Gatehouse Hoodwinks Its Subscribers

A news publisher under financial pressure resorts to a scam to get its subscribers to pay more

Gatehouse Hoodwinks Its Subscribers

Like a lot of people, I’ve been more willing to pay for news subscriptions ever since 2015 or 2016. The exploitation of social media and other free information outlets, the obvious and crying need for more journalists, and the hot messes of Brexit and Trumpism have led to a resurgence in newspaper subscriptions, and I’ve been among those trying to support local and national journalism by paying for it.

One local paper I’ve subscribed to is the Worcester Telegram & Gazette. A good paper with solid reporting of local events, excellent coverage of high school sports, and plenty of interesting little tidbits — not to mention a nice comics page — the paper has been a welcome addition most mornings. Yet, as for most local papers, circulation has been falling dramatically, from more than 100,000 on weekdays in 1999 to ~74,000 in 2012 to a reported 22,400 in 2018.

Once owned by the New York Times Co., the Telegram & Gazette is now owned by Gatehouse Media. The Boston metro area is Gatehouse’s largest market, where it owns more than 100 titles, about 20% of its news titles. It also owns the newspaper for the town where I live, which we stopped subscribing to after they downsized the paper and combined content from neighboring towns to such an extent that we could no longer consider it our local paper.

Gatehouse itself went into bankruptcy protection in 2013. Things are not going well for them again, it appears, as they’ve recently announced additional layoffs across 60 publications due to poor earnings.

With all this as background — much of it typical for the troubled state of journalism generally — here’s where the story gets weird.

Yesterday, I received a renewal notice for the Telegram & Gazette. We typically buy 13 weeks at a time, for $39. That’s been our practice for a while. We last renewed on May 16, 2019, and noted on a calendar that we’d have the subscription until August 16th. Why did we note this? Because it seemed that our subscription periods were getting shorter for some unknown reason, beyond just the normal practice of publishers sending renewal notices earlier and earlier. We know how to ignore those. But this felt slippery in a new way — that’s the best way I have to describe the first inklings we had that something might be amiss.

On the renewal notice I received yesterday, my eye was drawn to the options for renewal, as well as the renewal date. Our usual option wasn’t for “13 weeks” but for “up to 13 weeks.” That seemed odd. How or why could it vary, and be “up to” a set of weeks? Were they predicting my death, like a fortune teller? Were they foreshadowing another bankruptcy? Were they thinking a wormhole would appear sometime before August?

The other odd thing was that the renewal date was May 17, 2019, one day after we’d renewed before.

I called the Telegram & Gazette. They confirmed that we’d paid online for a renewal on May 16, 2019.

But before I press on with the story, here’s a brief overview of how subscriptions generally work from a financial standpoint.

When you pay a subscription — let’s say, for easy math, $120 for a year — the publisher can earn $10/month because they are sending you regular issues of what you’ve purchased, whether in print or online. It’s customary to earn monthly, even for a daily or continuous publications. This is why “up to 13 weeks” seems odd. You either buy 13 weeks of daily papers, or you don’t — at least, that’s what I thought. Over those 13 weeks at $39, the Telegram & Gazette would typically be earning $3/week from me.

Turns out Gatehouse Media had a different idea of how to earn that $39.

When I was on the phone with customer service for the Telegram & Gazette on July 15, 2019, I was told that if I wanted to renew, my new renewal date would be May 17, 2019, almost two months prior to the date I was calling. I’d received papers up until around July 10, when delivery mysteriously stopped (I filed claims online and received no response or replacement papers).

I was told yesterday those issues between May 17th and July 10th were considered  “grace issues.” I asked why my payment for 13 weeks wasn’t giving me delivery of the paper until August 15th.

Here’s the kicker — Gatehouse Media, apparently by definitions only it knows and creates — now counts various “premium editions” packaged along with the normal paper against your subscription. That is, they claim they had delivered items in papers — which I really don’t recall seeing, except for maybe one about shelter dogs — which they counted against my subscription, in addition to each daily paper.

With this approach, they were able to turn $39 for 13 weeks of service into $39 for what amounted to no days of service. We renewed on May 16th, and after paying $39 once, I could pay again to “start” another “up to 13 weeks” on May 17th.

According to their math, I would have to pay another $39 to cover the papers I’d already received. Even then, I couldn’t be sure I wouldn’t have to pay again to cover some overlap they created later with their supposed “premium editions.”

I have no insight into how many “premium editions” they claim to have sent, what those supposedly cost me, and so forth.

The customer service person — and a sales person who called later — both told me that there had been fine print on the back of the subscription renewal I’d made in February, and the one in May, about this practice. We didn’t read the fine print, because we thought it was your typical fine print, like the stuff on the backs of tickets or the meaningless indemnifications we all ignore.

Here’s what the fine print says (notice how belabored it is, a sign of shame I believe):

The advertised price does not include the charges for any premium editions. Premium editions are published to provide additional information and value to our readers. You agree that you will be charged up to an additional $9 for each premium edition published and delivered to you during your subscription period, in addition to the cost of your subscription. The length of your subscription will be shortened by the publication of premium editions if those premium editions are delivered to you during your subscription. [You may elect to be billed separately for premium editions by contacting Customer Service at 800-922-8200.] Thus, unless you elect to be billed separately up to an additional $9 for each premium edition, you agree that the length of your subscription will be shortened in proportion to the value of the number of premium editions published and delivered to you during your subscription period. As an illustrative example, if you select a subscription of up to 12 weeks at a cost of $48.00, and two premium editions at $2.00 each are published and delivered to you during that subscription period, your subscription will be shortened by 1 week because the weekly cost of the subscription is $4.00 per week and the premium edition charges total $4.00. Depending upon the length of your subscription and the timing of the publication and delivery of premium editions, you will not be charged for any premium editions if none are published and delivered to you during your subscription. As such, in that case only, the length of your subscription will not be shortened. The timing of the publication and delivery of premium editions is variable. There will be no more than 2 premium editions published each month during the subscription term.

Despite not having read this bewildering-in-concept and self-dealing fine print, we had started to notice the shrinking window of subscription terms. Only after my fastidious spouse documented the dates — because she smelled a rat — did it become obvious to us.

We’d been duped.

This is the strangest approach to accelerating earned revenue for subscriptions I’ve ever seen. Usually, marketing staff just send an early renewal notice in hopes you’ll pay early. If you do, your subscription window extends, but doesn’t shorten. The publisher gets money in, and can stop sending renewal notices, but that’s where the benefit of early renewal pretty much ends.

What the Gatehouse Media is doing seems ethically questionable, and it’s certainly exploitative. They hold all the cards, and leave their subscribers holding the bag.

[Update since sending this initially: Gatehouse Media was forced to pay $2.3 million in a class action suit over this same practice in 2017 when residents along the North Shore in Boston sued, claiming the practice was deceptive. Thanks for sending that along.]

This is indicative of broader set of problems emerging around the subscription model, which I firmly believe is and can be superior to other revenue models if managed well. Aside from what Gatehouse Media appears to be doing by hoodwinking subscribers into diminishing subscription windows, there are growing concerns that subscriptions will never be the same after the emergence of the surveillance economy, with a writer for Forbes noting:

In today’s Web, paying a monetary subscription fee only frees users from the visible artifacts of the surveillance Web, it does not in any way free them from the mass harvesting, manipulation, mining, and monetization of their personal information.

In short, paying for a service today simply hides the ads, it doesn’t stop you from being “the product.”

(Before you click on the link to the Forbes story, however, be forewarned that Forbes will inundate your browser with ads, popups, tracking, and videos. They provide a perfect example of the problem their writer outlines.)

The information space continues to suffer from all sorts of ills. Private equity firms loading up media companies with debt and then washing it away via bankruptcy while continuing to squeeze every last red cent out of established brands? Check. Surveillance economics insinuating its way into traditional subscription offerings, and eroding trust and the user experience? Check. Journalists being laid off while citizens hunger for local news and accountability? Check.

Every time we take our eye off the ball — our eye off the user or the reader or the purpose of journalism or journals or books — we risk straying into perilous territory. If Gatehouse Media had returned from bankruptcy to focus on the reader, they might be benefiting from the resurgence in goodwill toward journalism and have a story not unlike the New York Times’ to tell — a story about crowds of new subscribers and piles of new subscription revenues. If Forbes were focused on the reader, their pages might not be vomiting ads and scripts at their users, repelling readers even as the content buried behind these assaults relays important insights.

In the meantime, check those renewal dates. There’s a scam loose upon the land of local newspapers, especially those owned by Gatehouse Media.

P.S. You can feel safe subscribing to “The Geyser.” We’ll never do anything like this to our subscribers, and we have no ads.

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