Lots Of Newspapers Discovering That Paywalls Don't Work

from the shocking,-there dept

For many years, while some journalists (and newspaper execs) have been insisting that a paywall is "the answer" for the declining news business, we've been pointing out how fundamentally stupid paywalls are for the news. Without going into all of the arguments again, the short version is this: the business of newspapers has never really been "the news business" (no matter how much they insist otherwise). It's always been the community and attention business. And in the past they were able to command such attention and build a community around news because they didn't have much competition. But the competitive landscape for community and attention has changed (massively) thanks to the internet. And putting up a paywall makes it worse. In most cases, it's limiting the ability of these newspapers to build communities or get attention, and actively pushing people away.

And, yes, sure, people will point to the NY Times, the Wall Street Journal and the Financial Times as proof that "paywalls work." But earth to basically every other publication: you're not one of those publications. The paywalls there only work because of the unique content they have, and even then they don't work as well as most people think.

Not surprisingly, more and more newspapers that bet on paywalls are discovering that they don't really work that well and were a waste of time and effort -- and may have driven away even more readers.
Of the paywalls erected in the past few years, many have delivered lackluster results, said Ken Doctor, a media consultant who writes the blog Newsonomics.

"The ones that were launched in 2012 to 2014 had good early results and they all largely stalled," he said.

"They are no longer gaining much in the way of new digital subscriptions, and their print is in rapid decline."
The article also quotes Alan Mutter who has been pointing out the fallacies around newspaper paywalls for probably longer than I have:
Paywalls can backfire also "because they put a barrier between the newspaper and the casual reader," he added.

"They are truncating the size of the digital market, when the most important factor for digital is scale."
Meanwhile, as newspapers are realizing this, even the "successful" paywall folks at the Wall Street Journal appear to be changing up its paywall to make it easier for non-paying users to read the articles.

This doesn't mean that you can't get money from readers -- but paywalls are a stupid way to do it. You're asking them to pay for the same kind of value that they can often get elsewhere. That's dumb. If you're charging, you should be charging for unique value and something different that only your publication can provide. General interest news is not that.

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  • identicon
    UniKyrn, 15 Aug 2016 @ 4:39pm

    And why is their print edition dying?

    How about the price going through the roof the last couple of years and the size of the paper shrinking even faster.

    I subscribe to the daily paper that I used to deliver every day long ago. They just bumped the price another 20% for the next renewal and I've had enough. I've delivered, read and subscribed to it for over 40 years and watched as every other house nearby removed their newspaper box from the end of the driveway. Mine will be the last one to go for the area, but it's time to retire it.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 15 Aug 2016 @ 5:09pm

      Re:

      I am very disappointed at the poor content in many newspapers recently. Even major papers seem to have reduced the target reading age, shortened the articles, reduced the depth and detail, and targeted form over content. They are largely poor imitations of yesteryear. Historical newspaper archives reveal so much which is never in the history books nor likely to make a splash on mobile-device snippet-'news'. It is a huge cultural loss.

      reply to this | link to this | view in chronology ]

      • icon
        Atkray (profile), 15 Aug 2016 @ 5:53pm

        Re: Re:

        You forgot to mention that they have left proofreading and editorial functions to "spell check".

        reply to this | link to this | view in chronology ]

      • identicon
        bob, 15 Aug 2016 @ 6:22pm

        Re: Re:

        Newspapers are not going to disappear entirely however the fat from the industry is being removed.

        Eventually the cuts and shutdowns will end and a few papers will still be around because they actually have content worth reading. Also people will eventually realize the remaining papers cover the niche market of more depth and facts for each article than what is chased after by the normal media.

        By that time, there will be something of value that is worth preserving.

        It's not the end of papers just a harsh time of refinement that few will emerge from.

        reply to this | link to this | view in chronology ]

  • icon
    Whatever (profile), 15 Aug 2016 @ 5:45pm

    It's easy to say "paywalls" (do you have a problem with subscription service as a concept) don't work - but they do.

    What doesn't work is trying to sell non-unique content at a unique content price. Since most local and regional papers depends heavily on wire services for content, they are selling a non-unique product, something others are willing to give for "free" (free as in check out all our ads). Those papers have to consider what unique content they really have, and value it accordingly.

    It's not the paywall - it's the content!

    reply to this | link to this | view in chronology ]

  • identicon
    Skeeter, 15 Aug 2016 @ 6:18pm

    Hilarity in News to Begin With

    Well, with most conservative-based newspapers closing; and with most liberal-based papers resorting to paywalls, the obvious 10,000 pound elephant in the room is the actual CLIENTELE remaining. Conservatives would still pay for papers for the most-part, but there are none left to read and few are going to pay for liberal trash when they don't have to. Liberals aren't going to placate the paywalls when they can get their 22-seconds of soundbyte news by catching it 3rd-hand on a 'Reality TV show' five days late. Thus, you are right, paywalls kill readership SLIGHTLY - but the real focus is that news is so hard-skewed left anymore, that no one wants to read about horror in the middle east, storms in the south, and what bad things the Republican candidate (while NO liberal paper is going to speak like that about a Democrat).

    FYI - the press just doesn't get it, the government doesn't care, the Powers-that-be have you right where they want you, and the sheep keep waving at the wolves encircling them. Who needs news when you have 'pop-culture-TV', right?

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 15 Aug 2016 @ 7:03pm

      Re: Hilarity in News to Begin With

      reply to this | link to this | view in chronology ]

    • icon
      PaulT (profile), 16 Aug 2016 @ 1:53am

      Re: Hilarity in News to Begin With

      The most important question is why you feel the need to come in and comment on every article about news with an ignorant rant about how news outlets aren't serving you personally in their political views. How they'd become rich if only they'd cater to you. Especially ones that pretend you're superior to people who have a different viewpoint just because... something?

      You've have thought the "conservatives" would have thicker skins and the ability to create new businesses that are successful at capturing the huge marketplace you claim is available to them. I wonder why they are failing? From your ranting, I assume it's because they're spending too much time whining online than actually doing something, or perhaps that the strawman fantasy you've created doesn't actually exist, but who knows?

      "Who needs news when you have 'pop-culture-TV', right?"

      What does TV have to do with a discussion on the business models of newspapers? Who do you think you're attacking?

      reply to this | link to this | view in chronology ]

    • identicon
      Illarion, 16 Aug 2016 @ 6:19am

      Re: Hilarity in News to Begin With

      Come to the UK! Our mainstream news/papers are shockingly right wing. You'd love it.

      reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 16 Aug 2016 @ 6:43am

      Re: Hilarity in News to Begin With

      For those who see everything in terms of left/right, perhaps there are other glasses through which one can view their world.
      Nah ... that's too risky, might injure yourself.

      reply to this | link to this | view in chronology ]

      • identicon
        We Fear Change, 17 Aug 2016 @ 1:15am

        Re: Re: Hilarity in News to Begin With

        Newspaper bias is not a myth. You only have to look to see who owns a particular newspaper to determine how it's bias will run.

        A while back there was a Mori poll taken that asked people to grade professions in terms of the respect they felt for them. Doctors and nurses figured highly, as did teachers, engineers, soldiers... at the bottom though were politicians, estate agents (AKA realtors in the US?), and journalists. Yes, journalists ranked lower than bankers. Who knew.

        reply to this | link to this | view in chronology ]

        • icon
          PaulT (profile), 17 Aug 2016 @ 2:47am

          Re: Re: Re: Hilarity in News to Begin With

          An individual publication may have a bias. However, it's both a myth that the entire industry has one specific bias, and a myth that everything is "left" or "right" with nothing outside or in between. The issue isn't bias itself, but deluded souls like Skeeter who feel that everything's one or the other and they're being conspired against by the world.

          As for respect for a profession? When journalists do their job badly, they're just copying and pasting or parroting other peoples' words and so barely deserve to be paid. When they do their jobs correctly, they annoy people by asking difficult questions and uncovering uncomfortable truths. It would be suspicious if they were higher on the list.

          reply to this | link to this | view in chronology ]

  • icon
    streetlight (profile), 15 Aug 2016 @ 6:23pm

    Pulitzer and advertising

    The posting asserts, " ...the business of newspapers has never really been "the news business" (no matter how much they insist otherwise). It's always been the community and attention business."

    It was Josef Pulitzer in the 1880s who came up with the idea that the profit in newspapers would come from advertising and not from subscription fees. I would maintain the news in newspapers was and is a sideline to advertising, though the news content has some value to subscribers. Maybe today's on line newspaper web sites should return to the Pulitzer business model. They have a problem though: ad blockers derail this idea. Seems to me we have a successful, huge tech company that has adopted Pulitzer's business model. It provides content and applications for free that that have great value to users paid for by advertising.

    As others have noted and I see is that newspapers have very little news these days and what pretends to be news is actually features. And they have ad placement as news.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 16 Aug 2016 @ 5:02am

      Re: Pulitzer and advertising

      Ad blockers are a problem for newspapers because newspaper ads (online) are a problem to newspaper readers. If they want an ad-supported income model, they should put some effort into creating online ads that don't annoy their readers. And Forbes, please note, that includes not serving malware in your ad stream.

      reply to this | link to this | view in chronology ]

      • icon
        That One Guy (profile), 16 Aug 2016 @ 9:38am

        Re: Re: Pulitzer and advertising

        If they want an ad-supported income model, they should put some effort into creating online ads that don't annoy their readers

        'Annoying' is bearable. I'd be willing to put up with some 'annoying' if that was the price for good content. What I absolutely will not put up with is malicious, and when even major sites(like Forbes) serves up malicious ads that just makes it even more clear why ad-blockers are not just suggested software, they're required.

        The ones running the sites don't care about the safety and security of those using their sites, which means their visitors have to do it themselves, and if that means ad-blockers then they have no-one to blame but themselves.

        reply to this | link to this | view in chronology ]

      • icon
        John Fenderson (profile), 16 Aug 2016 @ 9:57pm

        Re: Re: Pulitzer and advertising

        "they should put some effort into creating online ads that don't annoy their readers"

        A certain amount of annoying is fine with me. What I absolutely cannot tolerate is the tracking. Until that stops, my adblockers stay up.

        reply to this | link to this | view in chronology ]

  • icon
    Padpaw (profile), 15 Aug 2016 @ 6:35pm

    they would need to be operating in a void where they are the only ones with access to said news for a paywall to work. Most of us just go somewhere else for the same story for free

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 15 Aug 2016 @ 7:36pm

    Newspapers have misunderstood what their bread and butter were: Journalism + advertising.

    If the newspapers would realize that the online equivalence of their old business-model would be the combination of journalism and an advertisement agency, they would get closer to realizing how to survive. As with any old publishing: The lack of a physical object where they could overcharge customers is gone. The internet lacks some of the boundaries they used to live off, but a more DIY-attitude in terms of advertisement and aggresively working on making a targeted geographical match of visitors and advertisers through content, may lessen some of the problems of switching over.

    The real problem is paying for independent investigative journalistic content today. That is where the internet is still in its infancy.

    reply to this | link to this | view in chronology ]

  • identicon
    aidian, 16 Aug 2016 @ 12:32am

    Yes and no...

    ...newsroom I work in has a soft paywall. We have a pretty high number of free articles, and LOTS of stuff doesn't count against it. Pretty much the only thing that does count against the paywall is local reporting.

    The thing is, you're not going to get much if any local journalism from other sources. The local TV stations are pretty weak onair, and even weaker online. So if you're interested in consistent, reliable, local news, you're going to wind up reading our work. The trick is making sure that our reporting is actually meeting the needs and wants of our audience (and doing it without sacrificing actual news while chasing traffic). Whether we can pull that off, and whether the citizens of our region have the means and desire to pay enough to support the work we do via this business model remains to be seen. I don't love this model, but I don't see a better one.

    Going entirely ad supported has a lot of issues. Most important is the rate online ads pay. It's a fraction of what print ads pay. The phrase used is 'digital dimes for analog dollars.' Smart, thoughtful advertising can improve this - more relevant, non-traditional, more targeted advertising developed as part of local campaigns trying to reach local people - but so far we're just starting to take baby steps in this direction.

    I don't love the hybrid model we're working with, and, while it seems the best option and there's some promise, I don't know if it'll work. But if you live in our area, and you'd like to know how the city council is spending your money, or why the local PD shot and killed an unarmed man last week, or why the health department only seems to ding Mexican restaurants, or whatever, then someone's got to support the reporters who dig into those stories.

    Those reporters are a group of skilled, dedicated professionals who do a pretty good job, and they do it for peanuts. With the exception of delivering pizzas, the news pays less than anything I've ever done. Even the publisher makes less than $100,000 a year.

    reply to this | link to this | view in chronology ]

    • identicon
      Chuck, 16 Aug 2016 @ 8:48am

      Re: Yes and no...

      While I feel your pain a bit here, there's two key things you seem to have missed here:

      1) You don't have an innate right to survive and prosper. This is a very, very large part of why so-called "old media" is failing. You are running under the delusion that your continued existence either is guaranteed, or else, should be guaranteed. But it isn't and it shouldn't be. If your audience doesn't care enough for your reporting to fund it, then that's life.

      (I realize that sounds EXTREMELY harsh and I am sorry, but that point had to be made, if not for you than for everyone else.)

      2) How did you sell ads in the past? You had 1 or more local advertising specialists who worked at the paper itself, as an in-house employee, and actually went to local businesses and sold ad space, right? (Ok if your paper is part of a larger publisher then probably not, but most local/independent papers did it this way.)

      Counter-intuitively enough, this is one of the few things you should NOT be changing with your slow migration to the web.

      So many local papers setup their web sites as an afterthought, and in doing so, they farm out their advertising to third parties. Why? Why on earth would you do this? You are an AD AGENCY, who just happens to also report the news. Why would you waste decades of contacts/clients/businesses who you already know would buy an ad?

      Instead, actively sell ONLINE ads to the very same people who are already buying your print ads. Market to them directly. You say you are the only good source of local news online? Awesome, then selling ad space to local businesses should be extremely easy.

      In fact, since you already have code in place to paywall local stories (as opposed to, basically, AP stories people could pull from a million other news sites) take that same code and use it to place your ads. Local stories get local ads ONLY, ensuring that your business clients know that 99% of the eyeballs seeing those stories are actual, local, potential customers. Then place normal ads on your AP stories.

      This way your local businesses have a MUCH higher rate of return advertising on your paper's site than they would get, say, buying Google AdWords, and meanwhile you get your money up front and can reasonably charge per-view instead of per-click.

      In other words, sell your online ads exactly the same way you've always sold your print ads. You'll find a lot more success that way and you can take down the stupid paywall.

      reply to this | link to this | view in chronology ]

      • identicon
        aidian, 16 Aug 2016 @ 11:33pm

        Re: Re: Yes and no...

        Chuck...appreciate the thoughtful comments...in my case you're kinda preaching to the choir. FWIW, I don't have any delusion that local news operations will survive. If they don't, c'est la vie, it'd be a loss for the community. Personally, it'd likely mean I wind up working less and making more money doing almost anything else :)

        reply to this | link to this | view in chronology ]

    • icon
      John Fenderson (profile), 16 Aug 2016 @ 8:58am

      Re: Yes and no...

      This is pretty close to the approach that my hometown paper has taken, although they're a bit tighter with the paywall from the sounds of it.

      I pay them. Not because of the paywall, but despite it.

      Their coverage of local news is very good, and I want to support that. Also, they let me run my adblocker full blast and still read the news.

      reply to this | link to this | view in chronology ]

  • icon
    jameshogg (profile), 16 Aug 2016 @ 6:26am

    If you paid for journalism on a paywalled news site, when you could have easily gone to another site that didn't have a paywall to find those exact same non-copyrighted facts, it can only be concluded that the paywall doesn't deserve any credit for the factors that caused you to pay for the journalism.

    reply to this | link to this | view in chronology ]

    • icon
      jameshogg (profile), 16 Aug 2016 @ 6:30am

      Re:

      Though I might add, if journalism demanded payment through assurance contracted crowdfunding before being worked on and released, this kind of paywall WOULD get credit for funding the discovery of those facts.

      Precisely because it's not being dependent on the utopia of "artificial scarcity". Crowdfunding paywalls are natural scarcity, and it gives the journalists the advantage to set a price they require to do their work and actually get it.

      reply to this | link to this | view in chronology ]

  • identicon
    Harold, 16 Aug 2016 @ 6:31am

    The other thing of interest

    I use an ad blocker - for lots of reasons - and I am locked out of the content of Forbes and Wired and others. All fine and good, its their right and I am not upset. However, I recently was directed to Newsweek and read an article which was so well written that I decided to subscribe for $1.25 per week. Did a 6-month subscription.

    The sites I am blocked from do not get the opportunity for my business. Seems short sighted to me.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 16 Aug 2016 @ 6:43am

    Hmmm. didn't take as long as i thought!!

    reply to this | link to this | view in chronology ]

  • icon
    Ninja (profile), 16 Aug 2016 @ 6:45am

    Most of us have a handful of publications we like to read. If they can provide an easy, available way to get their content in a way I can curate I wouldn't mind paying 2 or 3 bucks at most (remember, a handful) but not because I woudln't have access to the content but rather because they provide value in paying. That's a huge difference. I hope my favorite news outfits move to such system. I'd gladly lend a helping hand.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 16 Aug 2016 @ 7:45am

    The conversation going on in board rooms everywhere:

    Editor:

    Ahhh! Why didn't you tell us?

    Webmaster:

    Would you like me to print out the 40 emails I sent you saying this was a dumbass idea?

    reply to this | link to this | view in chronology ]

  • identicon
    lwj, 16 Aug 2016 @ 8:42am

    not true

    Your assumption that "local news" is available "elsewhere," but that's just not true.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 16 Aug 2016 @ 8:44am

    Same is happening with internet radio , although instead of paywalls its exclusive streaming sites .
    I still use my logitech squeezebox and have lost 3 local radio stations to this crap . I cant see how they (radio stations) are going to gain audience by limiting how their audience can hear them . I cant believe their advertisers
    actually pay them to limit them selves out of existence .

    reply to this | link to this | view in chronology ]

  • icon
    TheResidentSkeptic (profile), 16 Aug 2016 @ 9:39am

    The Really Sad Part

    ..is that they never asked technologists for suggestions to move into the Digital World.

    Here's a quick example:

    Given that subscriptions NEVER fully covered the cost of producing and distribution, then we have to ask what they did.

    They provided a metric used to set advertising rates - the number of unique addresses (street) that subscribed. Not the number of readers. The digital world provides the same (and more) information for free - the number of unique addresses (IP) that 1) return daily; 2) return multiple times per day; 3) are new; 4) read Sunday only. These numbers could also be used the same way to set advertising rates. Of course, there would have to be more than 2 ads shown every 30 seconds.

    Analysis of the on-line activity would provide instant feedback on what articles/news/items were actually of interest. You really had no clue when you threw 40 pages out there of what was actually read. The web gives you that insight - and could certainly be an indicator of where to expend resources to garner more hits, higher metrics, higher rates.

    Customer inclusion would foster even more growth. Social sharing increases number of new IP hits.

    But no - we're gonna block feedback, add costs, add malware, and demand the Good Old Days back.

    oh well.

    reply to this | link to this | view in chronology ]

    • identicon
      We Fear Change, 17 Aug 2016 @ 1:18am

      Re: The Really Sad Part

      Exactly so. You'd think that purveyors in information would understand the value of information, but sadly it aint so.

      reply to this | link to this | view in chronology ]

  • identicon
    Trish, 16 Aug 2016 @ 1:23pm

    It's funny because the news is garbage. It exists to get people to read your paper, to get their eyeballs to the one thing that matters to you these days: Not journalism, not information, not change, ADVERTISING. You used to charge us for this advertising-to-home because you had a physical product to pay for, and people paid because they didn't have the Internet to beam thousands of ads into their cerebral cortices per hour, for free. I'm sorry, I will never pay for this garbage "news" and neither will anyone under the age of 50 (who isn't trying to be some hotshot "newsreader" person to impress colleagues and potential mates with his knowledge of garbage news).

    reply to this | link to this | view in chronology ]

    • identicon
      Trish, 16 Aug 2016 @ 1:29pm

      Re:

      Also, Spotify wants 10$ a month, Netflix another ten, and that's just the two services my cheap ass uses. Never mind the bandwidth I use. With the Internet you get infinite possibilities, but that wallet is still pretty finite, so thanks for wasting the internet, capitalism.

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 16 Aug 2016 @ 4:56pm

    Give me a Bitcoin to read my full comment.

    reply to this | link to this | view in chronology ]


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