Long past early days of paywalls, pubs finding right fit
Monetizing newspapers in the digital age has proven an industry-wide challenge — and nearly two decades after the first online paywall was erected, the experiments among publishers continue to be as diverse as the newspapers themselves.
When The Wall Street Journal began charging for content in 1997, a year after the launch of wsj. com, Dow Jones & Co. became the first publisher to institute a digital subscription model.
Some 18 years later, more than 450 North American newspapers have launched some form of paywall, and while there still isn’t a magic bullet, many have determined — through years of experimentation — what works and what doesn’t.
“There isn’t just one [paywall] that fits all newspapers and magazine groups,” said Paul Johnson, CEO of paywall platform provider MPP Global. “It’s really understanding what the client wants and how they want to engage with the audience.”
Figuring out how a newspaper can best connect with its audience is key to understanding what, if any, digital subscription model or paywall system will be successful.
“The size of the paper is less relevant than the loyalty of the publication’s online users,” said David Brauchli, global director of communications for paywall platform Piano Media ( formerly Press+). “Sites that have lots of people who love reading them and check back continually during the day are more likely to be successfully monetized than sites whose users and traffic come from search engines or social media.”
What are the options?
There are four main paywall models, but as both Johnson and Brauchli stress, they can be modified to fit a particular publication’s strategic approach.
The freemium model locks some content down, while other content remains free. A metered, or soft paywall model, allows users to view a certain amount of content before being asked to pay, and a hard paywall allows only paid subscribers to access all content.
The fourth, and newest model garnering attention among publishers, is based on micropayments, which allow users to pay for content on a per-article basis. The Winnipeg (Manitoba) Free Press in Canada became the first newspaper to adopt such a model in April.
It’s akin to an iTunes for newspapers, said Paul Samyn, editor-inchief of the Free Press.
The publisher said it made a point to learn from other media in its transition to micropayments. The Free Press didn’t have a paywall at all before May 11, but has since launched a new website and digital subscription model that facilitate the new pay as-you-go framework.
“We wanted to get into the digital game,” Samyn said. “We couldn’t continue to give away content and not get anything in return.”
The Free Press wanted a system that would be seamless for readers. To that end, the paper worked with MPP Global to build packages based on a user’s preferences. A reader could choose to pay for a digital subscription, for example, or to pay per article. Initially, the Free Press requires readers to register, and after a certain number of articles have been read they are prompted to create a payment account with a credit card. Full digital access is priced at $16.99 a month and includes Saturday delivery of the print edition. Individual articles, meantime, are priced at $0.27 apiece.
“What we’re hoping is that people will decide that they don’t want to pay upfront — but they want to read one column or one article — then $0.27 is nothing,” Samyn said.
Readers aren’t charged until the end of the month so they can decide whether buying a full digital subscription or continuing a la carte is the best option for them.
“We wanted to stop trying to impose subscriptions based on newspapers and instead start looking at purchasing decisions based on the Internet,” Samyn said.
The Free Press’ model also allows the publisher to monitor users’ reading habits through MPP Global’s “probe,” which Johnson describes as code that resides on the paywall network and constantly monitors website traffic. Through this probe, the Free Press can identify end users and determine what articles are being read.
“It essentially gives users a digital fingerprint,” Johnson said. “It can identify what they are reading: articles, (specific) journalists, etc. and we can apply rules to that traffic.”
For the Free Press, that means the website looks different depending on the user.
“My read is different from my mother’s, whose is different from yours,” Samyn explained. “The site starts to pick up and send content based on the type of reader.”
If a user reads all sports content, for example, that would appear on top when they visit the site. This also allows the Free Press to create packages for readers or to determine how different content should be priced. In the future, investigative pieces and exclusives might get a higher price tag, Samyn said. The Free Press may also create bundles depending on user engagement, for example all sports or entertainment news would carry a flat rate per month.
“We need something that will enable us to provide the level of journalism that a city like Winnipeg, Manitoba needs,” Samyn said. “We need to stay in the game. I think this is a model for sustainability.”
Globe hits 65K paid subs
The Boston Globe, meantime, has been through a few iterations of its paywall model and has achieved a high level of success, touting about 65,000 digital-only subscribers — the highest number of digital subscribers for a regional daily.
In 2011, the publisher instituted both a freemium and a hard paywall model with tandem websites (see News & Tech November/ December 2010).
“We were kind of at the forefront of having a two-site approach,” said Peter Doucette, who oversees circulation as The Globe’s vice president of consumer sales and marketing. “We recognized that we needed to try something, and that we needed to be bold.”
So, the paper opted to create a secondary site to its longtime free Boston.com, and launched bostonglobe.com with a hard paywall.
While the launch of the paid site was initially well received, Doucette said it’s been an evolutionary process.
The Globe still operates both sites, but the interaction between the two is very different than when the pay site first launched. Initially the free Boston.com site included content from The Globe. Now, all Globe content is on BostonGlobe. com and the site has transitioned from a hard paywall to a metered model. When the paper moved to this model in March 2014, users were allowed 10 free articles. Now they are asked to pay after reading five. Digital-only access is currently priced at $0.99 a month.
“The benefit we’ve seen [with the soft paywall] is that it allows casual visitors to experience content at some level, while not allowing too much to be free that it diminishes the act of subscribing,” Doucette said. “It’s a balancing act.”
For Piano Media, Brauchli said, metered paywalls represent the most successful model among its clients.
“The meter allows casual traffic, such as that from social media or search, to sample the site unimpeded by the paywall, which targets the heaviest users,” he said.
For The Globe, experimentation and personalization have been the keys to success.
“We’ve put a lot of time, energy and resources into taking advantage of the traffic we have and optimizing that traffic,” Doucette said.
The paper has done hundreds of experiments on how to maximize and ease user interaction. Brauchli applauds that method and believes knowing what readers want is the key to success.
“Publishers who invest the time and effort into finding out what their customers like and then offer them more valued content are more likely to be successful,” he said.
The Globe has grown its total audience by almost 100 percent in the last three years, according to Doucette, and roughly one-fourth of its overall readership is digital.
“We’ve found ways to augment print with digital,” he explained. “We continue to try and figure out how to invest, adapt and adjust to put ourselves on a path to sustainability.”
And that flexibility is paying dividends. In the first quarter of 2015, The Globe sold more digital subscriptions than print subscriptions for the first time ever.
“This isn’t because print is failing,” Doucette said. “Its because digital is growing.”
As The Globe is able to learn more about users, the paper can tailor content for specific groups. Going forward, Doucette said the paper will increase personalization.
“We spend a lot of time on user experience,” he said. “It’s a good tool. I think where we’re going is a much more dynamic-based model that is more personalized.”
Still other papers that have instituted paywalls have ultimately decided charging for digital content isn’t the right model for them. After determining that a paywall wasn't sustainable, The Toronto Star dismantled digital subscriptions altogether in March. The reaction from readers?
“It was a non-event,” said Sandy MacLeod, vice president of consumer marketing and strategy at The Toronto Star.
The paywall just wasn’t working to retain readers and subscribers, he explained.
In August 2013, The Star put up a standard metered paywall — the model most newspapers were adopting at the time, MacLeod said. The meter was set at 10 free articles per month and print subscribers were able to add digital access for $4.99 a month.
MacLeod said he was pleased with the initial launch and the initial uptick in subscriptions. By the end of 2013, though, growth on the digital side stalled.
“Our paywall hit a wall so to speak,” he said. After finding digital growth difficult beyond a certain threshold, The Star embarked on a research journey. Staff investigated a number of other newspapers of all sizes and found that most of the companies experienced a similar trajectory. Even with heavy marketing and discounted subscriptions, it was clear that a relatively small number subscribers were in favor of the paywall, and it was going to be difficult to increase that number, MacLeod said.
Another six months of research and strategizing has led The Star to a partnership with La Presse of Montreal. In Spring 2016, The Star plans to break out its own tablet presence via an app called Star Touch, which follows the lead of La Presse’s hugely successful La Presse+ tablet app. La Presse’s $36 million investment in the app has made it the publisher’s primary product.
“We don’t believe (Star Touch) can coexist with a paywall,” MacLeod said. “We think that continuously improving tablet and smartphone applications is the best way forward for us.”
MacLeod feels strongly that with significant downloads, readers and a sizeable daily audience using the product, The Star — like La Presse — will be able to sell “significant advertising at impressive rates.”
“Pulling the paywall was a pretty bold move and we were willing to make it,” he said.
Meantime, a survey of newspapers conducted by Research and Analysis of Media during the International News Media Association’s World Congress in May, showed declining interest in consumer paid content and paywalls. In 2013, a similar RAM survey found that 59 percent of INMA newspaper delegates said paid content was critical, while this year’s number dropped to 46 percent. Only 27 percent viewed paywall development as critical vs. 48 percent in the 2013 survey.
Instead, the survey showed a sharp focus on digital transformation, with rising emphasis on mobile and data analytics. Sixty-nine percent of INMA delegates surveyed said mobile revenue streams were absolutely crucial, compared with 48 percent in 2013. Of those surveyed, 58 percent reported that data analytics were absolutely crucial, compared with 41 percent two years ago.
While newspapers will undoubtedly continue to erect and modify paywalls in an effort to protect and monetize their content online, the next big challenge (or opportunity) may very well lie in launching new products for which readers are more willing to pay.
For N&T’s complete list of the more than 450 North American newspapers with paywalls, visit www.newsandtech.com/stats/ paywalls.html.