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Thread: Indystar.com to charge $12 per month for online access starting September 1st.

  1. #51
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    Default Re: Indystar.com to charge $12 per month for online access starting September 1st.

    Quote Originally Posted by Tom White View Post
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    Which loyal customers are you talking about? If they are only alienating the people who were using the site for free, they aren't losing anything. Maybe I don't understand what you are saying.
    All of the online ad revenue comes from views/impressions, so cutting off a majority of their online customer base does affect the ad revenue. We're probably talking $1-$2 per 1k impressions, but that can add up quickly.

    In other words, there's no such thing as a free reader. I read the IndyStar daily, sometimes a few times a day and definitely a few stories a day, so I've probably earned the Star a few bucks.

    I'd consider myself a loyal reader, but I can't justify paying $12/month for the Star. I can afford it, but it's a ridiculous price, imo. Here's what I think will happen: This high subscription rate will eliminate 90-95% of the Star's online readers while marginally cannibaliizing some of their print sales. They'll eventually lower the price to draw in more readers but most of the new audience they'll be looking to draw in will be long gone.

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    Default Re: Indystar.com to charge $12 per month for online access starting September 1st.

    Quote Originally Posted by Strummer View Post
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    They're still allowing 20 free articles every 30 days. So we don't have to abandon the Star entirely. I'll just plan on rationing my Star visits.
    The Paywall is unenforceable when it comes to anyone who knows some computer networking and has a few email addresses handy....
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    Default Re: Indystar.com to charge $12 per month for online access starting September 1st.

    Quote Originally Posted by Eleazar View Post
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    If you look at the Star's monthly subscription it is about $20. Really very little of that is actually going towards the physical medium, most of it goes to the business men and women and the content creators.

    The truth is they probably can't go cheaper than $12 and stay in business as they are. It is much easier to charge less when you are only a service, and not the content creators like Netflix.
    This is probably what I disagree with most. Netflix has real costs; they have to license content since they don't own much, and it's costing well in excess of $1B/year. That content then expires and they're left with nothing. It's actually much better for them to create content because they then own it and have actual assets. This is why they're dipping their toes into content creation.

    As for the Star and its ridiculous price: The New York Times spends $250M/yr in raw materials and circulates about 600M newspapers/year. If that translates to the Star, that's about $12.50 in monthly raw material costs for monthly print subscribers. That leaves less than $7.50 of profit to the Star before other operating costs, salaries, and other overhead.

    This digital edition? There are little-to-no raw materials costs, fewer operating costs, and the way I look at it, little-to-no overhead since most staff is already employed for the print edition. That means $12/month has a much, much, much higher profit margin. Unless I'm missing something, it's almost pure profit.

    Record labels can't go much cheaper than $40 for a digital album and stay in business as they are, but that doesn't justify a $40 album price, at all. The Star has to know the digital revenue earned from digital subscriptions will come nowhere close to compensating for the loss of physical print revenue, even with the much higher profit margins. There is no justification whatsoever for this high price. This is the Indianaplis Star, not a newspaper with hundreds of Pulitzer Prizes, top of the country journalists, and groundbreaking stories centered in the biggest city in the United States.
    Last edited by imawhat; 08-16-2012 at 10:21 AM.

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    Default Re: Indystar.com to charge $12 per month for online access starting September 1st.

    Quote Originally Posted by OlBlu View Post
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    If they are losing that much money, they should fire Kravitz and a couple of other so-called reporters...... ...
    No kidding. Kravitz and Tully's careers are done. The few who read that mess of a paper will fall off now. The Indy star closes doors in 3 years. It was never worth reading when free.

  6. #55

    Default Re: Indystar.com to charge $12 per month for online access starting September 1st.

    Quote Originally Posted by imawhat View Post
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    I'd consider myself a loyal reader, but I can't justify paying $12/month for the Star. I can afford it, but it's a ridiculous price, imo. Here's what I think will happen: This high subscription rate will eliminate 90-95% of the Star's online readers while marginally cannibaliizing some of their print sales. They'll eventually lower the price to draw in more readers but most of the new audience they'll be looking to draw in will be long gone.
    I am a loyal reader of predominantly the Sunday addition. If they are completely eradicating print subscriptions, then they will lose more than just a marginal number of their print subscribers. I enjoy reading a paper copy of the Star after spending most of my weekdays and weeknights on a computer. I rarely use the website. Most folks over 55 probably rarely want to go digital. Lose-lose situation for everyone as the deal is currently written, if I understand it correctly.

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    Default Re: Indystar.com to charge $12 per month for online access starting September 1st.

    Well I hit my 20 article limit earlier today. Decided I wasn't going to pay a dime for it. So, I surely thought that the Star wouldn't be stupid enough to allow you to simply clear your cache, cookies, and history out and get back in. I was wrong. I did exactly that, and went back to the site, my 20 article limit had been reset.

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  10. #57

    Default Re: Indystar.com to charge $12 per month for online access starting September 1st.

    Oh theres a 20 article limit I am totally good then. All I ever do is read the sports section.

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    Default Re: Indystar.com to charge $12 per month for online access starting September 1st.

    Quote Originally Posted by travmil View Post
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    Well I hit my 20 article limit earlier today. Decided I wasn't going to pay a dime for it. So, I surely thought that the Star wouldn't be stupid enough to allow you to simply clear your cache, cookies, and history out and get back in. I was wrong. I did exactly that, and went back to the site, my 20 article limit had been reset.
    Sssh, don't tell em that! You know Kravitz surfs here to write his Pacer-related articles!
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    Default Re: Indystar.com to charge $12 per month for online access starting September 1st.

    This is so insane it sounds like a joke. It's not even a good version of a local paper, and the other states local papers are free. If the charge was $12 a year it might be reasonable, but at $12 a month they might as well just turn off their website entirely.
    Removed link to my website after a PM from Able.

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    Default Re: Indystar.com to charge $12 per month for online access starting September 1st.

    Quote Originally Posted by imawhat View Post
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    This digital edition? There are little-to-no raw materials costs, fewer operating costs, and the way I look at it, little-to-no overhead since most staff is already employed for the print edition. That means $12/month has a much, much, much higher profit margin. Unless I'm missing something, it's almost pure profit.
    You ARE missing something. Classified ads were the number 1 revenue source for print newspapers for decades, and that revenue stream has been devastated by craigslist and other internet sites. Print subscriptions have dropped dramatically as well, so the print edition is probably now just breaking even or maybe even operating at a loss.

    So the online edition really can't be considered "pure profit" when the print edition isn't even making money anymore. The online edition now has to bring in more revenue than it did before.

    Finally, unlike companies like Netflix and Hulu etc, newspapers have a large (though shrinking) staff of actual journalists, writers, editorial staff etc. that create the actual content. Labor costs as related to revenue are probably much higher at Indystar than to companies like Netflix.

    ------

    Having said all that... the IndyStar is not a great paper to begin with, and their online Pacers coverage has been downright terrible for years now (not blaming Wells or Kravitz, the Indystar just hasn't resourced it well and they've made numerous bad editorial decisions).

    $12 a month is kind of a joke really. It might work for a bigger-city paper with more content to offer - for example if that $12 got you access to ALL of the Gannett sites, then I could see it. But for IndyStar? Are you freaking kidding me? This is going to fail, and fail miserably... they need to lower the price to about $5 and dramatically increase the quality of the content.

    The SF Chronicle is not a very good paper considering the size of the Bay Area, and I wouldn't pay $12 for it either, but it blows away the IndyStar... jmho

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    Default Re: Indystar.com to charge $12 per month for online access starting September 1st.

    Quote Originally Posted by imawhat View Post
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    This is probably what I disagree with most. Netflix has real costs; they have to license content since they don't own much, and it's costing well in excess of $1B/year. That content then expires and they're left with nothing. It's actually much better for them to create content because they then own it and have actual assets. This is why they're dipping their toes into content creation.

    As for the Star and its ridiculous price: The New York Times spends $250M/yr in raw materials and circulates about 600M newspapers/year. If that translates to the Star, that's about $12.50 in monthly raw material costs for monthly print subscribers. That leaves less than $7.50 of profit to the Star before other operating costs, salaries, and other overhead.

    This digital edition? There are little-to-no raw materials costs, fewer operating costs, and the way I look at it, little-to-no overhead since most staff is already employed for the print edition. That means $12/month has a much, much, much higher profit margin. Unless I'm missing something, it's almost pure profit.

    Record labels can't go much cheaper than $40 for a digital album and stay in business as they are, but that doesn't justify a $40 album price, at all. The Star has to know the digital revenue earned from digital subscriptions will come nowhere close to compensating for the loss of physical print revenue, even with the much higher profit margins. There is no justification whatsoever for this high price. This is the Indianaplis Star, not a newspaper with hundreds of Pulitzer Prizes, top of the country journalists, and groundbreaking stories centered in the biggest city in the United States.
    I don't think you quite understand the costs involved in the creation of content. Yes, with all of the shows and movies Netflix has streaming the licensing fees can get quite expensive when combined. When separated though those fees are nothing to a full production. What Netflix is doing with the production side is trying to attract more people to their service so that they can hopefully expand their offerings. This also means the cost to subscribe will most likely increase. Just look at a service such as HBO. It charges more than Netflix even though it has far fewer offerings because the cost to create that is far more than the cost to license 100 TV shows.

    While the cost to keep servers up and running is not as much as creating something physical, it is also not as cheap as you think.

    You also then need to realize, while the staff is on staff for the print edition. The amount of sales of the print edition is much lower than it was 5 or 10 years ago. So while their overhead costs are probably staying the same or even increasing, the amount of money they bring in through print is decreasing. It is probably to the point now that the print cannot sustain the Star on its own, even with online advertising helping to subsidize it. So yes the online version is sharing those overhead costs.

    It is certainly possible the $12 is at a higher profit margin, but it most likely is probably rather small.

    Yes, it is the Indy Star, and they don't operate on the scale of the NY Times, which is a national newspaper. So even though they have a smaller staff, they most likely also have a higher operating cost per subscriber than the New York times.


    I'm not trying to argue that it is worth your money to subscribe to the Indy Star online. I am just trying to educate this board on the actual costs of something such as this. People see it is on the internet and just assume things should be cheaper than they need to be for the site to stay in business. The only reason why Netflix can charge what they do for streaming is because their streaming selection is not very good. They have a lot of TV shows, but their movies tend to be smaller less known movies and older movies. Yeah they do have a few blockbusters, but not very many. I mean just look at what people in this thread are suggesting. No online newspaper the size of the Star could survive on $12 a year subscription, or even $5 a month. The lack of understanding really isn't anyone's fault on here. I doubt the majority of people on here are even involved in these kinds of industries (not necessarily newspaper, but digital content) as I am. The people who are to blame for the lack are those who provide the content, but don't inform the people paying, or might be interested in paying, how much it actually costs them to run the business. What the IndyStar offers probably isn't worth $12, but I also doubt they can charge much less as they are currently structured. If the Star wants to stay in business they are going to have to make some drastic changes to their business structure.

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    Default Re: Indystar.com to charge $12 per month for online access starting September 1st.

    Can we put a $12 a month paywall in here just for Kravitz?

    "Sorry Bob, you hit your 20 thread a month limit, you'll have to go dredge at another site for the rest of the month...."
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    Default Re: Indystar.com to charge $12 per month for online access starting September 1st.

    Quote Originally Posted by travmil View Post
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    Well I hit my 20 article limit earlier today. Decided I wasn't going to pay a dime for it. So, I surely thought that the Star wouldn't be stupid enough to allow you to simply clear your cache, cookies, and history out and get back in. I was wrong. I did exactly that, and went back to the site, my 20 article limit had been reset.

    I wish I could thank you a thousand times for this. I tried it, and it worked for me too. I never would have thought of that.

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    Default Re: Indystar.com to charge $12 per month for online access starting September 1st.

    Quote Originally Posted by rabidpacersfan View Post
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    You ARE missing something. Classified ads were the number 1 revenue source for print newspapers for decades, and that revenue stream has been devastated by craigslist and other internet sites. Print subscriptions have dropped dramatically as well, so the print edition is probably now just breaking even or maybe even operating at a loss.

    So the online edition really can't be considered "pure profit" when the print edition isn't even making money anymore. The online edition now has to bring in more revenue than it did before.
    What you're saying is that revenue/profit from the digital edition has to support all of Indystar because the print edition is operating at a loss. #1-I agree, and #2-the digital edition is still pure profit; the success/failure of the print edition has no bearing on the digital business model.

    Quote Originally Posted by rpf
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    Finally, unlike companies like Netflix and Hulu etc, newspapers have a large (though shrinking) staff of actual journalists, writers, editorial staff etc. that create the actual content. Labor costs as related to revenue are probably much higher at Indystar than to companies like Netflix.
    My friend's pool business has higher labor costs to revenue than both companies. That stat doesn't tell me what you want it to tell me.

    Pound for pound, Netflix's labor costs are much, much higher than Gannett's. The average manager at Netflix makes 2 1/2 times more than a manager at Gannett; Directors make twice as much, and Vice Presidents make almost twice as much. Netflix has a reputation for paying at the top of their industry.

    The average "actual journalist" salary at Gannett is $38k/year, which ranks close to the bottom 1/3rd of all Gannett salaries. Given their number of employees, wages is not a majority contributor to their overhead expenses.

    And retail advertising is/has been the #1 revenue source for newspaper ad revenue, but I understand that wasn't your pont.
    Last edited by imawhat; 09-09-2012 at 01:44 AM.

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    Default Re: Indystar.com to charge $12 per month for online access starting September 1st.

    Quote Originally Posted by Eleazar View Post
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    I don't think you quite understand the costs involved in the creation of content. Yes, with all of the shows and movies Netflix has streaming the licensing fees can get quite expensive when combined. When separated though those fees are nothing to a full production. What Netflix is doing with the production side is trying to attract more people to their service so that they can hopefully expand their offerings. This also means the cost to subscribe will most likely increase. Just look at a service such as HBO. It charges more than Netflix even though it has far fewer offerings because the cost to create that is far more than the cost to license 100 TV shows.
    No, HBO charges more because consumers are used to paying for more. Warner Communications was doing fine on its own; it merged with Time Inc. partly because HBO was going to be a freaking cash cow. Also, HBO has to split subscriber revenue (maybe 40-60% of the $20/month) with other cable providers like Comcast, Cox, etc., whereas Netflix gets 100% of subscriber revenue.

    You're not paying 2 1/2 times more for HBO because content costs for HBO are 2 1/2 times as much as Netflix.

    Quote Originally Posted by Eleazar
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    While the cost to keep servers up and running is not as much as creating something physical, it is also not as cheap as you think.
    I'm not sure how this affects HBO itself, Netflix or Gannett since a majority of the costs associated with the usage of their servers are fronted by mobile/cable providers. If you're referring to the sites for the respective companies themselves, along with storage, then Netflix's costs are the highest amongst the three.

    Quote Originally Posted by Eleazar
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    You also then need to realize, while the staff is on staff for the print edition. The amount of sales of the print edition is much lower than it was 5 or 10 years ago. So while their overhead costs are probably staying the same or even increasing, the amount of money they bring in through print is decreasing. It is probably to the point now that the print cannot sustain the Star on its own, even with online advertising helping to subsidize it. So yes the online version is sharing those overhead costs.
    IndyStar.com has been around for years, and its writers mainly write for the print edition. So no, outside of maybe a few new positions, this new business model has few additional overhead costs. I'm sure ChicagoJ or someone in his position can semantically disagree with that.

    Quote Originally Posted by Eleazar
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    It is certainly possible the $12 is at a higher profit margin, but it most likely is probably rather small.
    See above.

    Quote Originally Posted by Eleazar
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    The only reason why Netflix can charge what they do for streaming is because their streaming selection is not very good.
    I would say the opposite; the selection is good enough that they can charge $7.99/month. Outside of HBO and a few other partners, they have a very good selection that includes several of the best television series ever created, and up until the expiration of the Starz deal, they had a lot of mainstream full-length feature content. And if you read/believe Netflix, the share of views coming from those mainstream releases was relatively small compared to their higher level content, and that's why they didn't renew with Starz.

    But I think I understand what you're saying. The cost of licensing more mainstream content would make it impossible for Netflix to charge $7.99 and still make a profit.

    Quote Originally Posted by Eleazar
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    The lack of understanding really isn't anyone's fault on here. I doubt the majority of people on here are even involved in these kinds of industries (not necessarily newspaper, but digital content) as I am.
    Heh! You'd be surprised if you knew what some of your boardmates did for a living. Maybe not.

    Quote Originally Posted by Eleazar
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    The people who are to blame for the lack are those who provide the content, but don't inform the people paying, or might be interested in paying, how much it actually costs them to run the business. What the IndyStar offers probably isn't worth $12, but I also doubt they can charge much less as they are currently structured. If the Star wants to stay in business they are going to have to make some drastic changes to their business structure.
    The key is your last sentence. It's a buggy whip business. Or maybe a better example of the future of IndyStar is what happened to the vinyl record industry. Vinyl (paid-subscription newspapers as a whole) was replaced by a more convenient medium (free content on the internet) and a lot of companies/jobs in the process. However, there are a few individual companies that still make vinyl records for the much smaller (than it used to be 25 years ago) contingent of consumers that prefer to listen to higher quality artists (New York Times) on vinyl (paid-subscription).

    I think what's happening to IndyStar is unavoidable, but I think they're expediting their decline. They probably can't afford to charge less than $50/month, but that's not how pricing works. You have a few sustainable options as a business: #1-you charge the value of your service (Netflix), #2-you charge less than the value of your service as a loss leader (Amazon.com), or #3-you charge much more than the value of your service because you can get away with it (Apple).
    Last edited by imawhat; 09-09-2012 at 01:38 AM.

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    Default Re: Indystar.com to charge $12 per month for online access starting September 1st.

    Firefox users, all you have to do is turn on private browsing whenever you want to visit Indystar.com, it will reset your article count. So you don't have to lose all your browser history and cookies from useful sites.

    Pretty freaking hilarious that the entire premise of their business model can be worked around with a setting in your browser. Thats and epic fail on their part.
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    Default Re: Indystar.com to charge $12 per month for online access starting September 1st.

    Quote Originally Posted by graphic-er View Post
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    Firefox users, all you have to do is turn on private browsing whenever you want to visit Indystar.com, it will reset your article count. So you don't have to lose all your browser history and cookies from useful sites.

    Pretty freaking hilarious that the entire premise of their business model can be worked around with a setting in your browser. Thats and epic fail on their part.
    Sadly, their epic fail will probably work on the majority of web users.

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    Default Re: Indystar.com to charge $12 per month for online access starting September 1st.

    If the Indy Star want to make their online business model work, they should invest more in articles that have a national appeal instead of just reposting whatever AP article is available. That and they need to fix their advertisements on the website. They are terrible sometimes. They make it hard to navigate without having popups all the time. In fact, serving up that content has to be a considerable drain on their servers even if it's just the scripts and not the content. You can tell because any time there is a national story in Indy where the Drudge Report or MSN links to the Star, the site takes FOREEEEEEEEVER.

    Clean up the ads and make it relevant to a wider audience... you can just go ahead and name me CEO now.

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    Default Re: Indystar.com to charge $12 per month for online access starting September 1st.

    Chicken and Egg really. Did lost revenues create weaker content or did weaker content kill revenues? I'm not sure, but the content is a lot worse than it was 20 years ago. It's bordering on Huffington Post AP compile rather than good local news. I do think they've tried to do more local LIFESTYLE articles in recent years, but local NEWS? They haven't been supporting that well for years. I can't imagine they have many quality journalists being given any quality time to do long research stories that really impact the community.

    And having just rewatched The Wire I'm even more hyper-aware of these issues. So do I financially support a poor product in hopes that it rebounds and returns to filling a community need or do I avoid sending my implicit approval for the current content levels?

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    Default Re: Indystar.com to charge $12 per month for online access starting September 1st.

    It's sad that newspapers are quickly becoming a thing of the past but I think they are. I enjoy reading a newspaper but I also run a business that used to advertise in newspapers and doesn't any longer. I can run an ad in the newspaper for employment for a specialized position and get perhaps 2-3 applicants for $500 in 1 week. With Monster.com com I can get several hundred applicants and have multiple adds for 1 year for the same cost. With Craigslist I can get several dozen applicants for no cost. We ran a weekly full page newspaper ad for several years up until the paper went under at a cost of about $1200 weekly. I could have changed to the sole remaining local paper but went to a web based and direct mail program for about 25% of the cost. I'd say the results are 10 times as effective as the newspaper ad. I really don't know if there's a solution for newspapers to compete. Charging for Internet access may be a good idea but only if the cost are in line with the product which I'd say this isn't.

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    Default Re: Indystar.com to charge $12 per month for online access starting September 1st.

    Quote Originally Posted by graphic-er View Post
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    Firefox users, all you have to do is turn on private browsing whenever you want to visit Indystar.com, it will reset your article count. So you don't have to lose all your browser history and cookies from useful sites.

    Pretty freaking hilarious that the entire premise of their business model can be worked around with a setting in your browser. Thats and epic fail on their part.
    Like I said weeks ago, the paywall is unenforceable to anyone who knows what they are doing.
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  31. #72
    Member idioteque's Avatar
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    Default Re: Indystar.com to charge $12 per month for online access starting September 1st.

    In 2012, how can Gannett have such **** poor websites for their papers? Gannett is basically the Wal Mart of newspapers, I wish the Star was locally owned.

  32. #73
    Wasting Light Hicks's Avatar
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    Default Re: Indystar.com to charge $12 per month for online access starting September 1st.

    It seems like the only way they could enforce this is to require all readers to login and to have their servers do the counting instead of the users computers. And even then they might just register multiple accounts.

  33. #74
    Jimmy did what Jimmy did Bball's Avatar
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    Default Re: Indystar.com to charge $12 per month for online access starting September 1st.

    I've noticed the limit is across the board with Gannett newspapers. At least the ones I've been to so far. It's not 20 articles per month on the Indystar site alone... If you are down to 1 article left at the Star and you happen to click a news story on some other Gannett news website, then you're limit will have been reached for that site you've never been to AND for the Star.

    Also, correct me if I'm wrong (and maybe this has already been mentioned) but I don't think Gannett blogs count against your limit.
    Nuntius was right. I was wrong. Frank Vogel has retained his job.

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  34. #75

    Default Re: Indystar.com to charge $12 per month for online access starting September 1st.

    Quote Originally Posted by graphic-er View Post
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    Firefox users, all you have to do is turn on private browsing whenever you want to visit Indystar.com, it will reset your article count. So you don't have to lose all your browser history and cookies from useful sites.

    Pretty freaking hilarious that the entire premise of their business model can be worked around with a setting in your browser. Thats and epic fail on their part.
    And this is why I struggle to muster much sympathy for the newspaper business as a failing industry. It has been clear for a decade that print media needs a fundamental restructuring. Instead, they've been content to do exactly what the NUVO article described - loot whatever remaining silver they can find. If that is Gannett's answer to the very real and legitimate problems facing the industry, they deserve to fail. That isn't to say I hope they fail. I recognize an informed citizenry is critical to a healthy democracy and I shudder to think what will happen in the absence of any trusted, reliable news source (although I hesitate to even use those words in describing Indy Star in its current incarnation). It's evident the Star has been dying a slow, painful death for some time now, but this latest development could be a stake through the heart.

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