The Morning News is "Very Satisfied" with Year One of the Paywall. How 'Bout You?

Yesterday was First-Quarter Earnings Day for Dallas Morning News parent A.H. Belo, or as we call it in the newspaper business, So How Many of Us Are Getting Whacked on Christmas Day? Day.

The news was pretty predictable: Total first-quarter revenue was $105 million, down 7 percent over last year. Advertising revenue, both print and digital, was down 12 percent. Even digital-ad revenue was down 11 percent, to $7.8 million.

"All in all," CEO Robert Decherd told investors in yesterday's conference call, "the first quarter was a good one."

What's a bad one? We didn't have the heart to ask.

But of course: For the Morning News and its beleaguered parent, ad revenue is only part of the game, and a shrinking one at that. It's all about "creating proprietary local content and reducing our dependince on ad revenues," Decherd told investors. Translation: #PAYWALLMOFOS.

After wading through the bloody streams of traditional revenue, Decherd quickly turned yesterday's call over to News publisher Jim Moroney, who used the occasion to recap the first year of the paper's "subscriber content" experiment, better known as the "paywall," which was erected last March.

"We simply couldn't afford to give away for free what our best customers were paying $400 a year to have," Moroney said.

About 50,000 people purchased digital-only subscriptions in the paywall's first year, Moroney said, at either $9.85 for one-device access or $16.95 for all-access. That's about $8 million in revenue, if you figure half the subscribers bought one package and half the other. (See bone-headed correction below.)

But that paywall, of course, caused a drop in traffic to the paper's web site: from 39 million pageviews a month in the year ending March 31, 2011, to 30 million in the paywall's first year. (The Observer, for comparison's sake, did 4.3 million pageviews in March.)

That drop in clicks obviously cost the paper some ad revenue. But Moroney said the number of lost ad impressions -- that's the number of times an individual ad loads on the site -- was about equal to the number "remnant" impressions the paper sells, which are ads sold in bulk (and deeply discounted) when the site doesn't have enough full-priced advertising to support its traffic.

"We've accomplished a lot," Moroney said, summing up the first year. "We have a lot more to do."

He outlined several objectives from 2012, including a complete overhaul of; a new and improved; a new tablet product; neighborhood-focused web sites to accompany community papers; and the development of niche mobile apps and even e-books, all of which damn well better be narrated by their new Digital Managing Editor/Omniblogger.

The News is also trying to make it easier for people to align their print subscriptions with their digital ones, Moroney said, and it will spend $4 million on marketing the digital subscriptions this year.

And -- you'll just love this part -- after raising its seven-day, new-subscriber home delivery rate to $37 a month in October, the News is already conducting another "price elasticity" study, to measure just how elastic that wallet of yours is. We're guessing not very.

An earlier version of this story completely blew the math on digital subscriptions. I'm not sure what's worse: That I blew the math or that I didn't realize immediately how paltry my original figure was. Although given the state of things, nothing would surprise me. Anyway, sorry for any confusion. I hope no journalists jumped off the Calatrava as a result of this error.

Here's Moroney's presentation:

The Morning New' Subscriber Content Strategy