader versions without ads, according to the Audit Bureau of Circulations. By contrast, the Times sold 437,000, although that included subscriptions to its website, which USA Today does not charge for.
One major advantage of the page-turning model: It gives advertisers free reign to come up with marketing messages that take up an entire page in digital form. An advertiser could, for instance, show video and offer a variety of links covering different aspects of its product. That would make them more like television and online video ads, which generate significantly higher revenue than standard website banner ads.
USA Today’s approach is a significant change from the cost-per-click business model found on most newspaper websites, where revenue is based on the tiny percentage of readers who actually click on ads.
“We were stuck with an ad ecosystem that is limited to little boxes on pages. I wanted to change that,” said David Payne, Gannett’s chief digital officer.
Payne said advertisers would appreciate having the blank canvas of an entire page to promote their products, rather than competing with the clutter of other ads and stories. “If we can serve up rich media … (the device) becomes just another television,” he said.
USA Today last revamped its printed edition and website in March 2011, when it expanded coverage of reader-friendly topics such as travel and lifestyle trends and designed content for smartphones and tablet computers.
Gannett is in the midst of its own revamp. CEO Gracia Martore, who took over from Craig Dubow last October, announced a three-year turnaround plan in February.
Analysts expect Gannett to increase revenue slightly this year to $5.24 billion, for the first gain since 2006. It is expected to boost net income to $531 million, for the first increase since 2010.
On Thursday, Gannett’s stock rose as much as 2.8 percent to hit a new 52-week high of $17.61, before giving back some of the gains and closing at $17.46.
Some analysts are hoping that Kramer would help revive the company’s most popular newspaper, even as print newspaper ad revenue declines industrywide. Advertising dollars are increasingly flowing to online outlets of news.
“USA Today is their flagship product. It has been under unmitigated pressure on the revenue side for three or four years now,” says Douglas Arthur, an analyst with Evercore Partners. “It needs a major re-launch and I’m hoping this re-launch has the legs that we’re expecting.”