Tuesday, October 01, 2013

Are Newspaper Paywalls Starting to Crumble?

Well, Maybe Not Yet, But....

Ever since paywalls became the new black for newspapers, they have acquired some rather ardent detractors as well as defenders.
In the latter category are The New York Times and Wall Street Journal, which have profited handsomely by putting up digital gates. The Times now has nearly 676,000 digital subscribers--also figuring in The International Herald Tribune--while the Journal, a paywall pioneer, has nearly 900,000.
But those papers have oodles of unique content--some of it exclusively digital--that is worth reading and paying for. The same can't be said for most newspapers, though they sure as hell want to make their case. Hundreds of newspapers now have some kind of paywall.
However, for many, that's a problem. They're creating a digital divide at the same time they're cutting staff and content.
All of Gannett's 80 community newspapers have a metered system on their websites. But have you read any of these papers lately? Feh. There's not much there there. And yet Gannett wants you to pony up anyway.
And while early numbers showed that revenue gains from digital subs at Gannett made up for print advertising losses, that may not be sustainable if print subscribers--faced with price increases and shrinking papers--exit more quickly than digital readers enter. Ditto for advertisers. At my local Journal-News in New York's northern suburbs, weekday circulation is 66,000. It was 77,000 just two years earlier. Do you really think digital revenue is making up the difference? Of course not. That's why the J-N laid off 11 percent of its staff in August.
Now the headlong rush to digital gold is being reassessed. First, it was the San Francisco Chronicle that decided to make everything on sfgate.com free again. Now, it's the Dallas Morning News that has signaled retreat. It dropped its paywall in favor of an enhanced experience for "premium subscribers."
How that'll be received remains to be seen (it's free for print subscribers), but unless it's a big-time game-changer, don't expect readers to come a flocking. After all, the reason the DMN dropped its paywall wasn't to be nice. Rather, it bombed with readers. As the paper's CEO said, it didn't create a "massive groundswell" of new subscribers. Quite a euphemism that.
So while the air of inevitability may not be sucked out of the paywall equation just yet, the numbers still have to add up to make it stick. As the San Francisco and Dallas papers have proved, that's a lot easier said than done.

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