More Paywall Failure

The Wall Street Journal has a round-up of newspaper paywalls, and it ain’t pretty:

So far, the Star Tribune in Minneapolis has attracted 14,000 digital subscribers—equivalent to about 5.7% of its existing weekday print subscribers—since it started charging readers for its website in November. The Boston Globe has sold about 16,000 digital subscriptions, which include those for mobile devices, in the three months after it launched a paid website last fall, compared with its daily print circulation of about 200,000. Meanwhile, Newsday in New York had fewer than 1,000 paying digital subscribers two years after erecting an online paywall.

The results of a Pew study that got a look at the books of a half-dozen papers are similarly harsh:

On average, for every new dollar the newspapers were earning in new digital advertising revenue, they were losing $7 in print advertising revenue. The papers seemed not to be diversifying their revenue streams or coming up with innovative products at a fast enough clip.

The only papers that have had decent success with paywalls are the Financial Times and the Wall Street Journal.  The New York Times has had moderate success.  Downmarket papers, not so much.






54 replies
  1. 1
    c u n d gulag says:

    When you think about it, it’s kind of amazing.

    Newspapers NEVER made much of their money from subscriptions – most/all of it came from advertising and classifieds.

    And this is the model that blogs like my beloved BJ, C&L, L&M, and others, follow.

    And yet, the people who created this format, decided that they would instead, return to a subscription-based model for access to their electronic newspapers.

    I know that they tried for years to subsist on ads for access via computers.
    Maybe, it wasn’t the it wasn’t viable – maybe they were doing it wrong!

    I remember, only 6-7 years ago, while I got the paper electronically for free, I had to pay to read Krugman, Kristoff, and Rich, on the NYT’s Op-ed (and pay for Freidman, Down, and others I didn’t want to read) – while the WSJ was charging for it’s electronic newspaper, but giving FREE access to it’s Op-ed page.
    That worked out just fine for the NYT’s!
    So fine, they stopped doing that a little over a year later.

    Maybe, YOU’RE DOING IT WRONG!?!?

  2. 2
    MikeJ says:

    The only papers that have had decent success with paywalls are the Financial Times and the Wall Street Journal.

    Because nobody pays for either one themselves. If you can’t charge the subscription to somebody else you have no reason to read the WSJ.

  3. 3
    Rommie says:

    A group of local papers in Michigan, including mine, went to a combined digital format recently. It’s not a paywall, but it also kind of sucks, as the local paper has gone from the LOCAL paper to a local version of a statewide paper. I swear I sometimes know more about the happenings in Muskegon than the hometown from reading it. The project would die quickly if they tried to charge for it.

    They also went to 4-day a week delivery of the paper, with 7-day still available in boxes, retail outlets, etc. I have a feeling that will seem quaint in 10 years.

  4. 4
    Amir Khalid says:

    The New York Times’ paywall is so badly built that even I have learned how to get around it. NYT seems not to be making any effort to address this widely known problem. I suspect this is deliberate: they want to get some subscriber revenue online, basically on the honor system. They’re resigned to not getting anything from the likes of me because they realize (from the first time they put up a firewall) that without an option for effective free access they’ll lose eyeballs and kill their brand on the Intertoobz.

  5. 5
    JGabriel says:

    c u n d gulag:

    Newspapers NEVER made much of their money from subscriptions – most/all of it came from advertising and classifieds.

    Craigslist jacked the market for classifieds. It’s not a viable revenue stream for anyone else anymore.

    And this is the model that blogs like my beloved BJ, C&L, L&M, and others, follow.

    Few of which make enough money to sustain their own infrastructure, much less pay salaries. Cole was just blegging for funds to pay for a server upgrade last week.

    I know that they tried for years to subsist on ads for access via computers. Maybe, it wasn’t the it wasn’t viable – maybe they were doing it wrong!

    I think there’s a case to be made that advertising rates are, in general, too low on the internet. But the internet is dominated by advertising wholesalers, like Google, who make their money by selling tons of cheap ads over millions of sites — versus single site ad retailers like daily newspapers, or individual blogs unaffiliated with any advertising groups.

    .

  6. 6
    LarsThorwald says:

    Well, shit, if newspapers are becoming obsolete in the age of digital, whatever will become of my beloved record industry labels? Next thing you know, people will be listening to music without paying for it. The mind reeeeeels.

  7. 7
    MikeJ says:

    @LarsThorwald: They might even wind up paying the people making the music instead of the people that hire the people to take disc jockeys to strip clubs.

  8. 8
    Cliff in NH says:

    for every new dollar the newspapers were earning in new digital advertising revenue, they were losing $7 in print advertising revenue.

    Well, when you tell your print advertisers that they won’t be in the online version, and when you then accept BS stupid web ads that have nothing to do with Anything in your print area… are they really surprised? Should they be?

  9. 9
    Schlemizel says:

    @MikeJ:
    Actually it could be a bit of a problem. If there are no more original reporters (not that the sludge coming from our once great presses is what it should be but it is something) where will this information come from?
    bigmedia.com?
    Drudge.com?

    As bad as tings are now they could get a lot worse.

  10. 10
    cmorenc says:

    The New York Times isn’t helping itself either by making the meatspace (print) version if its daily paper so exorbitantly expensive: $2.50. Usta be when I was out somewhere eating breakfast or lunch without a companion, I’d buy a hardcopy of the NYT and put the mealtime to good use, because the breath and depth and diversity of articles in just about any day’s NYT was better than you could get anywhere else in a format much more conveniently and safely usable around food and drink than any digital media, no power cords or batteries necessary. That was particularly true on Tuesdays, which had the Science section. But what was a reliably 2x per week habit has now receded to a 2x per month indulgence at best.

    Perhaps it has become extremely expensive for the NYT to print and distribute its hardcopy, and they have to figure out a way to get more revenue from their digital distribution of the paper in order to survive, and not just because more eyeballs now receive their news mostly from digital formats. They need to figure out something soon, or else too many people will become dependent on much less-well rounded blog-sites for their news. As much as I like BJ, I don’t think coming here or e.g. to Kos is at all a well-balanced, adequately full source of information.

  11. 11
    ET says:

    People got used to papers online being free in the early days of the Interwebs. Changing the model was never going to be easy.

    However, if newspapers don’t make money some way(s) then there will be no/fewer newspapers and they where would the free articles be?

  12. 12
    wilfred says:

    Whatever the reason, the decline of newspapers is going to have negative consequences.

    Forgetting for a moment all the BIG DEAL things that blogs thrive on, there remain the everyday things, the local muckraking that helps keep politicians honest.

    Be careful what you ask for.

  13. 13
    RalfW says:

    As a former Star Tribune reader, here’s what the paywall has done for me: I used to visit the home page daily, and perhaps read 0-3 articles a day. I was logged in, so they could track my reading habits, see if I clicked ads, and figure out (if they cared to) how to sell my eyeballs to advertisers.

    Now?

    I visit the home page never – why visit if I am using up my 20 clicks as soon as I click any story that looks interesting. I need to save some of my 20 clicks for late in the month!

    I only ever read a Strib article now if someone who’s news judgement I like links to the Strib on Facebook. Which is like 5 clicks a month.

    So, to recap: Advertisers could market to me 80-120 times per month pre-paywall. Now? Maybe 5 times a month. FAIL.

  14. 14
    Pavonis says:

    I paid for a digital subscription to the NYT. Journalists need to be paid. And they serve an essential role in a democratic society. If we didn’t have journalists, we’d have to rely on corporate and political party spin for our news and we all know what will happen to our democracy then.

  15. 15
    Gin & Tonic says:

    @MikeJ: How’s that revenue model supposed to work for news, though? I can (and do) buy concert tickets to hear musicians I like, and trust they’re getting more of that revenue than when I buy one of their CD’s (unless they self-make the CD’s and I buy them at the venue.) But how do I pay, say, James Risen to read an article that took him maybe six months to write? There’s the problem. Real news-gathering (yes, there still is some) costs money and requires infrastructure. The Grateful Dead made plenty of money and didn’t need the record labels to do so. Long-form investigative journalism doesn’t seem like it could be sustainable on its own.

  16. 16
    c u n d gulag says:

    @JGabriel:
    Thanks for the info.
    Yeah, I’d kind of forgotten about Craigslist.

  17. 17
    Elizabelle says:

    comment from “Alan Martin” on the WSJ story, and it speaks to me:

    If newspapers succeed with firewalls as they conceive them, we will return to the dark ages when the average person could only afford to read one or two papers. We might as well throw away the internet if people who wish to be informed about world news can’t surf various news outlets.
    Newspapers should form a consortium that allows a paying subscriber to one major news source to surf them all.

  18. 18
    RalfW says:

    OTOH, I do plan to start a Sunday-only NYT subscription very soon.

    My life has been in very chaotic transition for over a year, so no time for Sunday NYT (two home remodels, a move, and an 81 y.o. dad with health problems. All but dad will be over in the next 10 days! [dad and I are not ready for dad to be over…]).

    I still love the Sunday Times experience, and I’ll get paywall access too. That’s worth doing, and worth seven bucks a week. I agree w/ wilfred and others above who wonder what will happen w/o print reporters, that will be my small contribution – even if it means I infinitesimally support BoBo.

  19. 19
    Corey says:

    I wouldn’t be so certain about paywalls not working. In the end, they’re very new tech, and papers are experimenting with getting the thing right.

  20. 20
    jayackroyd says:

    @Amir Khalid:

    Yes, that’s right. I call it the pay tip jar for that reason. But, you know, I’ve been having dead tree delivery problems lately. If we decided to stop taking the paper, I’m pretty sure we’d pay for the digital edition. For the convenience, and because we rely on it.

  21. 21
    RalfW says:

    @c u n d gulag:

    Truly, Craigslist was a devastating blow to print media. My partner worked in the newsroom of big city dailies for over 18 years. He fled two years ago after 4 rounds of layoffs and death-spiral gloom.

    Classifieds were a goldmine that has been totally shuttered by Craigslist, eBay and such. The profit margins & volume were huge in classifieds. All gone, never coming back to print journalism.

    And while I think print executives made a lot of bad decisions once the revenue model started falling apart, I will not judge them for having built the old system. It worked well for many decades.

    Change is difficult. Some manage it better than others. Unfortunately, compounding the errors in print were that vulture capitalists came in as the revenue model was seismically changing. And we know from Bain’s track record of “success” what that meant: more asset stripping, layoffs and bankruptcies.

    And actually, now that the private equity folks are out at the Strib, I hear that things have kind of stabilized, their print subscription #s are holding fairly firm, and while this may be a leveling off before a next drop, they have people at the top now that care about print media again, not just vulture capitalism, and it is showing in the product. From what I hear, anyway.

  22. 22
    c u n d gulag says:

    @RalfW:
    Since they’re let go so many reporters, and investigators, too many papers, and TV networks, are now dependent on AP as their news source.

    And I can guarantee you – THAT won’t end well…

  23. 23
    Shawn in ShowMe says:

    At this rate it will soon be commonplace for newspapers to have fund drives a la PBS and NPR. Can’t wait for an ultra nice, conservatively-dressed lady to pop up in my browser and remark, “Isn’t (insert number here) a small price to pay to read leading lights like David Brooks, Thomas Friedman, and Maureen Dowd?

  24. 24
    ET says:

    @Elizabelle: Yeah but if newspapers can’t figure a way to make enough money to pay the journals to create those articles there won’t be articles to link to.

    A bit of a vicious cycle.

  25. 25

    @Pavonis: I would rather pay the excellent and brave journalists at Democracy Now and Propublica than the mediocre careerists at the NY Times, etc.. I don’t even donate to NPR anymore unless they run a strong animal rights story.

  26. 26
    Shawn in ShowMe says:

    Clearly the solution is to merge merge newspapers with pay gaming sites. Discuss the absurd article you just read with your fellow combatants. Find the easter egg on level 7 that allows you to fire Brooks, Friedman and Dowd.

  27. 27
    draftmama says:

    All I have to do is delete my cookies when I run out of 20/mo and presto I’m new again.

  28. 28
    KXB says:

    Perhaps a daily newspaper is on the way out, but perhaps a weekly paper, with daily digital updates, may be one possibility. Weekly magazines such as The Economist and Time seem to doing well, as they provide long-form journalism that you cannot always get time to read online. But daily news, such as sports and weather, can be done far easier online.

  29. 29
    Elizabelle says:

    @ET:

    I wonder if a consortium of kinds might work for the big dailies — share the cost of keeping various overseas bureaus open; feed readers to stories in your partners’ papers; conduct a multi-paper series on a pressing issue (like the LATimes recent excellent payday lending articles).

    Maybe the networks could partner with some of the foreign bureaus; feed traffic to, say, the NYTimes or Boston Globe or Minneapolis Trib for more information.

  30. 30
    RosiesDad says:

    I wonder if this accounts for people who pay for partial subscriptions so they can get digital access. I get the Times delivered to my driveway on Saturday and Sunday and as a paper edition subscriber, I get full digital access.

    As wasteful as it is, the paper usually goes straight to recycling untouched and the content is read online. I pay for it because occasionally there is content that warrants being able to hold the physical paper and also because I want to financially support the newspaper.

  31. 31
    Elizabelle says:

    I am not missing the NYTimes or LATimes too much, given that The Guardian (UK) is online. Excellent paper.

    (And they just had an article on The Civil Wars.)
    http://www.guardian.co.uk/musi.....MUSTXT9385

    They streamed Bruce Springsteen’s new album too, one cut at a time.

  32. 32
    Pavonis says:

    @Shawn in ShowMe

    Gaming can be very educational for Republicans these days. Take SimCity, for example. Sometimes you do have to increase taxes and spending as the government in order to grow your city and make it nice enough that people will live there. No matter how low taxes are, people will flee a polluted, crime-ridden hellhole with broken infrastructure. Games like SimCity are certainly much better for your civic knowledge than the WSJ editorial page.

  33. 33
    Elizabelle says:

    @RosiesDad:

    Yeah, I have figured out that taking the NYTimes paper subscription, M through F, is 40 cents more than paying for a monthly digital sub.

    So I will be doing that. Hoping to clip articles and maybe share the dead tree version with my neighbors.

    If the WaPost ever goes behind a paywall, it’s gone to me.

  34. 34
    jayackroyd says:

    @RosiesDad:

    I’m pretty sure subscribing just to the NYT Book Review also qualifies you for the digital edition. Less money. Less paper.

  35. 35
    Culture of Truth says:

    I feel bad the newspapers, actually. The good ones work hard and create a useful product, and even perform a valuable public service. It’s easy to say, adjust to technology, but not so easy to do. Sure, a lot of newspapers are crappy, but not so terrible that bloggers don’t cut and paste from them or link to them. Which is great for both, but one group is doing the reporting and the other is doing the linking and snarking.

  36. 36
    Culture of Truth says:

    As they said on Chris Hayes’ show this weekend, you are the product. Online advertising is the way to go, or perhaps the NYTimes can just be sold to Google.

  37. 37
    Culture of Truth says:

    or Apple, which is sitting on a mountain of cash.

  38. 38
    jheartney says:

    Online advertising has the problem that you can actually measure how valuable it is, because you can count the clicks. It turns out it’s not valuable, so you can’t make money selling it. There goes the revenue stream.

    I don’t know if it would work, but I think if they want to try paywalls, what they really need to do is combine as many papers as possible into a single low-priced subscription – think Netflix for news. No single paper can offer enough value to drive significant subscription rates, but what if they all did it together? They could even link to each other, secure that anyone with access to one paper would have access to all the others. And with an all-you-can-eat business model, they’d be encouraging readers to both sample widely and get used to reading their stuff all the time.

    There’s a reason unlimited access is so popular on the internet – it doesn’t penalize you for using the service, unlike fees for every article or every paper.

  39. 39
    Martin says:

    @Culture of Truth: No, the solution is to follow the app model. Apple has moved 25 billion apps in 4 years. That’s over $4B returned to the developers of those apps.

    People will buy an iPhone/iPad/Android subscription to these papers, if the experience of navigating the paper is good. The problem with the paywall was how hard it is to pay. I’m not going to take 5 minutes and risk whatever security to give you my credit card. I’m just not. But I’ll push the ‘Buy’ button on my iPhone all damn day long.

    The Daily is a model that is working. It’s not overwhelmingly successful, but it is working. 100,000 subscribers at $1 a week. And it’s fairly new with no loyalty base to draw off of. There’s no reason why that model can’t work for other papers – particularly with a combined subscription/geographic ad model. Not tons of ads – but one premium ad per page or less.

    If there’s one thing that Google has fucked up is that they made it so easy to put 100 ads on each web page [cough] that they drove the ad price to damn near zero by cranking supply up so far above demand. Look at an ad network like The Deck that is much more controlled – one small ad per page, and a very high ad revenue because both the ads and sites are curated. There are people drawing a full income off of sites with a single page, and a single ad on that page. Papers of all people should be able to work together and replicate that model for tight geographic advertising.

  40. 40
    Rafer Janders says:

    @cmorenc:

    The New York Times isn’t helping itself either by making the meatspace (print) version if its daily paper so exorbitantly expensive: $2.50.

    On September 11, 2001, the Times still sold for $0.75 (see link below). It’s been a tremendous increase since then.

    http://www.nytimes.com/learnin...../0911.html

  41. 41
    PurpleGirl says:

    @Pavonis: I would pay for digital subscription IF they had an online-only rate. I do not have a smart phone or a tablet and I do not intend to get either gizmo so a combo subscription is worthless and too expensive for me. After my freebie subscription ended and wrote and told them that. I have no idea how many people are in the same situation but I wonder at them ignoring any group of readers/potential subscribers. (And no I do not want a print edition subscription either — too expensive and I don’t want to waste the paper.)

  42. 42
    justawriter says:

    I write for a rural newspaper group and we just put the first paragraph or two of our lead stories on the web. We also sell photos that appear in the paper over the web. We are far enough out in the sticks where there aren’t any serious bloggers writing about our schools, city council, roads or pretty much anything else. Even Craigslist doesn’t list us (well it does, sort of, but there are no local ads on the local pages). We make a reasonably profitable niche writing about the stuff everyone wants to know but doesn’t write about themselves. And then we don’t give it away.

  43. 43
    Watson says:

    Tell us something we don’t know mistermix.

  44. 44
    dj spellchecka says:

    the la times recently announced their paywall, which starts today…good timing

  45. 45

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  46. 46
    Brachiator says:

    The only papers that have had decent success with paywalls are the Financial Times and the Wall Street Journal. The New York Times has had moderate success. Downmarket papers, not so much.

    The Times of London (like the Wall St Journal, a Murdoch property) is behind a paywall and, as someone upthread noted, the LA Times is going paywall as well.

    You also have to include the Daily, and all the newspapers that offer subscription based apps on the Kindle or the iPad.

    None of this appears to work very well, so far, nor does it protect print subscriptions.

    It’s sad, because it does mean, in the short term, an absolute decliine in news coverage.

    Tangentially related to this is the attempts of publishers to kill libraries by jacking up ebook costs:

    Random House Raises E-Book Prices for Libraries as Much as 300 Percent
    __
    Last month, Random House announced that it would be making some changes to the way it sells e-books to libraries, including price increases. But libraries didn’t expect cost boosts as high as 300 percent, where no titles are offered under $25. Some even go as high as over $100 per title.
    __
    While the price hike is a significant one, Tech Crunch made the argument that book publishers are trying to create a model with selling e-books that somewhat resembles the model it had with physical books. E-books can easily be duplicated and can never be damaged, meaning libraries never pay for replacements. While publishers win by being able to deliver e-books to several markets faster, they’re now looking to benefit a little more in the financial aspect.

    This is beyond stupid, and so unthinking. One thing that publishers could do with ebooks is advertise within them, and update the advertising periodically to push new titles.

    But all these clowns are stuck in trying to make old, outdated business models work.

  47. 47
    Devon says:

    You fucking morons. Read the Pew Study. They expressedly state in the first fucking page that the study did not address any revenues from paywalls. Dipshits.

  48. 48
    stevestory says:

    Newspaper readers have never cared enough about the content to cover costs. Newspapers were only viable because advertisers paid through the nose. I remember buying a 4-line classified ad in the Raleigh N&O for >$100 back in the day, for instance.

    Technology obliterated this structure, and so basically every newspaper in the country is toast.

    I’ve spent some time trying to imagine what the post-newspaper world is going to look like. And by post-newspaper, what I mean is even a big state like mine, Florida, having no newspaper. Not one. Hard to imagine, but I think this will be the situation 10 or 15 years from now.

    Here’s what I’ve concluded is the most likely scenario: since tv-based news networks are viable, essentially all the basic reporting will be done by them. All your basic national news will be MSNBC, CNN, etc., and all your basic local news will be done by the local tv affiliate. Web news won’t be newspaper-based anymore, but tv-news-based. A small number of genre sources will be profitable, like the WSJ or FT or National Geographic, but not many. Most genre info will be low-cost affairs done by hobbyists.

    In short, very little will change, except your grocery ads will appear in your mailbox by themselves, rather than inside a thick wrapping of worthless Associated Press content about a train wreck in Djibouti or that wildfire in Rancho Cucamonga.

  49. 49
    stevestory says:

    The implosion of most ‘news’ orgs doesn’t bother me at all. I’ve long argued that 99% of ‘news’ is utterly worthless information. I just scanned the AP and here’s the top wire stories:

    Obama focuses on unity, Netanyahu on sovereignty

    Don’t give a shit.

    Police break up anti-Putin protest in Moscow

    Don’t give a shit.

    Ohio becomes a Romney-Santorum dead heat

    Don’t give a shit.

    Baby dropped in field by tornado buried in Indiana

    Don’t give a shit.

    Limbaugh says his apology to student was sincere

    Don’t give a shit.

    25 Iraqi police killed in insurgent shooting spree

    Don’t give a shit.

    Pal: NJ man in spy case spoke of ‘viewing party’

    Don’t give a shit.

    Syrian refugees in Lebanon recount terror

    Don’t give a shit.

    Jury selection under way in Virginia Tech trial

    Don’t give a shit.

    Separated couple awaits immigration law change

    Don’t give a shit.

    15 minutes on Wikipedia is more informative than a year’s worth of CNN, AP, This Week With John McCain, etc.

  50. 50
    Brachiator says:

    @stevestory:

    Newspaper readers have never cared enough about the content to cover costs.

    Kinda beside the point. Newspapers existed largely to deliver readers to advertisers. Good editorial content was an add on. But since the 19th century, no newspaper, and few magazines, tried to depend on subscriptions.

    15 minutes on Wikipedia is more informative than a year’s worth of CNN, AP, This Week With John McCain, etc.

    Nonsense. Wiki articles are dependent upon the media, tv, radio, newspapers, etc. You ever check out the references in the footnotes?

  51. 51

    The newspaper is a dying model. The companies that own them are determined to wring the last dollar out of them before they go the way of payphones. The pleas for your subscription dollars are part of that effort. Why bother?

    Why not focus efforts on developing new ways to do the things that we want newspapers to do?

  52. 52

    @stevestory:

    CNN, AP, This Week with John McCain, are not newspapers.

  53. 53
    pseudonymous in nc says:

    @MikeJ:

    If you can’t charge the subscription to somebody else

    Or, at very least, claim it as an expense on the tax return — which is relatively easy to justify for the WSJ and FT (and even the NYT), but less so for the Bumfuck Courier-Post.

  54. 54
    P.J.Andros says:

    HOW TO GET AROUND THE LOS ANGELES TIMES PAYWALL?

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