5 Comments

Summary:

Paywalls are being erected at hundreds of newspapers around the world, but Guardian Media CEO Andrew Miller says his newspaper is still opposed to a subscription wall because it wants to expand its readership as much as possible.

In a media world that seems to be rushing headlong towards paywalls and other subscription models, there are a couple of major holdouts, and one of the most prominent is The Guardian in Britain — where editor Alan Rusbridger continues to promote the idea of what he calls “open journalism,” a goal that relies on broad public access to the paper’s content. In a recent piece for The Economist, the chief executive of Guardian Media Group explained why he doesn’t see paywalls as a “one size fits all” solution to the media industry’s ongoing problems with declining advertising revenue.

(Note: We will be talking about paywalls and other alternative monetization methods for content at our paidContent Live media conference in New York on April 18, including an interview with Guardian editor-in-chief Alan Rusbridger about the paper’s strategy)

Andrew Miller, who took over as CEO of Guardian Media in 2010, is intimately familiar with the impact that falling ad revenue — particularly classified revenue — has had on newspaper publishers: before taking the top job at the paper’s parent company (which also owns The Observer), he was Guardian Media’s chief financial officer. In the most recent fiscal year, the company lost $70 million on revenues of about $300 million. And while it is owned by the non-profit Scott Trust, the newspaper is still under pressure to pare its losses and has been making cutbacks for the past year in an attempt to do that.

In the Economist piece — which is mostly about The Guardian expanding into Australia through a partnership with internet entrepreneur Graeme Wood — Miller says that paywalls may work for some publishers, such as the Economist and the Times, but they aren’t likely to work for everyone:

“Newspapers have always used a blend of different funding mechanisms to extract revenues for their ‘product’. That’s why I am unconvinced by those who say that the only model that works is to build paywalls. This is not an area where one size fits all.”

Paywalls work if you want to monetize rather than expand

As Miller describes it, paywalls work well in markets where a publisher has a large existing base of subscribers that it can monetize via subscriptions, and in particular when a newspaper or media entity serves a specific niche like business or finance:

“In some news organisations where growth in readership may not be so important and in particular where there is a strong existing print subscriber base to build on, a pure paywall may make excellent business sense. The Economist and perhaps the Times spring to mind here. On the other hand, if the news organisation is about growing reach and access, then a paywall is not – for the moment, at least – the answer.”

This is fundamentally the same argument that has been used by Don Graham, CEO of the Washington Post, and his publisher Katharine Weymouth to defend that paper’s dislike of paywalls. As Graham has described it, the subscription solution is less appealing for a newspaper whose readership comes primarily from outside its actual geographic market — something that is also the case with The Guardian (although there are reports that the Post may launch some kind of metered paywall this year.

Miller says that Guardian Media is continuing to explore paywalls or subscription models for some of its content (the paper charges for its mobile apps, for example). But it seems clear that for the British publisher, reaching new readers around the globe is still seen as more important at this point than monetizing its existing readership.

Disclosure: Guardian News and Media Ltd., the parent company of the Guardian newspaper, is an investor in the parent company of this blog, Giga Omni Media

Post and thumbnail images courtesy of Shutterstock/Voronin76

You’re subscribed! If you like, you can update your settings

  1. A Paywall will work for any site, and MediaPass has the proof with thousands of publishers using it’s solution. If a site wants to maximize yield in terms of revenue, a non-metered model works best. If you want to balance readership growth, a meter works well. MediaPass also gives publishers the ability to make selected articles and site sections paid, not make everything paid or free. The publishing world is still not sophisticated when it comes to applying these models which is why they are choosing MediaPass as their experts to assist them in best using the platform to reach their objectives.

    1. Not spam at all. I am an expert in this space and know this model works for every publisher. It just so happens that I and the other experts at MediaPass have built the leading platform for this purpose.

    2. Wow Jeff, with ” thousands of publishers” using MediaPass, your solution is probably the best-kept secret of the paid-content market. Congratulations!

  2. William Dyson Monday, January 21, 2013

    It seems to me that News Medias is very much in the same postion that music distribution was before itunes came along.

    1)Multiple Distribution Silos

    2)Lack of Price Stabilisation concerning the what charge for content.

Comments have been disabled for this post