Recently, I participated in an industry panel to discuss the paywall experience to date, looking at such areas as the various techniques used, successes, failures, and what might be the next chapter for paid content in the news media business.
It was only a couple of years ago that there was debate about whether our industry should erect paywalls as part of our digital strategies. In 2013, that question was answered, as most publishers actually jumped on board with an initiative for paid digital content. In fact, some 500 newspapers in North America have a paywall in place, most having opted for some type of meter approach.
So has the jump to a paywall made a significant difference for newspaper companies?
But for the majority of North American newspaper publishers, the move to a paid digital content strategy has worked on some fronts and not so well on others.
Clearly, bundling print and digital offerings together has opened a new revenue stream for many publishers. In some cases it has resulted in a nice, one-time lift in revenues. For others, it has allowed for more innovation in pricing, policy changes around vacation credits, and new subscription sales.
These efforts have added millions of dollars to the coffers of media companies, with most having brilliantly executed numerous changes to their pricing and their go-to-market strategies.
However, the majority of the new cash generated has some link back to the print legacy business. That means the move has been a great short-term success for many, but unless the new cash is wisely used to develop new, longer-term revenue streams, the revenue bump will quickly fade.
The number of digital-only subscribers generated by newspaper publishers in North America is small. In most cases, the volumes are 5% to 10% of their print circulation and a fraction of 1% of their total unique visitors. At the same time, the price charged is usually 20% to 25% of a traditional print subscription.
It’s a nice start, but it’s not enough to make up for the lost advertising revenues in the print business — and it’s clearly not the end of the digital story.
I wish I could point to poor execution of paid digital content activities, but on the whole it has been really well-managed.
I believe that over the next 24 months we will see the legacy meter model (yes, legacy only after two years) fade into the background.
In its place we can expect to see new alternatives emerge, such as premium sites, tablet experiments, new smartphone developments, and creative concepts that we’ve not yet even imagined. As well, we might likely see in the next year or two innovations around the idea of selling content memberships rather than newspaper subscriptions.
It’s unfortunate the meter paywall approach is turning out not to be the saviour it was hoped it would be. But as has been said many times before, hope is not a good strategy.
I am optimistic that new business models will emerge, which is one reason that I firmly believe it is an extremely interesting time to be in the news media business.