The Paywall Conundrum: Even Those Who Like Paying For News Don't Pay For Much News

from the just-one-site dept

For years, we’ve tended to mock newspaper paywalls — not because we don’t want to see news publishers get paid (that would actually be good!), but because it just doesn’t seem like a really sustainable way to build a news product for nearly every publication. In other words, nearly all media paywalls are destined to fail — often spectacularly — because they can’t generate nearly enough paying subscribers. There are exceptions, but they are few and far between. Large general interest news sites like the NY Times and the Washington Post seem to have made it work. Small, narrowly focused sites can sometimes get by as well — if their content is unique and special enough. But most general interest news sites are unlikely to be able to make it work — and a new study drives home that point. Even for people who like paying for news, they tend to only pay for one news subscription. Really.

As publishers worldwide put up paywalls and start requiring payment for their content ? about 50 percent of respondents in the U.S, Denmark, Australia, and the Netherlands say they bump into one or more paywalls each week when reading news; that figure is 70 percent in Norway ? ?we find only a small increase in the numbers paying for any online news ? whether by subscription, membership, or donation,? the researchers write. Following the Trump bump of 2017, the percentage of U.S. respondents who pay for news in the U.S. is stable at 16%, and stable at 11% in an average of nine other countries. Norway and Sweden are seeing particular success in getting people to pay up ? and ?industry data reveal that Norwegians and Swedes are prepared to pay online for tabloid titles VG and Aftenbladet (premium models) as well as more upmarket titles such as AftenPosten and Dagens Nyheter.?

In the U.S., by contrast, ?the main subscription focus has been at the quality end of the market.? The people who pay for news in the U.S. are wealthier and better educated than those who do not.

No matter how rich and educated they are, though, most people are only paying for one subscription. ?The average (median) number of news subscriptions per person among those that pay is one in almost every country.?

And here’s the thing: unless you’re pretty damn confident that enough people will buy into your paywall, moving to a paywall likely forecloses the ability to succeed with most other business models, by vastly limiting your audience (some publishers try to have it both ways with a “leaky” paywall, in which it’s not that difficult to get around it, but more and more sites appear to be moving away from the more leaky options).

This is why I still think there are better approaches. Get past the idea of a paywall — which is clearly a negative for users — and focus on adding value for people who want to pay, rather than punishing those who don’t or are unable to do so. It’s why we here at Techdirt focus on a kind of membership model for what we do — encouraging people to pay to support us, not to “get around a paywall” or to “read the news,” but to get extra, useful, valuable features. Some may argue that these are basically the same thing, but I think the difference is extremely important. A paywall is about locking up the news. A membership model is one in which we make our content available, but save certain features and access to those who are willing to support us more fully. One is about putting up barriers and tollbooths, and the other is about offering a better reason to support, while expecting that the free news still continues to drive more support of the other offerings. In other words, it’s a complementary business model that can work in conjunction with other stuff, rather than counter to it. Plus, it’s just more respectful for your community.

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Comments on “The Paywall Conundrum: Even Those Who Like Paying For News Don't Pay For Much News”

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48 Comments
Anonymous Anonymous Coward (profile) says:

Not just yes or no, but how much?

First off, finding a news source that tells the truth, regardless of whether the source demands reporting what I say or one gets loss of access, or whether someone calls it ‘fake news’ is imperative.

Secondly, while the model might work for some national or international venues, the same does not work for local. One might be willing to financially support a national news site if they maintain integrity, or an international news site, again if they maintain integrity, but just how many should one person support?

Usually, in the real world (or at least as it used to be eons ago), someone might subscribe to a local paper, a national paper, some magazines which might be news or special interest oriented, and that’s it. Just how much of that is the online experience trying to convert? (Time/Life changed their views on the magazine business in the 1970’S with the understanding that they could produce 1000 magazines as easily as they could produce 7 and that they could connect with the special interests of subscribers to those 1000 magazines just as easily but with a greater gross and net income (I have some inside perspective on this which I will not share)).

Then there is the local angle. Podunk Sentinel Online might be important for local information and news, but what ‘extra’ are they going to provide to give ‘members’ the incentive to pay? Or maybe a more important question is, how much more than the current subscription price are they asking? High school sports scores? The local police blotter? The obits? The society page? Comments (a local forum on whatever and moderated by whom, someone with an agenda or someone who literally only deletes spam)?

And there’s the rub. If they are asking for more than the printed subscription then they are asking too much. If they are asking for less than the printed subscription but cloud the content with advertising no one wants, then they are asking too much. If they are presenting ‘news’ that is merely a regurgitation of whatever whomever said, then they are asking too much. But, if they actually do some investigative reporting and report without consideration of consequence from the local establishment, then they might have something. Bug then we come down to the process of right sizing the news production entity, a discussion worth having, but not here. Getting the local populace to support that might be problematic as the local populace might be in support of whatever the local hi-jinks are.

And that is why, but not the only reason why, I support Techdirt. Regardless of accusations by certain multinamed and some unnamed trolls, and a few haters, Techdirt does their utmost to discern the difference between truth and lie. They are not omniscient, and cannot cover every instance, and do to a certain extent follow a set of themes, but they do also try to present facts along with analysis. While they may not expand on opposing viewpoints, they don’t actually ignore them. And they have comments, for wherever worth they are when a significant part of the community insists upon responding to the trolls.

I don’t support any other organization in the same way. I get my news from RSS feeds (about 30) and a dozen or so (there are 21 but some of them are comics and weather sites) links that go to news websites that don’t support RSS (shame on them). In addition, I don’t watch TV or Cable, but I know enough about what is going on in the world, and locally, to keep me informed to the extent that I can talk with the people I connect with in person to be more informed than they are. Then again, I am retired, and they might not be.

Anonymous Anonymous Coward (profile) says:

Re: Java Cript

Part of the question is enjoy what? Regurgitation of what politicos, or bureaucrats, or big companies or etc. say? Or something of substance? The NYT seems to be willing to print whatever some unduly passionate personae is willing to say, whether there is any efficacy to their statements or not.

So, bypassing the paywall gets us what? The issue needs to be addressed at a more comprehensive level than just getting past the paywall.

We want news, ethically presented and backstopped with facts.

Now how to get that to us via the Internet, whereby the providers of such news whether local, national, or international and maintain the viability of the providers is the question.

Not an Electronic Rodent (profile) says:

Re: Re: Java Cript

We want news, ethically presented and backstopped with facts.

Sadly, "we" mostly don’t appear to want that – at least not enough to demand it. If that were what sells, more places would be selling it. What appears to sell is sensationalism and playing into your chosen niche of prejudice and confirmation bias.

Would be nice, though, wouldn’t it?

Anonymous Coward says:

Re: Re: Re:2 Java Cript

Same place as the rest of us. I block sites with a proven track record of sensationalism, twitter articles, gossip, ads posing as articles, deceptive headlines, and blind re-printing of articles written by a third party company without appropriate attribution.

When I see these on Reddit, they get voted down. Media corps actually watch how their links fare on Reddit.

If enough people do this, they’ll get the message.

Anonymous Coward says:

Re: Re: Re: Java Cript

Well it is an issue of finding it. If we had an unregulated or ineffectually want bread without saw dust while you would be more likely to find it at a higher price there is no guarantee we would be able to find it even if we paid more than average.

If an honest baker cannot compete in that environment then it doesn’t mean that there isn’t enough demand for food that doesn’t sicken the customer but that we the consumer cannot find it!

Unfortunately it is a matter of trust and inspection which isn’t as trivial as being able to say chemically analyze the bread and use a valid seal of approval enforced rigorously.

Ernie Money says:

You "here at Techdirt" have a losing proposition TOO.

You’ve said that Techdirt isn’t succeeding in terms of "revenue". Not enough advertising, and I bet most attracted by "tech" block ads. Certainly I never see any except the ones you put on front page thinly disguised as "news".

You are definitely WAY WAY down on readers / commentors / number of pieces / interest since 2009 when I chanced upon Techdirt mentioned at a far larger site. So down that you evidently have to resurrect old accounts.

You don’t visibly try to attract and hold a mixed audience, as by making a reasonably free fair forum like most other sites (Reason.com that I referred you to); instead, you’re a hidden partisan who designed / coded in way that helps only those of left-liberal-corporatist views.

You BEG for donations every day, and that was even before your nasty nature ran up lawyer bills. — By the way, that was actually a political attack, NOT "tech". Do you think even slightly Republican readers want to subsidize YOUR attack politics? You automatically shove away HALF the audience.

Anyone can BEG. Now, exactly what’s your superior idea?

Let me tell ya: self-referential pieces like THIS, first bragging, and thinking you’ve invented more subtle way to BEG, ain’t gonna cut it.

Face it, Masnick: if didn’t subsidize the site from your millions solely for vanity, you’d have to go away.

Anonymous Coward says:

Re: Re: You "here at Techdirt" have a losing propositi

The show Surviver should do a segment where the contestants are confronted with the dilemma of either dying a horrible death or face the onslaught of intellectual property assholes whining about how their motor vehicle intellectual property was violated in order to escape certain death.

Law ‘n Order says you must die to protect intellectual property?

Gary (profile) says:

Re: Let me BEG

Oh hai Blue Balls. Still begging for attention?

You are the racist pig who wants frequently rants against the zionist threat? That is called nazi propaganda where i come from.
You are the same poster that says that John Deer(e) is making a "Sharp(e)" business decision to hide behind copyright regarding repairs to their equipment. That makes yo a "Corparationalist" and trainer to farmers.

Why exactly to you come here to spread your lies, submitting to our decisions (the will of the people) when you can’t bother to start your own blog and tell us how it really is?

Run away, with your Blue Balls, and your Tail between your legs. You can’t answer – only deflect with weird questions about tinfoil.

Anonymous Coward says:

Re: Re: Let me BEG

Trolls thrive on attention. Don’t give it to them. If everyone had simply ignored him, Blue would probably have left soon after he arrived. But now he’s a permanent fixture, and it’s your own damn fault. That’s assuming that people here actually want him to disappear; much evidence suggests the contrary, maybe not unlike the news media’s love/hate relationship with Trump (the "love" part being the money he brings in).

Anonymous Coward says:

Re: Re: Re:

Yes, while poor people die from industrial disease, the rich squander their ill gotten gains on some of the most ridiculous shit.

Some of the well to do are not even aware of the attempt to help first responders, much less show active support for something that should not even be up for debate.

Jay Lahto (profile) says:

Paywalls? Can you break a $20?

I subscribe to both of my local rags even though except for the sports and some local articles they’re just rehashed AP or Reuter’s articles. Every time I hit a link that hits a paywall (I’m looking at you, LA Times) I just click away to something else. I figure either they’ll recognize all of the unique visits being turned away or the same information will appear the next day on a site without a paywall. Invariably it will disseminate to a free location where I can just ignore a few ads.

Anonymous Coward says:

Re: Paywalls? Can you break a $20?

even though except for the sports and some local articles they’re just rehashed AP or Reuter’s articles.

But… that’s the entire purpose of AP and Reuter’s. Their members (in the case of AP) or customers (in the case of Reuter’s) pay them in exchange for being able to republish/rewrite articles written by their teams of journalists around the world. They’re literally a cooperative effort by news companies to spread out the cost of journalism.

Anonymous Coward says:

Re: Re: Paywalls? Can you break a $20?

Yes… and in today’s climate where you can access the local rags anywhere in the world, as well as AP and Reuters’ own sites, they’re still doing fine. But anyone who paywalls their articles is shooting themselves in the foot, because they block any ad revenue while at the same time directing people to other sites that aren’t paywalling the information. Do it often enough and people will just stop going to the site altogether.

Anonymous Coward says:

Re: Re: Paywalls? Can you break a $20?

that’s cool and all, but how many times is one going to click through to the same exact article somewhere else and enjoy the priviledge of paying for it? and when most of the news content is regional, national, or world, and 0eople easily have access to the world at large, what is the point of anything beyond 2-16 page local paper most anywhere? those who only get their larger-world news from the local rag are in short supply.

Anonymous Coward says:

Since online news subscriptions have doubled since Trump came on the scene and grabbed the Presidency by the *****, these companies badly need to figure out a way to get Trump re-elected, while at the same time continuing to crank out the anti-Trump hit pieces that keep readers hungry for more. That’s a tough challenge. Maneuvering Trump into starting a war shotly before the election and cheering him on, just as the media did when he bombed the Syrian government and military (under false pretenses, it turned out) might be the perfect tool to insure another 4 years of continued profitability.

TKnarr (profile) says:

Mostly it’s probably because all the general-news outlets carry the same wire-service stories, identical text just with different formatting. Even if they did additional investigation and analysis beyond the basic story, I’d still only subscribe to a couple because I can’t justify the expense of dozens of news sites any more than I could dozens of newspaper subscriptions. Specialist/niche sites, same deal just in a more limited scope.

I suspect the same holds for web sites as for newspapers: subscriptions pay for the paperboy to deliver the things, advertising pays the real bills. That’s bad news for web-based news outlets because web sites have gone so far beyond the pale with advertising (originally with amount, size and intrusiveness, now extended to delivery of malware and stalking of viewers across the Web) that they’re never going to convince people it’s worth looking at the advertising. I think only inertia’s kept the majority of news sites open, and inertia inevitably runs out.

PaulT (profile) says:

For me, the issue is simple – I don’t use a single source for news. I like to browse, get different points of view and stumble across new sources when linked to them or searching for relevant information. Therefore, I am not going to actually pay for most of the sources I use. I’m not going to subscribe to sites I deem as toxic or liars, although I will frequent them occasionally to see what lies are being spread. I won’t pay for sources I generally don’t visit or haven’t heard of. I may pay for one that I find allied politically or whose reporting I need to support, but I won’t pay for 90% of my news consumption no matter how much they ask.

But – this is how it’s always been. I, as most people, have never paid directly for most of my TV news, my radio news, my newspapers. Whether getting the gist flicking through a paper in the shop, or reading one discarded in the break room, papers were happy to have people freely reading in the past. They made sure that the cover price was low and the ad prices were high, knowing that several people would read each copy without buying one. The idea that they can control and monetise every eyeball is a new one.

This is why it’s doomed to fail on a large scale – either you end up with a tiny readership paying you dwindling amounts every month or you lose the casual readership that used to be your bread and butter. Most news outlets don’t have enough of value for people to fund what it actually cost – and never have.

Anonymous Coward says:

The Guardian in the UK has a voluntary supporter model. £49 per year to support their journalism. Other (higher) levels of support are also offered. This last year was their first to make a (small) profit in many many years. I like this as it excludes no-one from accessing the paper. Each supporter level gets some bonuses (mostly access to live events in London).

This works for The Guardian as it has a distinct political view, and is owned by a trust rather than a for-profit corporation.

Peter (profile) says:

Dinosaurs refusing to change

The biggest hurdle to innovation is kicking the addiction – the addiction to absurd profits. Back in the nineties, profit margins of 30 – 40 % were normal for (printed) newspapers. Most had a monopoly either in their region, or in their niche, and could charge as they liked – subscribers and advertisers.

When both crumbled away, the first reaction was to hike up prices, and lower quality (to reduce costs). A vicious circle that, sadly, did not lead to publishers changing their ways.

Steve Jobs told them how to react: small revenue from many users. Which would make sense: A study** found that newspapers with <100 K circulation get >10 m unique visitors on their web site. Visitors who spend 2-3 min on the web site. Plenty of potential for new business models.

One would think. Yet publishers chose pay walls – they seriously expect people to pay $30-50 per months for every newspaper they visit from time to time, for 2-3 min per day.

Not unlike the music industry, who took about two decades to let go of the $20 / CD – business model and finally accepted $10 flatrates a few years ago. With stunning results – revenue and profits have been exploding for years, back to pre-internet levels.

The same might yet happen for newspapers. But only if they let go of their idea each having their own fenced garden with $50 entrance tickets.

** source: https://www.journalism.org/fact-sheet/newspapers/

Anonymous Coward says:

Re: Dinosaurs refusing to change

"Back in the nineties, profit margins of 30 – 40 % were normal"

Perhaps there is confusion on my part wrt what profit margin means.

afaik, the typical profit margin among business in the "free world" is around 7%.

In addition, any ad that claims over 10% roi is highly suspect.

So – 30 to 40 percent? really? What am I missing here?

Anonymous Coward says:

" Large general interest news sites like the NY Times and the Washington Post seem to have made it work."

Apparently you do not understand the business model of the NY Times and the Washington post.

The objective of both IS NOT to make a profit.

The objective is to provide intelligence to their owners so that their owners can make decisions and investment in other arenas where they make a big profit.

For example one of their reporters discovers pubic financial information (We do not want to get involved in insider trading in our example.) that allows the owner to buy or sell assets where a very large profit is made. The newspaper is a loss leader but the organization is immensely profitable.

Not only that but the intelligence is non publicly sold for big bucks to other organizations who also utilize it in a similar manor.

The counter part to gathering information is spreading false information which allows the owners to make a profit again elsewhere and again this propaganda service is discretely sold.

Waitman (profile) says:

There's a Techdirt subscription?

If there is, it’s not clear that it exists. I think a nag screen like Guardian is a turnoff. But maybe it gets them subscriptions. Paying just so I don’t "see ads" isn’t compelling. I subscribe to reddit and I’m not sure why. What do i get out of it?

I think if you put a yellow button that says Subscribe and its a cutaway into the text of the article, people see it. Its not very naggy. They click to find out what they get. There’s 5 seconds to convince them to pay you 5 bucks. After they sign up, they probably won’t cancel. Its too much work.

madasahatter (profile) says:

Subscription vs Membership

Many YouTube channels use a membership model with members getting special access or other benefits. The main content is free to the user. This is sustainable model for many channels and I would suspect many news sites. You still get traffic to see stories and you are getting dues (for lack of a better term) every month.

One of the failures of a hard paywall is many are only interested in one or two stories that are being linked to and have no interest in the other content. Subscribing to a local fish wrap when you are not a local generally makes no sense. So either you allow the views which might generate some ad revenue or miss the view altogether and get 100% of 0.

Another irritation is too many news sites demand one turns off ad-blockers or subscribe, I am not going to either. But if your content is sufficiently important to me, I might join as a member for a few bucks a month.

ECA (profile) says:

WOw, everyone is getting the idea..

Old idea of news paper were that
the adverts Paid for the paper
The Personals Paid for the paper
The want ad’s paid for the paper..
And the Kids got the Money..

What changed to Force papers to start taking 1/2 the money??
Cost of paper?
Ink?
Electricity?
Over PRINTING the paper, and ending up with over 1/2 of them in the garbage?? In the Pet cage? Cat box??

the Thing that Sold the paper was Local INFORMATION and adverts from those business in the area..
How about how Bad comic books got?? the $.10-.25 USED to pay for the Whole thing then an idiot decided that Adverts Paid better..
If you want International news…NOW, you goto those sites, the local news dont need to BUY access to Int. News.
How small is your newspaper now?
A small internet site with Adverts, WORKS.. As you can get Adverts from Every business and Even AREA adverts in Nearby towns/cities.. AND IT SHOULD BE CHEAP..

And as far as I can tell, LOCAL adverts dont get To Smart and insert trackers into the adverts..the Adverts are Inserted into the site… NOT 3rd parties.

Anonymous Coward says:

Let’s face it, people don’t want accuracy or truth. They want an echo chamber that will reinforce their biases. That’s what they’ll pay for. Fox News does very nicely for itself.

A news streaming service could be built like this, as long as someone was cynical enough to do it. Let’s call it The Echo Chamber. You start with five flavors of each news story, from moonbat left to wingnut right. There’s a little slider that you can use when you log in to position your bias. Most people will probably be deluded enough to click the midpoint.

Okay fine let’s put that to the test. Watch the news story for the midpoint. Then rate it, too left wing, too right wing or accurate. If you said anything but accurate, you get moved over accordingly and you watch the next news story, this time calibrated to that mark on the slider. Keep going until you are sorted into your preferred echo chamber.

Anonymous Coward says:

Re: Re:

It’s an illusion of value. Something inside our brains, derived from culture or society, is inclined to believe that if something costs money or is more expensive, it’s probably going to be of higher quality. To be fair this is sometimes the case. But in a world where many businesses and industries are built on the foundation of "sell the cheapest things at the most expensive prices", the veneer of "price = value" is pretty easily broken.

It’s not a coincidence that many of these industries and businesses rail against Google and the Internet. Their "business models" rely on flogging shock value and snake oil; offering what they offer at its actual cost would cut off the funds for their next diamond-studded swimming pool.

Thad (profile) says:

I’ve seen suggestions for a model where you pay a single subscription and it’s divided up among multiple news sources. It’s an interesting idea but there are a lot of implementation questions to consider.

For my part, I’m subscribed to a few different sites — Techdirt, Ars, my local paper — but I understand why most people don’t want to juggle multiple subscriptions to multiple sites. (And of course I read lots of other news sites besides those three.)

PaulT (profile) says:

Re: Re:

The issue would generally be the same one I have with when people proposed similar things for music – how do you know the people you read are actually getting the money? Is your money allocated for the things you support, or is the pool dished out at an overall top level? To use the music analogy – would my listening to more obscure bands support them, or does half my money still got to some pop starlet I’m avoiding?

I’d be happy for something like this to be available if it solely supports what I’m interested in supporting. If some of my money still gets funnelled to the Daily Fail or some Murdoch outlet because they’re more "popular", then no way.

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