Tuesday, March 11, 2014

Are Newspaper Paywalls Paying Off?

During the first decade of this millennium, digital content (mainly free) was proliferating while printed content was struggling to find a large enough paying audience. Newspapers merged, cut days from their print schedule, and looked for other ways to cut costs while assessing the digital pricing landscape.

In the second decade, paywalls are beginning to pay off for top newspaper sites. The Wall Street Journal famously pioneered a paywall in 1996 that continues to be quite profitable. The Financial Times has more digital than print subscribers.

According to a study by the Online Publishers Association, papers have learned that digital subscriptions don't cannibalize print subscriptions. And the growth of digital subscriptions is actually helping the growth of advertising revenues, because publishers have more and better data about readers to help advertisers better target their audiences.

At the New York Times, digital subscription revenues are now higher than advertising revenues--demonstrating how much the content is valued by its online readers. In the next couple of months, the Times will be further segmenting its market to offer niche products for readers. No specifics yet, but hints suggest content about food and restaurants and content about "what you have to know about the world" to start your day. Meanwhile, digital subscriptions are available for smartphone and tablet apps, online access, and for educators.

Print-dominant papers are having a difficult time. Gannett just released its fourth-quarter 2013 results, and the news isn't good. According to Columbia Journalism Review, Gannett continues to increase prices on print content, and doesn't appear to be achieving its goals for digital subscriptions.
Other newspapers have cut content pricing experiments short. The San Francisco Chronicle tried a paywall, for instance, but eliminated it after a few months. On the other hand, for consumers who want digital everything, the Chicago Sun Times is testing the acceptance of Bitcoin for its content.

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