Media giant Gannett (NYSE:GCI) on Wednesday announced several company initiatives, including the institution of a paywall system across its 80 small-town newspaper websites, as well as new plans to return money to shareholders.
Gannett said the new model for its U.S. Community Publishing segment will charge for content and limit non-subscriber access, though national paper USA TODAY will remain free. President Bob Dickey told Forbes the model will be similar to The New York Times’ — non-subscribers will be able to read a small number of articles for free each month before being turned away.
Gannett expects the move to increase subscription revenues by 25%, generating an extra $100 million in annual earnings for the publishing segment starting in 2013. The company also said in a statement that it expected to “significant incremental advertising revenue from digital platforms launching with the new model.”
Also announced during Gannett’s investor meeting were plans to return more than $1.3 billion to shareholders by 2015. The company said it has authorized a 150% increase in its dividend, from 60 cents to 80 cents per share. The new quarterly dividend of 20 cents will be payable on April 2 to shareholders of record March 9. Gannett also will buy back $300 million in shares over the next two years.
GCI shares gained more than 4% Wednesday on the news, putting the stock up almost 17% year-to-date. However, Gannett stock was ceding most of those gains in early Thursday trading.
– Kyle Woodley, InvestorPlace Assistant Editor
Disclosure: Kyle Woodley is a former Gannett employee