By paulgillin | November 23, 2011 - 11:55 am - Posted in BusinessModel, Newspapers, Paywalls, Solutions

In places where paywalls are working – and yes, they are working in some places – publishers have abandoned the metaphor of a wall and focused instead on bundled subscriptions that looked a lot like cable television. So writes Poynter’s Rick Edmonds in a summary of a report by the International Newsmedia Marketing Association (INMA) that looks at 15 successful paid subscription models.

No two are exactly alike, and some even challenge credulity, such as the Oklahoman, which charges 20% less for a combined print/digital package than for an online-only plan. That’s right, they pay you to take the newspaper. All the models have one thing in common, though: they’re working. Instead of being positioned as obstacles, they’re marketed as ways to serve  readers’ need flexible consumption via computer, smart phone, tablet or some combination of all three.

The INMA report cautions that hybrid subscriptions aren’t any easy sale. Readers need to have options and explanations laid out clearly, and digital can’t be positioned as an afterthought. However, readers have adopted so-called “digital replica” editions with surprising enthusiasm, indicating a fondness for the look and feel of print even when reading on a screen. The report also indicates optimism that paid subscription models can work when tuned to the needs of the specific audience.

Start by discarding the concept of a wall. Digital subscriptions need to be seen a convenience rather than a barrier. The emergence of multiple digital platforms may be the best thing that has happened to publishers over the last decade. It has given them a way to make simplicity a feature worth paying for, and audiences are proving to like that story.


Andrew Birmingham isn’t quite so optimistic. The CEO of Silicon Gully Investments and a former associate publisher of the Australian Financial Review pens a lengthy piece in the Australian edition of CIO magazine arguing that pay walls are a fundamentally defensive strategy undertaken by panicked publishers whose entire business models are collapsing around them. “The time to implement paywalls was 15 years ago when [editorial content] was worth paying for,” he writes. “The time to invest in editorial was also 15 years ago when [publishers] should have been erecting paywalls.”

Birmingham’s conclusions aren’t particularly novel, but his explanation of the spiraling downward cost of online advertising is worth reading. Advertising networks in general, and Google in particular, come in for particular criticism. Both promised publishers easy money in the late 1990s, when times were good. The consequence, though, has been cannibalization leading to a plunge in advertising prices “from hundreds of dollars per thousand to $1 to $2 dollars per thousand in Australia across general news websites,” Birmingham writes. “In the US, they are now measured in cents per thousand.

Publishers did this to themselves, of course. Few understood the implications of the Internet on their businesses in the early days and most saw online advertising as simply frosting on the cake. Most are making the same mistake with social networks today, choosing to believe that Facebook is simply another publishing medium rather than a reinvention of the way people consume information. It’s good to see some paywall experiments paying dividends, but it’s also hard to believe that publishers will get themselves out of this mess. New entrants will have to figure that one out. In the meantime, playing defense probably makes sense.

Miscellany

Pitch In logo from Port Talbot MagnetOver in the UK, a hyper local startup called the Port Talbot Magnet is trying the direct approach: It’s asking readers to contribute donations to fund its news coverage. Visitors can pledge amounts starting at just £2 to sponsor a court reporter for a day, and PayPal is accepted.

 

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This entry was posted on Wednesday, November 23rd, 2011 at 11:55 am and is filed under BusinessModel, Newspapers, Paywalls, Solutions. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

1 Comment

  1. November 23, 2011 @ 4:57 pm



    Good lord… It is about time that people admitted this. OF COURSE they work. Here is why it was so hard for people to accept that they work- every single middle aged journalist out there, worrying about his thinning hair and progressive erectile dysfunctipn thpught thqt he could regain his youth by listening to his 22 year old tech officer and be “cutting edge”, never mind that fact that his tech officer had never worked another job in his life and was convinced that the world could be powered by drum circles and patchouli. Take a look at the latest quarterly report at the new york times… Page 22. Yup, there it is. As a stand alone paper, the flagship paper is revenue positive for the first time in at least ten years…. All because of the paywall. As the company puts in more paywalls, the company will be more and more successful.
    THERE IS NO NEWS BUT NEWSPAPERS and other traditional media outlets. Blogs do analysis. No blog has a reporter n libya or syria. Christ.

    Posted by Stephen