BEN SHAW

Newspapers & Technology Magazine - - Contents - ▶ BY BEN SHAW COLUM­NIST

Only a very few news­pa­pers that purely fo­cus on qual­ity jour­nal­ism will be able to sur­vive on ad­ver­tis­ing alone. And let’s face it, your pub­li­ca­tion prob­a­bly isn’t one of them. Pub­lish­ers must de­velop a sub­stan­tial rev­enue stream di­rectly from their read­ers in or­der to have a sus­tain­able busi­ness model.

While na­tional ti­tles and some big re­gional news­pa­pers are show­ing pos­i­tive trends and quite good num­bers it is clear that first movers tend to be mar­ket lead­ers and show good growth. How­ever, many re­gional brands are still fo­cused on trans­form­ing print sub­scribers to dig­i­tal. Over the years, you prob­a­bly have heard the fol­low­ing from pub­lish­ers:

• We can’t can­ni­bal­ize the news­pa­per!

• The fall of print reach and ad­ver­tis­ing will stop soon.

• Peo­ple will not pay for qual­ity con­tent on­line.

• Dig­i­tal ad­ver­tis­ing will con­tinue to grow and we will be the win­ners. But all of these are wrong.

Kalle Jungkvist, WAN-IFRA’s prin­ci­pal con­sul­tant for reader rev­enue, said, “We should be con­fi­dent about what we pro­duce and be will­ing to put a price tag on it.”

For most lo­cal news­pa­pers, how­ever, the over­all paid con­tent per­for­mance is weak. There are many dif­fer­ent rea­sons for this: we of­ten started too late or have had dif­fi­cul­ties defin­ing the con­tent that re­ally dif­fer­en­ti­ates us from the com­pe­ti­tion.

Lo­cal is a strength, but not a niche in it­self. The most im­por­tant ques­tion for any pub­li­ca­tions want­ing to go into or re­launch paid con­tent is to answer: What in your of­fer is re­ally driv­ing en­gage­ment in our lo­cal com­mu­nity? And what is the real size of your dig­i­tal reach? How many lo­cal, daily unique users do you get? I sus­pect it is a smaller num­ber than you think your dig­i­tal au­di­ence is.

We are liv­ing in times of grow­ing streams of news and views of ex­tremely var­ied qual­ity, where fake news is just one prob­lem. Com­bined with the growth of hate speech and slan­der, many turn to more tra­di­tional and trusted brands for news. This trend shows that the core of our jour­nal­ism – good and trust­ful sto­ry­telling, anal­y­sis, ex­pert com­ments, in­sight­ful opin­ions, and ex­clu­sive in­ter­views – is a valu­able prod­uct and does con­vert read­ers to sub­scribers.

So who around the globe is win­ning at reader rev­enue? There are many com­pa­nies that are show­ing the fruits of well ex­e­cuted strate­gies, some of which our consulting team has helped.

In terms of the mod­els, the big ma­jor­ity in the U.S. mar­ket use the me­tered model, most likely in­spired by The New York Times. Just a few use a hard pay­wall. The trend in the U.S. is clear. The me­tered model in­creas­ingly dom­i­nates the mar­ket.

In the Euro­pean mar­ket, it is more or less the other way around. The freemium model dom­i­nates but the me­tered model is also quite com­mon. Let’s take a look at a few of the best cases.

Afton­bladet

Prior to join­ing WAN-IFRA consulting ser­vices, Kalle Jungkvist was edi­tor-inchief of Afton­bladet New Me­dia. There he launched Afton­bladet PLUS in 2003, a freemium model dig­i­tal sub­scrip­tion. He set the price very low – only 2€ a month. Why?

He said, “We were a first mover – and a lit­tle afraid of what could hap­pen.

Was there a risk that we could lose our mar­ket lead­er­ship? We also wanted vol­ume; the more users who learn to pay the bet­ter, even at a low price.

“In hind­sight, I think we were right to set it at such a low price. We did not lose any traf­fic, de­spite the fact that we were the only news­pa­per in Swe­den with a pay­wall for nearly 10 years. For a mar­ket leader, it fell on us to ed­u­cate the mar­ket.”

To­day, the price for Afton­bladet has risen to €6 a month and €10 for a pre­mium of­fer. In to­tal, Afton­bladet has around 260,000 dig­i­tal sub­scribers gen­er­at­ing sub­stan­tial rev­enues.

Sven­ska Dag­bladet

The next ex­am­ple is the Swedish news­pa­per Sven­ska Dag­bladet. They have im­ple­mented what is of­ten called a bridge strat­egy. It is a strat­egy that maps the cus­tomer jour­ney from print to dig­i­tal and the steps to con­vert read­ers into dig­i­tal sub­scribers. It is used by quite a few news­pa­pers and demon­strates im­por­tant pric­ing dif­fer­en­ti­a­tion for dif­fer­ent groups.

As in most news­pa­pers, print sub­scribers are usu­ally older. The first goal is to give them dig­i­tal ac­cess and trans­form them to ac­tive dig­i­tal con­sumers. For this group, an e-pa­per ver­sion of the news­pa­per is very im­por­tant, as it repli­cates the news­pa­per read­ing ex­pe­ri­ence on­line.

At the same time, the pa­per has a big dig­i­tal au­di­ence where the ma­jor­ity are younger and many have never been print sub­scribers. In this case, the e-pa­per is not as im­por­tant.

Given the two groups have very dif­fer­ent be­hav­iors and pref­er­ences, af­ter sev­eral ex­per­i­ments, Sven­ska Dag­bladet de­vel­oped two price lev­els: a €19 pack­age for the tra­di­tional print sub­scribers that in­cludes the e-pa­per, cross­words and ar­chives; and a cheaper €10 of­fer for dig­i­tal sub­scribers with­out the ex­tra ser­vices men­tioned.

Folha de Sao Paulo

Many places around the world and out­side of Europe are still only be­gin­ning to ex­plore paid con­tent and reader rev­enue. The Brazil­ian news­pa­per Folha de Sao Paulo is one ex­am­ple of a suc­cess­ful strat­egy in South Amer­ica.

They only launched a me­tered pay wall in 2012. Twenty ar­ti­cles per month were free. Dig­i­tal sub­scrip­tions af­ter three months ex­ceeded their ex­pec­ta­tions, and they did not lose any traf­fic.

Two years later they at­tracted 150,000 dig­i­tal-only sub­scribers with a price of US$12.80 per month. They also had 350,000 print plus dig­i­tal sub­scribers who pay US$38 per month. The weak Brazil­ian econ­omy slowed fur­ther growth.

The fu­ture of reader rev­enue

And what about the fu­ture of paid con­tent? In Europe, the next wave of suc­cess­ful mod­els is al­ready be­ing tested.

A new crop of pure dig­i­tal, crowd­funded ini­tia­tives have com­mu­ni­ties built in from the ground up. The idea be­hind Krautre­porter, De Correspondent or El Es­panõl is that you know and trust the jour­nal­ism team in a small news­room. Reader in­put is val­ued and en­cour­aged, ap­peal­ing to a group of savvy, in­de­pen­dent-minded mil­len­ni­als who are will­ing to pay around 5 eu­ros per month to sup­port the project.

The Guardian is also heav­ily push­ing a do­na­tion strat­egy, but with clear price points. It’s sim­i­lar in Ger­many, where jour­nal­ism is not tax de­ductible. You can't sim­ply ask read­ers to do­nate what they want: there has to be a clear value ex­change – which ex­plains why read­ers of Die Tageszeitung in Ber­lin have a choice be­tween join­ing the co­op­er­a­tive so­ci­ety that owns it (and there­fore con­tribut­ing more cap­i­tal), or sim­ply sub­scrib­ing at a fixed rate.

If you would like to learn more about the best cases in paid con­tent or en­sure that your launch is suc­cess­ful, you can learn di­rectly from Kalle and my­self on WAN-IFRA’s new on­line learn­ing plat­form, the Me­dia Man­age­ment Ac­cel­er­a­tor. It can be ac­cessed at www.mma.wan-ifra.org

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