Newspapers rethink paywalls as digital efforts sputter
PAYWALLS were supposed to help rescue newspapers from the crisis of sinking print circulation as readers shifted to getting their news online.
But with a few exceptions, they have failed to deliver much relief, prompting some news organisations to rethink their digital strategies.
Newspapers in the English-speaking world ended paywalls some 69 times through May 2015, including 41 temporary and 28 permanent drops, according to a study by University of Southern California researchers.
Paywalls “generate only a small fraction of industry revenue”, with estimates ranging from 1 percent in the United States to 10pc internationally, the study in July’s International Journal of Communication said.
“People are far less willing to pay for online news than for print,” said USC journalism professor Mike Ananny, an author of the study.
Newspapers are in a difficult spot, he added, because online advertising generates a fraction of print’s revenue, and news organisations are already pressured by falling print circulation.
Alan Mutter, a former Chicago and San Francisco newspaper editor who now consults for media organisations, said the research confirms that paywalls have value in relatively rare circumstances.
The New York Times, The Wall Street Journal and Financial Times have been successful with paywalls because of their unique content, he said.
“It’s hard for a general-interest website to charge for news that you can get for free with a few clicks.
“Paywalls can backfire because they put a barrier between the newspaper and the casual reader,” he said.
“They are truncating the size of the digital market, when the most important factor for digital is scale.”
A survey this year by the American Press Institute showed 77 of the 98 US newspapers with circulations above 50,000 used some type of online subscription, which could be a “hard” paywall that fences off all content or allows some free.
But a number of English-language news organisations have dropped their paywalls in recent months, including the Toronto Star and British dailies The Independent and The Sun.
A study by Oxford University’s Reuters Institute for the Study of Journalism found only 10pc of readers in English-speaking countries were willing to pay for digital news.
“English-language publishers face a more difficult task in trying to build a large paywall business because there is so much free English content,” Mr Mutter said.
Mr Mutter argued that paywalls ran counter to the goal of boosting readership, and that news organisations need to think differently.
“Print is failing and digital is hard,” he said.
Although newspapers are losing online ad revenues to online platforms, they have the advantage of knowing their local markets and businesses.
“They have to work hard at being local marketing partners in the markets they serve,” Mr Mutter said.
USC’s Mr Ananny said news organisations need to find creative ways to develop pay models that don’t put readers off.
He also expressed concern that expanding paywalls may lead to a new “digital divide” where information is available only to those who can afford to pay.
The research suggests that “news organisations serve themselves and readers best when paywalls are fluid”, he said.
Many papers open up free content during major news events or emergencies, fulfilling a civic role, he noted. Others charge readers for access to special features or content.
“News organisations had better understand why they are dropping or raising paywalls,” he said. –